The departure of the European Medicines Agency’s headquarters from London will not just mean an empty building in Canary Wharf. If increasingly gloomy predictions by the EMA are anything to go by, the relocation could result in an exodus of staff and knock-on delays to European drug approvals.
Depending on where the EU decides to site the new headquarters, the agency has warned that it could lose as much as 70% of its workforce, which it says would severely hit its ability to function. And for pharma companies this is not just academic – those with products due to go before the European regulator in the next couple of years could lose valuable sales (see table below).
Grant Castle, a partner at the law firm Covington & Burling, believes that the main consequence of lower staff numbers could be longer waiting times to file drugs. “Because of the regulatory timetable there isn’t a huge amount of scope for delaying reviews, but companies could find it difficult to get their drugs into the queue for filing,” he tells EP Vantage.
Most of the developers of the EU's top 10 late-stage projects – ranked by 2022 EvaluatePharma sellside consensus sales forecasts – are big groups that could absorb any delay.
However, there is a notable exception: Bluebird Bio, whose prospects are heavily dependent on the success of its beta-thalassaemia and sickle cell disease gene therapy Lentiglobin. European sales of $210m make up 36% of its total 2022 prediction.
|At risk: European sales of late-stage projects|
|Project||Company||Lead indication(s)||Global||Europe||2022e Europe sales ($m)|
|Apalutamide||Johnson & Johnson||Prostate cancer||Phase III||Phase III||338|
|Rova-T||Abbvie||Small-cell lung cancer||Phase III||Phase III||239|
|Bevespi Aerosphere||Astrazeneca||COPD||Marketed||Phase III||213|
|Acalabrutinib||Astrazeneca||Chronic lymphocytic leukaemia||Filed||Phase III||213|
|Lentiglobin||Bluebird Bio||Beta-thalassaemia||Phase III||Phase III||210|
|Ozanimod||Celgene||Multiple sclerosis||Phase III||Phase III||208|
|Luspatercept||Celgene||Myelodysplastic syndromes, beta-thalassaemia||Phase III||Phase III||193|
|BAF312||Novartis||Multiple sclerosis||Phase III||Phase III||182|
|Upadacitinib/ABT-494||Abbvie||Rheumatoid arthritis||Phase III||Phase III||175|
Other smaller companies also have a lot riding on their lead pipeline projects, with GW Pharmaceuticals’ rare epilepsy candidate Epidiolex and Sage Therapeutics’ depression contender Sage-547 just missing out on the top 10, with 2022 European sales forecasts of $173m and $164m respectively.
Losing these revenues entirely is the worst-case scenario; fortunately it might not come to that. Much depends on the final location of the EMA's HQ, on which the General Affairs Council of the EU is to decide on November 20. The agency is due to move to its new home by March 2019.
If the EMA ends up in a city deemed acceptable by its current staff, it could keep up to 81% of its workforce, the agency estimates. A recent survey of EMA employees revealed a sharp divide between the popular and unpopular locations.
The cities in the survey were anonymised, but EP Vantage understands that the top choices were Amsterdam, Barcelona, Vienna, Milan and Copenhagen. Of those, Barcelona now looks in doubt after the recent controversial referendum for Catalan independence.
Meanwhile, the least popular cities are thought to be Warsaw, Bucharest and Sofia. “If they go to one of those, they don’t think they’ll have anybody to do the job,” said Steve Bates, head of the UK Bioindustry Association (BIA), at a recent meeting on the state of the sector.
As well as concerns over a lack of facilities and transport links, another reason for this antipathy could be financial. If the EMA moves east salary levels, which are based on average wages in the host country, could be significantly reduced, points out Covington & Burling’s Mr Castle.
“That’s why London is popular, because the EMA can pay the salaries that sophisticated high-tech employees expect. If it moves to Sofia the salary levels might not be enough to attract the highly skilled people it needs,” he says.
While moving the EMA to one of these unpopular locations seems on the face of it unlikely, Mr Bates fears that rather than basing the decision on where the agency would best function, it could become a political football. “Eastern Europe hasn’t got any agencies, and the Germans and French are fighting over the banking agency. Does this become the pawn that goes to Eastern Europe?”
Mr Castle agrees that politics could also be a factor. He notes that there are already a number of EU institutions in some of the more popular destinations on the EMA’s shortlist, including the European Environment agency in Copenhagen and the European Space Research and Technology Centre based close to Amsterdam.
With hardly any EU institutions in some of the newer member states the EU might find it hard to turn down appeals from Eastern European countries to host an organisation that would bring large numbers of jobs and economic benefits.
Mr Castle believes that demands from the east could indeed influence the eventual destination of the agency. “If you had a significant number of newer member states pressing for a EU institution in their territory it would have some political weight,” he says.
Historically there have been problems basing large agencies in eastern states. For example the border agency Frontex has encountered serious difficulties in recruiting skilled staff because of candidates’ reluctance to live in Warsaw, owing to the comparatively low wages and standard of living.
Conversely, lobbying for some of the more popular destinations like Copenhagen and Stockholm could come from pharma companies and their industry bodies, such as the European Federation of Pharmaceutical Industries and Associations, looking to keep business disruption to a minimum.
Mads Krogsgaard Thomsen, chief science officer of the Danish group Novo Nordisk, was keen to stress the advantages of Copenhagen during a recent meeting with EP Vantage: “I think we have what it takes, but we don’t decide. It’s politics.”
Ultimately, the decision will rest with the member states with input from the European Commission.
If an Eastern European city is selected, this might not be the end of the world, says Mr Castle. He points out that because most of the EMA’s work is delegated to the member states through the work of the CHMP, which meets monthly to review applications, the disruption to approvals even with lower staff levels at the main EMA could be minimal.
But Mr Bates is not reassured: “My worry is that we end up with a political decision that then leads to an agency that doesn’t work. If we have an agency that doesn’t work, that’s bad for everybody.”