Friday, June 24, 2016

Unintended Consequences: What Of EU-Wide VAT Systems; EMEA HQ -- Now That England Is Exiting The EU?

UPDATED @ 11:15 PM EDT: Do read former British Prime Minister Tony Blair's reflection on today's fallout. His is clearly a voice of both experience, and reason. We would be wise to take heed.

And now, goodnight to all of good will.

Namaste. . . End, update.

As I write this, the continent is staggering under the weight of collateral fallout and unexpected implications from last night's British exit vote. That is no hyperbole.

There are precious few clear answers yet, so I'll just mention that the system of cross Europe transactional taxes may need to be reworked -- and that may have profound implications for all multinational life science companies.

However, one fairly clear immediate implication is that all the regulatory expertise currently housed in London, at the headquarters of the EMEA (sort of the EU version of our FDA) will. . . depart. It is not at all clear that if (for example) EMEA HQ is relocated to Frankfurt, Germany, or Paris, France (the two most likely candidates, in my estimation) the science staffers would be willing to relocate. So multinationals may face additional hurdles (and delays at least) in clearing drugs for sale in the European Union, as the agency's London HQ is wound down. It remains unclear however whether the UK will create a separate "whole cloth" regulatory scheme for drugs, devices and biologicals -- one that might well conflict with existing EMEA frameworks. In any event, here's a bit from Reuters, overnight:

. . . .The association of Germany's pharmaceuticals industry said the European Union's London-based drugs regulator, the European Medicines Agency, will have to relocate after Britain's vote to leave the EU, posing a considerable administrative burden for drugmakers.

"The administrative hurdles that we are now facing as a result of Great Britain's exit from the Union will require great efforts on the part of our member companies," the association said in a statement on Friday. . . .

It is almost as though the people of Britain are awakening this morning and collectively saying. . . "Wait -- I drank WHAT, last night? Sheesh." Global equity markets are tanking as well, as they open. Yikes.

In any event, it will be sorted out in due course -- but I'd not be shocked to see an undo referendum vote effort emerge, about a year from now, from the saner British quarters. Strange times, indeed. Onward, on a sunny warm Friday. . .

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