Heave-ho for the Eurocrats
There can be no celebrating the departure of the european Banking Agency (eBA) and the european Medicines Agency (eMA) from London. But the losses may not be that significant.
President Macron regards the capture of the eBA as an enormous success for Paris. The bigger question is what is the eBA for?
When it conducted its stress tests of europe’s banks in the immediate aftermath of the financial crisis, it failed to spot that Italian banks had up to €1trillion of rotten loans, that Greek banks were effectively bust, that Germany’s regional Landesbanken needed bailouts and that Deutsche Bank was a basket case.
It is no accident that the Frankfurt european Central Bank, alarmed by the lack of focus on stability, aped the Federal reserve and Bank of england and became the lead institution for euroland banking regulation. Meanwhile, europe’s rescue fund – the european Stability Mechanism – became the go-to institution for euroland countries in trouble.
More critical for Britain will be the exit of the 700 experts at the eMA. Together with Britain’s respected MhrA, the two agencies have been gatekeepers for approval of new medicines across europe, winning similar status to the US Food & Drugs Administration.
There will be some relief at Britain’s big pharma companies GSK and Astra Zeneca that Amsterdam rather than Bratislava is the winner. The latter could have resulted in an exodus of talent.
eastern europeans who backed Bratislava will feel cheated that the Western europeans continue to pick the plums making them look like poor relations.
Britain’s big pharma would like to see the eMA and MhrA have mutual recognition status to avoid an extra regulatory hoop.
There is a belief that the MhrA could become the more important agency if, like the FDA, it has a fast track in vital disease treatments. The only way this can really work is if the NhS is able to resume the role it once had as a test bed for new medicines. There will be no point in the Chancellor backing r&D in today’s Budget if new treatments cannot be trialled and brought to market.
The vulnerability of the NhS to unscrupulous pharma is illustrated by Canada’s Concordia which jacked up the price of thyroid drug liothyronine by 6000pc between 2007 and 2017. Truly shocking.
That experience reinforces the need for NICe as an economic enforcer. But NICe also needs to make sure that the UK’s excellence as a drug, vaccine and devices innovator is not undermined. health Secretary Jeremy hunt please note.
Trust busters
AMerICA has a long history of breaking up monopolies and, trusts dating back to the early 20th Century. In recent decades the powers have been infrequently exercised allowing the rise of the digital giants such as Google, Apple and Amazon, which have huge pricing power and impact in every corner of commerce.
Against this background the decision by the US Department of Justice (DoJ) to bring a lawsuit to try and block AT&T’s £65.5bn takeover of Time Warner comes as a shock. Critics of Donald Trump suggest the case is motivated by the President’s disdain for CNN part of Time Warner.
Yet the 23-page complaint by the DoJ makes the reasonable case that such a deal would grant AT&T monopoly power to charge rival pay-TV firms exorbitant prices for movies, sport, news and other content bringing detriment to the consumer. It also suggests that by entrenching traditional media it will slow development of online video streaming as offered by Netflix and Amazon.
The DoJ’s intervention will be closely watched by the creative arm of rupert Murdoch’s 21st Century Fox which is thought to be up for sale, with cable group Comcast, telecoms group Verizon and Disney all in the chase. It is fanciful to think that Trump would challenge his telephone buddy rupert who he chats to regularly. Great to have friends in high places.
Revenue surge
WITh so much on today’s Budget elsewhere, I was determined this would be a Philip hammond free zone. But one small observation.
The main reason that borrowing is set to come in below the target set in March is because tax receipts are buoyant with all categories including, VAT, income tax, levies on dividends and stamp duty rising. That only happens in a growing economy.
Austerity. What austerity?