MERCK & CO. PREPARES FOR BREXIT DRUG SUPPLY 'BLACKOUT'

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MERCK & CO. PREPARES FOR BREXIT DRUG SUPPLY 'BLACKOUT'
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8 June 2018
      In a sign of the geopolitical times, Merck & Co. has plans for stockpiling drugs and altering delivery routes to avoid drug shortages if Brexit adds paperwork, time and confusion to getting drugs delivered in Europe and the U.K.

      According to a Bloomberg report, Merck & Co., known as MSD in Europe, may stockpile as much as six months' worth of product in preparation for a “temporary supply blackout” when the U.K. separates from the European Union next year.

      Citing a source, Bloomberg says the company is rethinking supply routes, anticipating it will take as much as two extra days in delivery time to deal with stops for new regulations and tariffs. It is considering adding as many as 30 employees to its Haarlem, Netherlands, facility to deal with regulatory issues that arise.

      Merck spokespersons did not respond to a request for comment but one told Bloomberg: “At this stage, these are just contingency plans and therefore may not be implemented. Our first and foremost focus at this time is to develop plans which ensure continued access to our medicines throughout the Brexit process.”

      But Merck hinted at the impending issues in an SEC filing earlier this year when it said, “it is possible that there will be greater restrictions on imports and exports between the U.K. and EU countries, increased regulatory complexities, and cross border labor issues that could adversely impact the company’s business operations in the U.K.”

      Drugmakers have urged the U.K. and EU to finalize separation plans so they know exactly what they are facing, but so far those negotiations have been slow and unproductive. The industry’s main lobbying group in the EU has pointed out that without early ideas about changes, drug delivery could be chaos. The European Federation of Pharmaceutical Industries and Associations (Efpia) has said about 45 million packages of drugs move from the U.K. to the EU each year and 37 million the other direction.

      Drugmakers have told the Efpia that they expect delays for the 45% of “centrally authorized” products controlled by the U.K. in the EU if the two sides default to World Trade Organization rules instead of hammering out an agreement over how drugs will be approved and flow back and forth.

      Some pharma players have done more than make plans. While Big Pharma companies equivocate about whether to pull drug production from the U.K. because of Brexit, CDMO Almac obtained a site in the EU and is now investing about £30 million ($41.6 million) on upgrades. Based in Northern Ireland—part of the U.K.—Almac has secured a site 40 minutes away in Dundalk, Ireland, part of the EU. It says EU regulators have already inspected the site for clinical trial and commercial production.