Brexit and the life sciences sector: what is the relevance of the transition (implementation) period?

At the moment, there is no-one who knows quite what the status of the relationship between the United Kingdom and the European Union will be on the day after Brexit, 30 March 2019; if they do know, they are not saying. The British Prime Minister herself seems to have been taken by surprise when her 'Chequers deal' was ambushed by the EU 27 at Salzburg on 20 September. There is speculation about a rival, 'Canada+' free-trade agreement proposal, but there is currently no indication from Government that this will be adopted. With Theresa May still insisting on Chequers, many political commentators now think that the choice is between two outcomes: a deal on a version of Chequers; or, a 'no-deal' arrangement on World Trade Organisation terms. If there is agreement in any form – at this stage this could only be the briefest of outlines of a future relationship – this will also bring with it a transition period according to the terms of the 'Withdrawal Agreement'.

This is one of three articles which examine what we know from UK Government and EU Commission documents about each of these outcomes and what they mean for the life sciences sector, in particular the authorisation of medicines and medical devices:

• Brexit and the life sciences sector: the UK Government's offer to the EU
• Brexit and the life sciences sector: Guidelines for a 'no deal' Brexit

In this article, Paul England addresses the relevance of the transition (implementation) period:

Earlier in the year, on 29 March 2018, David Davis and Michel Barnier announced that, in principle, agreement had been reached between the UK and the remaining EU27 on a substantial number of the terms of the UK's withdrawal from the EU, together with the terms of transition for that withdrawal (the draft Withdrawal Agreement). In particular, a transition (or implementation) period was drawn up lasting from 29 March 2019 to 31 December 2020. The status of negotiations on this Agreement were updated on 19 June 2018. The draft Withdrawal Agreement is expected to be signed and become binding on the UK if there is also agreement, at least in outline, on the future relationship between the UK and the EU.

The Withdrawal Agreement states that unless otherwise provided, EU law will continue to apply to the United Kingdom during the transition period. There are also a number of provisions in this draft that affect life sciences sector industries during this period:

• Article 37: any good (including pharmaceuticals and medical devices) that is lawfully placed on the market of the EU27 or the UK before the end of the transition period may continue to circulate in and between those territories until it reaches its end user.
• Article 39(1) and (2): UK and EU market surveillance bodies must exchange any information between them and the Commission (and with the notified body that conducted the conformity assessment before the end of the transition period, in respect of medical devices) information concerning serious risks relating to the above goods;
• Article 40: the UK must transfer to the competent authority of a designated Member State all relevant files or documents relating to procedures, which include marketing authorisation applications under Directive 2001 /83 (the 'Medicinal Products Directive'), that are ongoing on the day before the entry into force of the draft Withdrawal Agreement;
• Article 41(1) and (2): upon a 'reasoned request' from a competent authority of a Member State or the EMA, the MHRA must transfer the marketing authorisation dossiers for products authorised before the end of the transition period, where they are necessary for the assessment of an abridged application under the Medicinal Products Directive. This obligation applies vice versa to reasoned requests made by the MHRA;
• Article 42: if requested by the certificate holder, information held by a conformity assessment body established in the UK in relation to its activities as a notified body before the end of the transition period must be made available to a notified body established in a Member State and vice versa.
• Article 56: Regulations 1610/96 and 469/2009 providing for supplementary protection certificates for plant protection products and medicinal products, respectively, or applications for the extension of the duration of these, will apply to applications made during the transition period that are ongoing at the end of the transition period. Resulting certificates that are granted must provide for the same level of protection as that provided for in those Regulations

It is notable, in particular, that the HMRA would be prohibited from acting as the lead authority for marketing authorisation applications and clinical trials during transition (Article 123(6)), apparently meaning that the UK will not be able to act as a reference member state for authorisations during this period. This would appear to be a backward step from the current role of the HMRA and that being proposed by the UK Government in its offer to the EU agreed at Chequers and set out in the White Paper, but it should be remembered that the terms of the draft Withdrawal Agreement are conditional on heads of terms on the future relationship being agreed – that is, agreement on the White Paper or something similar. The draft Withdrawal Agreement should therefore be viewed as a holding position on these issues in the meantime, which will be amended to conform to the future relationship when it is known.

On the EU principle that 'nothing is agreed until everything is agreed', if there is no negotiated agreement on the future relationship between the EU and the UK, at least in outline, – 'no deal' – then it is possible that the UK will exit the EU on 29 March without the Withdrawal Agreement and the transition measures described above.

If you have any questions on this article or would like to propose a subject to be addressed by Synapse please contact us.