Under Brexit, the UK entered a new era that promised great change and opportunity for companies wishing to export their products to the UK. Facilitating this transition though, requires streamlining regulations and relooking at existing legislation to coordinate and facilitate the travel of cross-border goods, processes and value chains.
The pharmaceutical sector is the third largest industry in the UK and according to the Association of the British Pharmaceutical Industry (ABPI), the sector adds an average of £13.8 billion ($18.8 billion) to the British economy each year. With Brexit however, funding and investment of the sector is under threat. It is estimated that the UK receives up to £8.5bn of funding from, amongst others, Horizon Europe and the European Investment Fund. According to an article on the TwoLabs1 website, Brexit could have a significant impact on funding of UK research and development, and this will have a broader impact on the global scientific community. In the pharma sector, European respondents were very sceptical about the new post-Brexit reality. Global Data2 indicate that only 24% saw the UK as an attractive destination for healthcare research and manufacturing.
The UK needs investment in the pharma and medical device sector, not only to keep these grants flowing, but also to show that it continues as a viable trading space. This is backed up by Global Data’s citing of Switzerland as a leading example of a successful pharma and medical device industry outside the EU. The country boasts low effective corporate tax rates and flexible labour laws, allowing for more liberal contracts, longer working hours, and reduced union involvement.
To navigate some of these challenges, international law firm and Brexit experts BakerMcKenzie3, unpacked some of the aspects that could impact your product’s entry into the UK pharma market.
- The UK Trade and Cooperation Agreement (TCA) with the EU came into effect in 2021. This offers pharmaceutical and medical device companies regulatory provisions to smooth trade between the EU and UK. These now function as separate legal and regulatory jurisdictions, therefore distinct regulatory regimes for medicines and medical devices will now apply in the UK and the EU, plus products must meet relevant requirements for the market in which they are sold.
- The Medicines and Healthcare products Regulatory Agency (MHRA) is the regulatory body for the UK and works independently for England, Scotland and Wales. However, in Northern Ireland (NI), where UK and EU regulation overlap, EU regulation takes precedence. As a result, market entry can occur via a direct application processed domestically in accordance with the EU rules, or reliance on EU decisions. Mutual recognition agreements have been entered into, however the TCA lacks provisions for the mutual recognition of conformity assessment standards, which would have allowed EU member states to recognise certification by UK bodies to demonstrate compliance with EU standards. As a result, UK products must undergo a further certification step to enter the single market and device makers must navigate different regulatory regimes for the EU and UK.
- One of the key issues which the Government faces involves clarity around the exact nature of the exemptions agreed in regards to the application of EU rules, as well as the need for clarity surrounding compliant marking of medical devices, importation from GB to NI, and recognition of product batch testing.
- On 1 January 2021, the MHRA introduced the UK Conformity Assessment (UKCA) marking for medical devices on the GB market after the transition period (mandatory from 1 July 2023). Currently, a CE marked device with a valid declaration of conformity or certificate will meet the UKCA mark requirements and will be recognised in GB until 30 June 2023. In contrast, the EU will not recognise UKCA marking and certificates issued by UK Notified Bodies. Further, Notified Bodies are not able to issue CE certificates other than for the purposes of the “CE UKNI” marking, which will be valid in NI and have become UK Approved Bodies. As EU regulation takes precedence, NI goods must align with EU rather than UK product regulations. It has therefore been suggested that essentially the UK will offer a ‘UK only’ marking and ‘UK wide’ marking (recognised by NI), however these advancements raise known uncertainties.
- The EU Medical Devices Regulation (EU MDR) and EU in vitro Diagnostic Medical Devices Regulation (EU IVDR), due to take effect in May 2021, will not be implemented in GB. However, the regulations as implemented and in existence on 1 January 2021 will continue to have effect in GB after the transition period and the regulatory regime in GB will to be based on the requirements derived from current EU legislation, which suggests some consistency.
- In terms of pharmaceutical, medicinal products annex and batch testing, the commitment to the Brexit Working Group signals that the TCA is a foundation to build and strengthen relationships with European counterparts. A sound manufacturing process is good for both industry and regulator, plus it avoids cost duplication. The TCA provides for the mutual recognition of good manufacturing practice (GMP) inspections of manufacturing facilities for medicinal products. The Agreement Annex on medicinal products allows acceptance of GMP documents issued by either party, but also allows for rejection in certain circumstances. The agreement, although recognising GMP inspections, does reserve the right of either party to conduct their own inspections of facilities certified compliant by the other party, so long as conditions are met. This exemplifies the EU and UK working to facilitate trade.
- The lack of mutual recognition regarding product batch testing in the UK poses deep concern. As a result, the UK has been granted a two-year period for unilateral recognition, where the UK will accept batch testing and Qualified Person certification conducted in the European Economic Area (EEA) until 1 January 2023. The European Commission juxtaposes this as the EU will not mutually recognise batch release, and a Qualified Person in the EEA must certify each batch of finished product before being released for placement on the market in the EEA. This period of standstill for batch testing is deeply disconcerting. Currently, the UK are gathering evidence to show why this stand still is insufficient, especially in regards to particular problems such as cell therapy and rare disease. The requirements are complex and difficult to interpret in some circumstances.
To gain support in navigating the complex UK pharmaceutical and healthcare regulatory situation, talk to Clarity Pharma.
2 The GlobalData survey ‘Brexit and the Healthcare Industry – 2021 Edition’ (GDHCHT265, April 2021)