Health and Medicine

Relocation cost for European Medicines Agency hits €600m after lease bungle

Britain faces a bill of almost €600 million for relocating the European Medicines Agency (EMA), with up to three quarters of its 890 staff threatening to resign rather than leave London.

The EMA is responsible for the scientific evaluation, supervision and safety monitoring of all medicines marketed in Europe’s single market and must move from London before Britain leaves the EU in March 2019.

Britain is on the hook to pay a spiralling €582.5 million bill for relocating the agency as part of EU demands for a Brexit financial settlement, with the bulk of costs arising from a botched rental contract for its Canary Wharf offices. The list of 19 cities competing to take the agency was published yesterday, with Bratislava tipped as a favourite.

Conservative MPs have called on British businesses and the government to poach the EMA’s scientists and experts, potentially using them to beef up the UK’s Medicines and Healthcare Products Regulatory Agency for an enhanced post-Brexit role.

During a private briefing to the European parliament’s budget committee on July 11, the EMA’s management team warned that up 667 of its 890 staff did not want to leave London, potentially “devastating” the agency’s work.

“The representative from the EMA said that there were 890 members of staff and that 75 per cent would not want to go to a new location,” notes taken by a parliament staffer at the meeting read.

The EMA board on June 15 instructed the agency’s management to “prioritise activities to make available the necessary resources to prepare for Brexit and cope with a potentially significant staff loss”. Contingency plans include addressing “the scenario where EMA can no longer compensate staff loss through the recruitment of replacement resource”.

Geoffrey Clifton-Brown, Conservative MP for the Cotswolds, called on the government and business to offer the scientists and experts sweeteners to stay and prepare Britain’s pharmaceutical industry for Brexit

“A lot of those people were involved in shaping the European legislation and I imagine our legislation will have to be very similar to the Europeans’,” he told The Daily Telegraph. “If there is anything economically and legitimately sensible that we could do, we should try and keep them.”

Unlike the smaller European Banking Authority (EBA), with 189 staff, which is also leaving London after Brexit, the medicines agency neglected to negotiate a “break clause”, meaning taxpayers are locked into a rent contract for its offices until June 30, 2039.

The cost of breaking the lease is more than €347 million and takes the total relocation cost for the EMA to almost €600 million.

“What spectacular financial incompetence,” said Ray Finch, a Ukip MEP on the parliament’s budget committee. “Just imagine the stupidity of signing a 25-year lease without an escape clause — it beggars belief.”

An EBA briefing to MEPs noted that the banking agency had negotiated a break clause “well ahead of the UK referendum on EU membership [which] significantly reduces the potential costs”.

“If this clause had not been included in the lease then EBA would have been liable for a cost of £16 million [about €18 million] for the six years to December 2026,” an EBA briefing document read.

Amsterdam, Barcelona, Copenhagen, Dublin, Lille, Porto and Stockholm are also among the 19 cities seeking to host the EMA.

● Six in ten people who voted Leave in last year’s referendum agreed that even if Brexit “caused you or members of your family to lose their job” it would be a price worth paying, research by YouGov found. Whereas only a quarter of Brexit voters under 24 were willing to accept job losses, the figure rose to 50 per cent of Leave voters over the age of 65. Thirty-eight per cent of Brexit voters overall said that job losses in their family would not be a price worth paying.