News and Publications

Brexit no-deal technical notices - implications for the life sciences sector

Posted: 18/10/2018

On 23 August 2018, the UK Government published the first tranche of a series of technical notices providing guidance for businesses on how to prepare for a scenario in which the UK leaves the EU without an agreement (ie a ‘no-deal’ Brexit). A number of the technical notices are relevant to the life sciences sector - in particular the technical note entitled ‘How medicines, medical devices and clinical trials would be regulated if there’s no Brexit deal’. Some of the implications for the life sciences sector, based on this first tranche of technical notices, as well as the technical notices on drug precursors and data protection published in September 2018, are considered in this article.

Original news

The Department for Exiting the European Union has published the first tranche of technical notices designed to inform individuals, businesses and public bodies in the UK of the implications of exiting the EU in March 2019 without a deal. The 25 documents cover a range of subjects including: agriculture, education, EU funding, financial services, medicines and medical devices, nuclear research, product labelling and safety, State aid, tax, trade and workers’ rights.

What are the implications of a no-deal Brexit scenario on the manufacture, marketing and sale of medicinal products in the UK?

In the event of a no-deal Brexit, the UK would no longer to be part of the European Medicines Agency (EMA). The UK’s Medicines and Healthcare products Regulations Agency (MHRA) would take on the functions currently carried out by the EU for medicines in the UK market. This would require amendments to the Human Medicines Regulations 2012, SI 2012/1916, and the MHRA is planning a public consultation in early autumn 2018. A further, more detailed, technical note on the future medicines regulation in the UK is expected after the consultation.

The Marketing Authorisations (MAs) of Centrally Authorised Products (CAPs) will automatically be converted (known as ‘grandfathering’) into UK MAs on 29 March 2019 (exit day) - unless opted out. The MHRA will write to all CAP MA holders (MAHs) prior to exit day to inform them of the conversion process. New MA applications in the UK would need to be submitted to the MHRA for national assessment. New MA applications for the EU–European Economic Area (EEA) market will need to be submitted to the EMA. This will mean duplication of applications as between the MHRA and EMA. The technical note indicates that the MHRA will take a streamlined approach to approving UK MAs that ensures UK patients can access new medicines at the same time as EU patients. For applications via the centralised procedure in progress at the time of exit day, the application as submitted to the EMA will need to be submitted to the MHRA. If the Committee for Medicinal Products for Human Use has issued an opinion by exit day, then that will be taken into account by the MHRA when making its decision. If not, the MHRA will continue to assess the application as a national procedure.

After a no-deal Brexit, the UK will not be part of the EU centralised mutual recognition and decentralised procedures for authorising medicines (MR/DC). Medicines that received an MA via the MR or DC route prior to 29 March 2019 will be unaffected, as they already hold a UK MA. For MR or DC procedures in progress at time of Brexit, a transitional provision has been proposed. The MHRA will complete the assessment (the transitional process for this will depend on how far the procedure has progressed immediately before exit day) but if successful, these applications will be approved as a UK MA.

Since the MHRA will not have access to data provided in support of EU approved products, new generic applications after a no-deal Brexit will need to be based on reference products authorised in the UK. Existing MAs for generic products that are based on a reference product in the EU would remain valid.

The UK will continue to accept batch testing of medicines and investigational medicinal products carried out in countries on a list to be provided by the MHRA, which would include the EU and EEA countries, plus those countries with which the UK has a mutual recognition agreement. For medicines manufactured in a country on the list, the UK would continue to recognise certification, release and assurance of compliance with the MA and the Good Manufacturing Practice (GMP) guidelines, if conducted by a qualified person (QP) based in the listed country.

How would a no-deal scenario affect pharmacovigilance and safety reporting?

The MHRA’s existing requirement for a named individual who can be contacted in the event of a safety issue will continue. The MAH will need to be established in the UK by the end of 2020 and, until then, the MHRA will require a contact in the UK.

The QP for pharmacovigilance should be established in the UK from exit day, but those without a current UK presence will have until the end of 2020 to do so - provided the MHRA has access to the relevant safety data related to UK MAs from exit day. A QP for products manufactured in the UK or directly imported into the UK from a country not on a designated country list (whitelist) must reside and operate in the UK.

After a no-deal Brexit, the UK would no longer be part of EU systems for sharing pharmacovigilance data. The MHRA will have primary responsibility for the conduct and oversight of pharmacovigilance activities. UK MAHs would be required to submit pharmacovigilance data (UK and non-UK individual case safety reports and periodic safety update reports) directly to the MRHA.

What impact would a no-deal Brexit scenario have on the ability of a UK company to conduct clinical trials in the EU?

The technical note indicates that the UK’s ability to participate in European multinational trials (involving the UK) will not change. However, sponsors would need to have a legal representative in the EU or EEA and would also need to apply for clinical trial authorisation to both the MHRA as well as to the regulators of EU concerned Member States, although the MHRA would take every effort to ensure that the parallel submission is as streamlined and efficient as possible. The existing clinical trial requirements for clinical trials run in the UK would remain the same. UK clinical trial applications will continue to be authorised by the MHRA and the ethics committees. For UK-based clinical trials, sponsors or legal representatives may continue to be based in the EU or EEA but will need to have an individual based in the UK who has overall responsibility for the trial and who can be contacted in relation to urgent issues. Further details on this requirement are promised in due course.

Will the new EU Clinical Trials Regulation (CTR) be implemented in the UK?

The new CTR will not be in force in the EU on exit day and so will not be incorporated into UK law under the EU (Withdrawal) Act. The UK Government has indicated that it will align, where possible, with the CTR when it comes into force in the EU, subject to the usual parliamentary approvals. The CTR is expected to be in force in the EU in 2020.

How would a no-deal Brexit affect the regulation and sale of medical devices in the UK?

For a limited period, the UK would continue to recognise the CE mark on medical devices and devices would be accepted on the UK market if they meet all EU requirements, which for all but the lowest-risk devices would include certification by EU notified bodies. Further detail on the future process will be subject to consultation in due course. The Government has indicated that it will allow adequate time for businesses to implement any new requirements.

UK-based notified bodies would no longer be able to assess the conformity of medical devices for devices to receive the CE mark and enter the EU market, and so they would no longer be able to issue CE certificates of conformity.

Will the new EU medical device regulations be implemented in the UK?

The UK has indicated that it will comply with all key elements of the Medical Devices Regulations 2002, SI 2002/618 and the In Vitro Diagnostic Medical Devices Regulation, (EU) 2017/746, which will apply in the EU from May 2020 and 2022 respectively.

How would a no-deal scenario affect device vigilance and safety reporting?

The MHRA would continue to perform national post-market surveillance of medical devices on the UK market and take a national decision over the marketing of a device in the UK, regardless of the position of the European regulatory network, or any decision of the Court of Justice of the European Union (CJEU).

What does the no-deal technical notice envisage as regards the sharing of blood, blood components and information with EU partners post-Brexit? What quality and safety standards would be applicable?

If there were no-deal, the Directive 2002/98/EC and Directive 2004/33/EC (EU Blood Directives) would no longer apply to the UK. Arrangements for sharing blood, blood components and information with EU partners would be based on the UK’s status as a ‘third country’ (ie a jurisdiction outside of the EEA). Those importing blood or blood components to the UK from the EU for transfusion would need to add a description of activity to cover import to their blood establishment authority. Blood or blood components exported from the UK to the EU would need to be tested in conformity with the EU testing requirements and would need to meet equivalent standards of quality and safety. The Government recommends consulting with the MHRA when importing or exporting to or from the EU. The UK’s current blood safety and quality standards for blood would not change as the Blood Safety and Quality Regulations 2005, SI 2005/50 would be retained in UK law under EU (Withdrawal) Act powers.

What does the no-deal technical notice envisage as regards access to and use of organs, tissues and cells? What quality and safety standards would be applicable?

If there were no-deal, Directive 2004/23/EC and Directive (EU) 2015/566, the EU Organ Directives and EU Tissues and Cells Directives would no longer apply to the UK. Since UK law already implements the EU directives, the safety standards would not change, but the UK would become a ‘third country’ and the law would be amended under the EU (Withdrawal) Act to reflect this change. UK licensed establishments would continue to work to the same quality and safety standards as they did before exit day, but some would need new written agreements with relevant EU establishments. UK licensed establishments that import or export tissues or cells from EEA establishments would need to put in place written agreements with those EEA establishments to continue importing or exporting these products post-exit day. The Government anticipates that this will be a minimum burden on industry. For example, establishments that already hold an import licence to import tissues and cells from ‘third countries’ could use their existing written agreements with ‘third country’ organisations as a template.

What will the impact of a no-deal scenario be on the trade of pharmaceuticals and medical devices between the UK and the EU?

The supply chain for pharmaceuticals and medical devices imported from the EU and EEA are likely to be affected by changes to border processes and procedures arising from a no-deal Brexit. The Department of Health and Social Care (DHSC), also on 23 August 2018, wrote to pharmaceutical companies and separately to suppliers of medical devices outlining steps that need to be taken to limit the disruption caused by a no-deal Brexit. The DHSC asks suppliers of medicinal products to:

  • increase their medicines stocks by at least six weeks on top of their usual buffer stocks
  • put in place plans to air freight products with a short shelf like that cannot be stockpiled

Suppliers of medical devices and clinical consumables were contacted in September 2018 to start discussing their contingency plans and, where necessary, the need for an increase in the production and supply of products.

How would a no-deal scenario impact on parallel distribution and imports of pharmaceuticals and medical devices?

The UK has indicated that, in order to provide continuity for business, it will unilaterally align to the EU–EEA exhaustion regime and will convert all currently approved parallel distribution authorisations of CAPs into parallel import licences. However, it is indicated that this would be a temporary fix and that the UK will consider all options for how the exhaustion regime should operate after the temporary fix.

How would a no-deal scenario affect the trade of drug precursors for medicinal purposes?

Drug precursors are chemicals that, as well as having legitimate commercial uses, can be used in the illicit manufacture of narcotic drugs. If there were no-deal, the EU regulations that regulate intra-EU trade in drug precursors would no longer apply to the UK and the UK would be treated by the EU as a ‘third country’. This means that UK organisations trading with countries in the EU would need the same licences and registrations as are currently needed by those in the UK to trade drug precursors with non-EU countries. The requirements vary depending on the category of drug precursor in question. For example, for category 1 substances organisations would need to apply for import and export licences and provide a pre-export notification (PEN). For category 2 substances, organisations would need to make an application for registration with the Home Office regardless of volume (currently registration is only required for category 2 if certain volumes are exceeded), together with applications for export licences and, in some cases a PEN. Fees are payable for all domestic licences or registrations and range from £109 to £3,655 depending on whether the applicant already holds a licence. The fee for an individual export or import licence is £24. Further information on the licensing, registration and PEN requirements are set out in the technical note issued in September 2018.

The licensing and registration requirements for organisations that trade in drug precursors only in the UK or with non- EU countries will not be affected by a no-deal scenario.

Will UK-based online pharmacies be able to sell to customers in the EU?

UK-based online pharmacies would still be able to sell to customers in the EU, subject to complying with EU customs procedures arising from a no-deal Brexit, obtaining appropriate export licences, providing appropriate documentation and complying with UK medicines legislation. The online pharmacy would also need to comply with the laws that apply in the destination country (not all countries allow medicines to be sold online) and would need to ensure that the medicine to be supplied has the marketing authorisation needed for it in that country.

Currently UK-based online pharmacies have to register with the MHRA and display the EU common logo in order to sell into the EU. If there were a no-deal Brexit, UK-based online pharmacies would be treated by the EU as being based in a ‘third country’ and so would no longer be required to display the EU logo but would still need to register with the MHRA to sell online under the UK Human Medicines Regulations 2012. The UK has indicated that it intends to explore the use of a new UK logo for UK-based online sellers from 2021 to help customers identify legitimate medicine websites.

What does the no-deal technical notice envisage regarding access of UK-based researchers, universities and businesses to EU funding and participation in EU-funded programmes such as Horizon 2020?

The Government will guarantee funding for competitively bid for EU projects submitted before the exit date, including Horizon 2020 projects, for the full duration of the projects. The guarantee does not cover funding for organisations from other countries who are in consortia with UK participants. The UK will seek to discuss with the EU how best to address the situation where UK participants lead a consortium and are responsible for distributing funding to the other participants. These discussions would also include consideration of projects where the UK’s change in status to third country could lead to concerns about ongoing compliance with Horizon 2020 rules. The Government is considering what other measures may be necessary to support UK research and innovation in a no-deal scenario.

How would a no-deal scenario affect the flow of personal data between the UK and the EU?

On 13 September 2018, the UK published a technical note on data protection. The note provides that, in the event of no-deal, there would be no immediate change in the UK’s own data protection standards since the Data Protection Act 2018 would remain in place and the EU (Withdrawal) Act would incorporate the GDPR into UK law to sit alongside it. There will be no changes required for UK companies wishing to transfer their data to the EU. However, the legal framework governing transfers of personal data from EU organisations to UK organisations would change on exit day.

The EU has an established mechanism to allow the free flow of data to countries outside the EU, namely an adequacy decision. Although the UK Government has indicated that it is willing to begin preliminary discussion on an adequacy assessment now, the European Commission has stated that the decision on adequacy cannot be made until after exit day, when the UK will be a ‘third country’. In the meantime, a legal basis for the transfer of personal data from the EU to the UK will need to be established and organisations are advised to proactively consider what action should be taken to ensure the continued free flow of data with their EU partners. For the majority of organisations, the technical note indicates that the most relevant alternative legal basis would be standard contractual clauses. These are model data protection clauses that have been approved by the European Commission and enable the free flow of personal data when embedded in a contract. The Information Commissioner’s Office has indicated that it will publish additional guidance to help organisations meet their data protection obligations and remains committed to pushing for close co-operation and cohesive enforcement action with the European Commission and other EU data protection authorities. 

Following the publication of the no-deal technical notices, what steps would you advise organisations operating in the UK’s life sciences sector to take in order to ensure that they are prepared for a no-deal scenario?

The technical notes provide some further clarity on the position in the event of a no-deal Brexit and should be considered by all UK organisations operating in the life sciences sector. In light of the notes, organisations should review their supply chains, identify their areas of potential risk from a no-deal Brexit and consider what contingency plans are needed, particularly to address continuity of supply. Organisations will want to keep abreast of any additional technical notes and such other further guidance as it becomes available.

This article was first published on Lexis®PSL Life Sciences on 8 October 2018. Click for a free trial of Lexis®PSL.

Arrow GIFReturn to news headlines

Penningtons Manches Cooper LLP

Penningtons Manches Cooper LLP is a limited liability partnership registered in England and Wales with registered number OC311575 and is authorised and regulated by the Solicitors Regulation Authority under number 419867.

Penningtons Manches Cooper LLP