On Friday 13 April 2018, the Dutch Council of Ministers confirmed the move of the European Medicines Agency from London to Amsterdam, a direct result of the United Kingdom’s upcoming exit from the European Union. The EMA joins the growing list of companies leaving the UK - including Japanese electronics company Panasonic, who are also moving to the Netherlands. This past summer, EY announced that, since March, the number of companies to announce their UK-departure has risen by 2%. British-based companies have also sought to minimise the damage caused by Brexit, with Lloyds of London receiving approval to begin establishing significant business operations in Brussels. The FT notes that one in seven EU companies are moving their supply chain out of the UK.
All of that to say: Brexit is, unquestionably, a watershed event for the European business landscape. The larger, looming question regards its effect on Europe’s newly developing capitals, such as the Netherlands.
The EMA is a powerful force in the Life Sciences industry. Funded by the EU, it seeks to promote and protect public and animal health with the support of thousands of experts across the EU. It has the bureaucratic benefit of allowing companies to obtain EU and EEA marketing authorisation via a single application, allowing medicines and treatments to receive immediate widespread approval. It is a benchmark for Life Sciences Industry companies to monitor, and its choice to move to the Netherlands may mark Amsterdam as the go-to city for Pharma in the EU.
The move has not been uncontested. Amidst concerns that Amsterdam would not be prepared for the March 2019 deadline (November 2019 is being projected as the completion date of the EMA’s new Dutch headquarters), Italy appealed the decision. This opposition was rejected by the European Parliament, despite voicing some concern over potential building delays. Every major city in Europe is vying to become the “new” London - PWC lists Amsterdam, Geneva, and Paris as potential contenders, citing their "skilled workforce, nearly native English speakers, favourable climate for expats and good tax incentives for innovative activities.” The UK itself could become a tax haven, perhaps lowering business taxes in an effort to compensate for its lack of EU conveniences. Regardless, the current climate is characterised by uncertainty, and the Netherlands is benefiting from the business world’s confusion. The EMA alone will bring 80% of its 900 employees to the new Amsterdam office (discounting any UK employees, who will no longer be allowed to work for the EU agency).
The EMA’s move has paved the way for other Life Sciences companies to venture into the Netherlands. Cambridge-based Pharma consulting organisation Diamond Biopharm has opened an office in Amsterdam in preparation of a “hard Brexit.” Even Eurostar announced a new London to Amsterdam service, making it easier to commute between the two cities.
Ultimately, Brexit remains ambiguous. Businesses react to this ambiguity by establishing certainty abroad. Although Amsterdam faces competition from the likes of Milan, Paris, and Frankfurt, the EMA has forged a clear path from the UK to the Netherlands. From a legal standpoint, the market may now become overwhelmed by a sudden demand for Dutch-qualified lawyers, as foreign businesses seek assistance in the newly expanded market. Leading up to March 2019, we should be prepared for a clear shift in the Dutch Life Sciences Sector - thanks, in no small part, to the EMA. This time next year, we will be in a better position to see what the actual effect has been on the rest of the Life Sciences industry and what the impact has been on the demand for lawyers in the sector.