[Ip-health] Wall Street Journal: Sanofi Has Been Stockpiling Drugs for No-Deal Brexit for Six Months

Thiru Balasubramaniam thiru at keionline.org
Wed Aug 1 23:57:59 PDT 2018


https://www.wsj.com/articles/sanofi-has-been-stockpiling-drugs-for-no-deal-brexit-for-six-months-1533066633

Sanofi Has Been Stockpiling Drugs for No-Deal Brexit for Six Months

The move is the latest sign large European companies are worried about a
wide-scale disruption

By Donato Paolo Mancini (@donatopmancini <http://twitter.com/donatopmancini>
)
Updated Aug. 1, 2018 10:07 a.m. ET

French pharmaceuticals company Sanofi SA has been making drug-shortage
contingency plans for more than a year to prepare for the U.K. failing to
reach a deal with the European Union on Brexit, according to a person
familiar with the matter.

The move is the latest sign large European companies are worried about the
prospects of a hard Brexit, where the U.K. doesn’t reach a deal over its
future relationship with the European Union, despite repeated attempts at
reassurance from British government officials.

A no-deal scenario is expected to result in wide-scale disruption in the
U.K.’s import of products from the Continent, and vice versa.

Food, medicine and transport could be affected if no transition period is
agreed upon, and jointly agreed regulation would no longer apply. While it
has been a possibility since the U.K. voted to leave the EU in 2016, a
no-deal scenario has only recently become a more plausible option as talks
between the bloc and the U.K. have stalled.

Sanofi isn’t the only pharmaceutical company making contingency plans.
Swiss drugmaker Novartis AG told The Wall Street Journal on Wednesday that
it too was planning to hold increased inventories in the event that the
U.K. and EU don’t reach a deal before the departure.AstraZeneca PLC said in
recent weeks that it had increased its stockpile by about a month to
protect itself from a disorderly Brexit.

Sanofi, which generated global sales of about €35 billion ($40.9 billion)
in 2017, of which €850 million were in the U.K., is one of the Continent’s
largest insulin and vaccine producers.

The company’s Brexit-related preparations began about a year ago, the
person said, adding that its U.K. division began building its stocks about
six months after. Stocks have been increased for all therapeutic areas by
about four weeks to a total of 14, the person said, excluding medicines
that are in constant shortage. The stock for vaccines has also been
increased where possible. Stockpiling is the accumulation of drugs beyond
levels that a company would otherwise deem necessary.

Sanofi follows in the footsteps of other major pharma players like
AstraZeneca PLC, which said earlier this month that it had increased its
stockpile by about a month to protect itself from a disorderly Brexit. The
increase, however, represented only a small portion of its total
manufacturing.Quality control, for which Sanofi sends batches of medicine
back to the Continent from its two plants in the U.K., would no longer be
possible in the case of a hard Brexit. The person added that some staff
reductions to its 1,800-strong workforce in the U.K. would become necessary.

There hasn’t been any guidance from the U.K. government in terms of what
would be possible or even feasible in case of a no-deal departure from the
EU, the person said.

A hard Brexit would affect far more than one industry. The EU has warned
that air licenses issued in the U.K. and the EU could no longer be valid
for travel in each other’s territories. Legal arrangements that regulate
road travel also would no longer apply.

A Sanofi spokesman confirmed stockpiling was taking place in the U.K. in
preparation of a no-deal Brexit but declined to comment further. He also
said the company continued to closely monitor the evolving tariff situation
between the EU and the U.S.

Separately, the London-based European Medicines Agency said it was already
feeling the pinch from Brexit. The regulator has already announced plans to
relocate to Amsterdam, and warned Wednesday it would have to curtail some
activities because of staff shortages linked to the move. The agency said
it expects “a staff loss of about 30%, with a high degree of uncertainty
regarding midterm staff retention.”



-- 
Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International
41 22 791 6727
thiru at keionline.org


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