Brexit and the life sciences sector: guidelines for 'no deal'

In-depth analysis

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:

In this article, Matthew Royle and Paul England address the guidelines issued by the UK Government and EU Commission in the event of a 'no deal' Brexit:

What are the consequences of the EU rejecting the Chequers White Paper?

The first point of importance, if no agreement is reached between the UK and the EU on their future relationship, at least in outline the Withdrawal Agreement will not apply. This means that the transition period will not apply.

The second point is that, on the 29 March 2019, the effect of the European Union (Withdrawal) Act 2018 will be to bring into force all the EU law that the Act has 'copied and pasted' onto the UK statue book. This means that UK medicines and medical devices regulation will remain the same as the EU until the UK decides it should diverge, if at all. In addition, as discussed below, existing marketing authorisations granted by the EMA will be 'grandfathered' onto the UK register. However, the common system of cooperation and mutual recognition that has been the mainstay of EU medicines and medical devices regulation will come to an end.

To explain consequences such as these for the area of medicines and devices, a number of documents have been issued by the European Commission and the UK Government, as follows:

European Commission guidance on a 'no-deal' Brexit

In preparation for Brexit, the European Commission has published jointly with the EMA a Q&A document1 outlining the steps that need to be taken to allow the marketing of medicines in the EU and EEA market after 29 March 2018. Although, the document does not mention the failure of the UK and EU to strike a deal on their future relationship, the document is drafted on this assumption. The Q&A document states that the following measures would need to be taken by marketing authorisation holders and manufacturers importing from the UK into the EU. The requirements listed include, amongst other matters:

marketing authorisations must be transferred to holders established in the EU (which is extended to Norway, Iceland and Liechtenstein under the EEA Agreement) in order to be recognized in those countries. The transfer of these authorisations must be completed before 30 March 2019;
UK based manufactures of active ingredient must only use starting materials that have been manufactured in accordance with GMP guidelines. Active substances may only be imported into the EU/EEA if they are accompanied by written confirmation from the competent authority that the standards of goods manufacturing practice and control of the plant are equivalent to those in the EU/EEA. Certificates that active ingredients comply with GMP must be transferred to a holder in the EU;
UK based manufacturers of finished product wishing to import into the EU/EEA will be subject to authorization on the basis of a number of conditions, including the availability of a qualified person in the EEA and GMP inspection;
the location of batch control and release sites must be situated within the EU/EEA and authorized importers established in the EU/EEA identified;
relevant Qualified Persons must be located in the EU/EEA;
orphan drug designations must be transferred to a holder in the EEA/EU;
generic, abridged marketing authorisations granted on the basis of a UK authorized reference medicinal product before 30 March 2019 will remain valid. Subsequent authorisations will only be granted on the basis of a reference medicinal product authorized by an EU member state or a contracting member of the EEA. The same measures apply in respect of biosimilars;
marketing authorisations granted in the UK before 30 March 2019 will still be considered the initial marketing authorisation for the purpose of the global marketing authorisation concept.

As regards medical devices, in a further document, a Notice to Stakeholders2, the European Commission states that holders of CE marked products must transfer the relevant certificate and file for that product to an EU Notified Body.

UK guidance on a 'no-deal' Brexit

On 23 August, 13 September 2018 and 24 September, the UK Government published a series Technical Notes which are intended to provide guidance to businesses and individuals on planning for a ʽno dealʼ Brexit. This series of Notes covers a number of issues relevant to the authorisation and marketing of life sciences products, in particular pharmaceuticals and medical devices, specifically Technical Notes titled 'How medicines, medical devices and clinical trials would be regulated if there's no Brexit deal and 'Batch testing medicines if there's no Brexit deal'.

A summary of the key points from these Technical Notes is as follows:

from 29 March 2019, centrally authorised marketing authorisations will be 'grandfathered' onto the MHRA register as UK marketing authorisations, meaning that all existing authorisations granted by this route will continue;
after Brexit, separate marketing authorisations must be filed for the UK to those for the EU/EEA. This means that the UK will no longer participate in the centralised procedure for authorisation (operated through the EMA), and will not participate in the decentralised or mutual recognition procedures (either as a reference state or by recognising EU reference states);
marketing authorisation applications that are still progressing in the centralised procedure at the time of Brexit, must be transferred to the MHRA. If the Committee for Medicinal Products for Human Use (CHMP) has issued an opinion on such an application by exit day, the MHRA will take this into account. Applications that are still in the decentralised or mutual recognition procedures at the time of Brexit will be subject to provisions allowing the MHRA to complete the assessment and approve successful applications as UK marketing authorisations;
generic, abridged applications will not be possible for drugs where the MHRA does not have access to the data underlying the original authorisation. This appears to refer to data held by the EMA (relevant to marketing authorisations obtained through the centralised procedure) or the relevant authority of a non-UK reference member state. The implication of this is that generics companies must file a complete set of regulatory data including all clinical trials in order to obtain authorisation for these in the UK otherwise generic or biosimilar products will not be available in the UK;
marketing authorisation holders of 'grandfathered' marketing authorisations and Qualified Persons must be established in the UK for the purpose of market access in the UK market. There is a grace period for this purpose until the end of 2020. Until then, the MHRA will require a contact in the UK.
Except for the grace period, this requirement reflects measures that the EU will put in place for the EU/EEA market (see above);
the UK will continue to accept batch testing of human medicines carried out in countries named on a list set out by the MHRA (including EU/EEA). This measure recognises that, immediately after Brexit, medicines regulation in the EU/EEA will be the same as that in the UK and so the testing of each batch of product for compliance with a marketing authorisation does not need to be duplicated in the UK when already performed in the EU/EEA. This measure is intended to assist in movement of medicines from the EU/EEA to the UK and will be welcomed. It has not, so far, been reciprocated by the EU;
for an initial period, the UK will continue to recognise CE marking conducted by EU notified bodies post-Brexit, for a 'time-limited' period. In other words, for the time-limited period in question, the UK will not require separate marking by UK notified bodies. This arrangement has not, so far, been reciprocated by the EU;for an initial period, the UK will recognise exhaustion in the EU/EEA, allowing parallel trading of products into the UK from the EU/EEA to continue. It remains to be seen whether the EU will reciprocate this measure. Note however, from a further Technical Note 'Exhaustion of intellectual property rights if there's no Brexit deal' that the EU/EEA may not reciprocate and there may be restrictions on the parallel import of goods from the UK to the EEA.

A further Technical Note, published on 24 September, titled 'Patents if there's no Brexit deal' confirms, as expected, that there will be no change to patenting in the UK (which is not regulated by the EU) and that the supplementary protection certificate system will continue under UK law operating independently from the EU regime, with all the current conditions and requirements remaining. As regards the Unified Patent Court and Unitary Patent the Note states that the UK will explore whether it would be possible to remain within these systems in a 'no deal' scenario.

At the same time as the Technical Notes, the Government published two letters from the Health and Social Care Secretary Matt Hancock. The letter to pharmaceutical companies asks suppliers to increase their medicines stocks by at least 6 weeks on top of their usual buffer stocks and ensure plans are in place to air freight products with a short shelf life that cannot be stockpiled This is echoed in the letter to suppliers of medical devices and clinical consumables in which it is reiterated that contingency plans are being developed, stock holding at a national level will be increased and, finally, that further information will be provided to industry in September.

Separately, the UK Government has announced that it expects the EU's new Clinical Trials Regulation (CTR) to be implemented in the UK during the transition period. The CTR is expected to bring a streamlined applications process, harmonised assessment procedure, a single portal for all EU clinical trials and simplified reporting procedures. However, the announcement notes, if the CTR does not come into force during the transition period, the Government has confirmed that UK law will remain aligned with those parts of the CTR that are within the UK's control. There are two aspects of the CTR that would require a negotiated settlement of the future relationship beyond the transition period. These are the use of a shared central IT portal and participation in the single assessment model.

In the Announcement, the Government emphasises that UK clinical trial applications will continue to be authorised by the MHRA and ethics committees as they are now, in a 'no-deal' scenario. The UK ability to participate in multinational trials would also not change. The Government also says it is seeking to preserve the current position that a sponsor or their 'legal representative' should be based in the EU or EEA. However, while the legal representative will only need to be based in the EU or EEA it is anticipated that it will be necessary to have an individual based in the UK who has overall responsibility for the trial and can be contacted to discuss urgent issues arising in connection with a trial.

Are there any surprises?

There are perhaps few surprises amongst the measures set out in the EU Q&A guidance and the UK's Technical Notes. Many of the requirements of the UK reciprocate those of the EU, albeit with a little more flexibility on timing. The UK's decision to continue to accept batch testing of human medicines carried out in the EU/EEA stands out as a unilateral measure and it has been welcomed. The most surprising announcement from the UK is that generic, abridged applications will not be possible for drugs where the MHRA does not have access to the data underlying the original authorisation. This measure appears to have the potential to restrict the availability of some generic medicines in the UK in circumstances where it is within the power of the MHRA to recognise bioequivalence to a reference medicinal product without the need for the underlying data. It is also interesting to note that the UK will accept the existing exhaustion regime for an undefined period, enabling patented goods placed on the market in the EU/EEA with the patentee's consent to be parallel traded into the UK. Depending on the duration of the continuation of the existing exhaustion regime, it could reduce the impact of the restriction on abridged applications. Note, however, that there is currently no sign of this measure being reciprocated.

It remains to be seen, of course, whether the above measures will be needed.

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

1 Published in its third revision on 19 June 2018, in respect of centrally authorized products. A parallel list of requirements relevant to nationally authorised medicinal products through the mutual recognition and decentralized procedures was published by the Coordination Group for Mutual Recognition and Decentralised Procedures (CMDh), also on 18 June 2018.

2 Withdrawal of the United Kingdom and EU Rules in the Field of Industrial Products, 22 January 2018.