Britain’s vote yesterday to leave the European Union spells regulatory uncertainty for drug companies, with the London-based European Medicines Agency (EMA), which approves treatments for all EU countries, expected to have to relocate.

The European Medicines Agency (EMA) is a European Union agency for the evaluation of medicinal products. Prior to 2004, it was known as the European Agency for the Evaluation of Medicinal Products (EMEA).

Roughly parallel to the drug part of the U.S. Food and Drug Administration (FDA), but without centralization, the EMA was set up in 1995 with funding from the European Union and the pharmaceutical industry, as well as indirect subsidy from member states, in an attempt to harmonize (but not replace) the work of existing national medicine regulatory bodies.

The hope was that this plan would not only reduce the €350 million annual cost drug companies incurred by having to win separate approvals from each member state but also that it would eliminate the protectionist tendencies of sovereign states unwilling to approve new drugs that might compete with those already produced by domestic drug companies. The EU is currently the source of about one-third of the new drugs brought onto the world market each year.

According to the report in Reuters Health, the association of Germany’s pharmaceuticals industry said that EMA would need to move to a city within the EU, bringing administrative headaches for companies.

Britain’s biggest drugmaker, GlaxoSmithKline, said the exit vote “creates uncertainty and potentially complexity for us in the future”, though the impact on its global business would be small, while the UK pharma trade association warned of challenges to future investment, research and jobs.

Industry executives fear upheaval at the EMA could snarl the EU’s drug approval process and Britain may have to develop its own domestic regulatory system, leading to further confusion.

Although Britain could continue to take part in the EMA system if it remains in the European Economic Area, like Norway, many of those supporting its exit from the EU oppose that option.

As a result, British patients could move to the back of the queue for new medicines as companies prioritize the larger EU market, and some medicines could be left in regulatory limbo.

The EMA, with a full-time staff of more than 600, is the largest EU body in Britain and has overseen pan-European drug approvals since 1995 from its headquarters tucked away among global banks in London’s Canary Wharf.

An EMA spokeswoman said it was premature to comment on its future. “It is too early to foresee the implications of this decision and at this stage we are waiting for further guidance from the European Commission,” she said.

Drug companies and healthcare officials in Sweden, Denmark, Italy and Germany have all expressed interest in hosting the EMA instead of London, since firms in these countries are keen to be located close to the region’s key regulator.