MedTech and the Brexit White Paper

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MedTech and the Brexit White Paper

Published 24 July 2018

"Brexit means Brexit". But what does Brexit mean for the Medical Technology ("MedTech") sector of the UK economy, a sector which is, in legal terms, currently regulated almost entirely by EU-based law?  As with many other aspects of Brexit, the answer to this question will depend principally on the terms of the UK's exit deal from the EU. 

The UK is due to leave the EU on 29 March 2019. The Government's White Paper, exploring the UK's future relationship with the EU, was published on 12 July 2018 and provides some clarity of what the UK is hoping to achieve.  At its core, it aims to strike "a new and fair balance of rights and obligations".  However, after the EU's muted response, negotiations will need to make considerable progress if a deal is to be in place by October, as hoped. 

We explore what the White Paper aims to achieve for MedTech.

The MedTech Sector

The MedTech sector comprises all those companies that contribute to delivering products or services that can be used in a health and care setting.  For example, it extends from surgical procedure innovations to so-called mHealth.  MedTech is one of the two sub-sectors of the broader life sciences industry, alongside pharmaceuticals. 

The MedTech sector is of considerable importance to the UK economy. According to recent Government estimates, the industry employs over 93,000 people in nearly 2,500 companies.  The sector is linked closely with universities and research institutions and generates some £17.1bn in annual turnover.  Companies with less than 250 employees make up 96.5% of the total.[1]

The Government, amongst others, acknowledges the need to preserve and grow this sector of the economy.  

How is MedTech currently regulated?

Presently, the regulation of medical devices in the UK is largely governed by EU law, principally the regime under the Medical Devices Directive ("MDD").  Under this regime, the assessment of medical devices is undertaken by an EU network of 'notified bodies' under the supervision of 'national competent authorities'.  The Medicines and Healthcare products Regulatory Agency ("MHRA") is the UK’s competent authority.

Medical devices receive market authorisation via a 'CE' marking process. The CE mark confirms that the medical device meets certain "essential requirements" of the MDD.  Once the CE mark is obtained, the device can be freely marketed anywhere in the EEA without further control.

The MDD is due to be replaced by the EU Medical Device Regulation ("MDR"), which is meant to be fully in effect by May 2020.  Notwithstanding the UK's prospective departure from the EU, the trend across the EU is thus for greater uniformity in regulatory standards.  As a regulation, the MDR would apply in Member States' domestic law without the need for any national implementing legislation.  

Implications for MedTech associated with Brexit

From a legal perspective, Brexit means that the UK will leave the EU supranational legal order and will, absent any other agreement, operate as a third country outside of this regime. EU law, which is currently a superior form of law in the UK, will lose its special status.

For some sectors of the UK economy (for example fishing and agriculture), the legal effect of our departure, as described above, could, at least hypothetically, be beneficial. UK based fishing fleets may be, for instance, no longer subject to EU controls on what they can (and cannot) fish.  This may prompt the re-growth of the UK's fishing industry.

For the MedTech sector, these opportunities – i.e. the potential for UK divergence – still theoretically exist. However, from a practical perspective, the appetite for divergence from the current regime is absent. Why is there this concern?  In part, it is because the development, manufacture and supply of medical devices is highly integrated across Europe. UK-based researchers and companies participate in pan-European research collaborations, clinical trials and supply chains in developing medical devices.  As noted by the Commons Health and Social Care Select Committee ("the Committee"), many of the "raw materials and finished products touch several jurisdictions before they are released onto the market".[2] In relation to the Committee's report, the Association of British HealthTech Industries gave the following example: "the largest supplier of needles and tubes for blood collection in the NHS manufactures its products in Plymouth. They are then taken by road to Belgium and distributed back to the UK from there. If containers cannot move freely across borders, there is a possibility that supplies will be affected."

What is the Government's position?

The White Paper has been cautiously welcomed by those involved in medicines and devices production. While the success of negotiations with the remaining EU-27 countries is critical, the Paper does address many of the industry's concerns.

A "common rule book" for goods and a "Facilitated Customs Arrangement" are proposed to ensure "frictionless trade". The proposals cover manufacturing and quality assurance processes, such as Good Laboratory Practice and Good Manufacturing Practice. Medicines and devices should only need to undergo testing once, with their release being approved by a Qualified Person ('QP'), based in the UK or EU. The proposed establishment of a free trade area for manufactured goods would mean the continuation of no tariffs on UK-EU trade and remove the need for custom checks, thus avoiding delays in the supply chain.

As already indicated, the White Paper confirms that the UK wishes to continue participation in the European Medicines Agency ("EMA"). It is accepted that the UK must pay for such participation and would no longer have ‘voting rights’. However, it is proposed that UK regulators should still be able to conduct technical work, including acting as a ‘leading authority’ for the assessment of medicines, along with pharmacovigilance safety monitoring and the forthcoming changes to the clinical trials framework.

As part of the UK's role in the EMA, the White Paper calls for “secure access to relevant IT systems, ensuring the timely transfer of data between UK and EU authorities”. There is also mention of health considerations as part of the future security relationship, including continued cooperation on the Health Security Committee, and membership of the European Centre for Disease Prevention and Control.

This White Paper also stresses the importance of a future science partnership, calling for participation in EU research funding programmes.  

Why does continuing uncertainty matter?

The Government has appreciated that much needs to be done to ensure the safe and effective supply of medicines and medical devices after the UK exits the EU. Failing this, there will be serious consequences for patients and the NHS.

It is also in the best interests of the EU-27 countries to benefit from the enormous expertise and capacity of the MHRA in order that new drugs quickly get to patients across the EU. The MHRA has international standing in the regulation and evaluation of the safety of medicines and devices.  As a lead regulator within the EU regulatory framework, it is mutually beneficial for the MHRA and the EMA to continue to work together. The Government has expressly addressed the terms on which the UK could remain part of EU agencies, including the EMA.

Failure to gain access to EU pharmacovigilance systems or to participation in clinical trials would also have serious consequences for both UK and EU-27 patient safety and product innovation. These are frameworks that have long-existed, operating across borders. The funding of many research and development projects also currently operate internationally. 

The Government is also seeking agreement with the EU to ensure the work of QPs, who certify the quality of medicines and devices, is recognised across EU countries. Until this is done, companies must consider their possible relocation. 

With this, and all other measures that will be affected by Brexit, the Government and the EU have stated that businesses need to prepare for the possibility of "no deal". All of this contingency planning costs time and money and diverts the industry from its chief objective to benefit public health.

Conclusion

MedTech is of considerable importance to the UK in terms of its health and economic benefits. The Government must support this sector strongly and prioritise the safety of all patients in its Brexit negotiations.

The sector's success is dependent in part on the legal framework resulting from the UK's membership of the EU. As Brexit day approaches, it is in the interests of both UK and EU patients for the strong relationships within this sector to continue and especially for the EMA and MHRA to work together.

Alongside urgent contingency planning for all the issues relating to the supply of medicines and devices, the Government must work towards acceptance of the White Paper's proposals as soon as possible. Regulatory alignment has always been the key priority for the industry.  Until this is achieved, resources are being diverted and investment decisions are being postponed.  Operating a business in these circumstances is highly challenging.

 

 

[1] Department of Health, Department for Business, Energy & Industrial Strategy and Office for Life Sciences, UK Government Strength and Opportunity 2016: the landscape of the medical technology and biopharmaceutical sectors in the UK (see here).

[2] House of Commons, Health and Social Care Select Committee, Brexit: medicines, medical devices and substances of human origin (see here) .

 

Authors

Alison McAdams

Alison McAdams

London - Walbrook

+44 (0)20 7894 6588

Hamza Drabu

Hamza Drabu

London - Walbrook

+44 (0)20 7894 6411

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