We have our transition period for goods but what about the regulations? How the life sciences industry may be affected by Brexit

05/04/2018

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Eleanor Denny and Greg Bacon

The European Commission published a Draft Withdrawal Agreement (the Agreement) on 19 March 2018[1]. This Agreement is an updated version of the agreement published by the Commission on 28 February 2018[2] and is the product of negotiations between the EU and British delegations that took place during the early part of March. While Chief Negotiator for the EU Michel Barnier highlighted in his press statement that “nothing is agreed until everything is agreed[3] and that there will not be legal certainty until the Agreement is ratified by both sides, he also noted this joint legal text was a “decisive step”. Therefore, this Agreement is likely to provide useful guidance on what the final position is going to be in the areas on which the EU and UK agree; however, it also highlights the areas where there is still uncertainty.

Mr Barnier explained that the Agreement was colour coded. The colours have the following meanings:

  • The green sections are “the points on which there is formal agreement between the negotiators” (therefore, it may be reasonable to assume that these provisions are likely to be in the final legal agreement between the UK and EU);
  • The yellow sections are “the points on which we have reached a political agreement, but further clarifications are needed in the weeks to come”; and
  • The white sections are “the Union's proposed text… on which we need to continue discussions, either because we have disagreements or divergences, or because we need more time to get to the bottom of things”.

This article focuses on the provisions of the Agreement from a life sciences regulatory perspective. Therefore, this article will look at: (i) the proposed transition period; and (ii) goods being placed on the market.  

  1. The transition period

The UK is currently set to leave the EU and become a ‘third country’ on 30 March 2019; however, the Agreement provides for a transition period (detailed in Part Four) that would start on the date the Agreement comes into force and end on the 31 December 2020. This provision has been highlighted in green and so has been formally agreed by negotiators. Mr Barnier explained in his statement that while the UK will no longer influence any decision making once it becomes a third country, during the transition period it will benefit from the Single Market, Customs Union and EU policies (although he also noted that during this period the UK will have to respect all the EU’s rules). This agreement is important as it will avoid a cliff-edge exit and will provide businesses with some security that they will be able to transport and supply goods during this period (see section below for more detail).

The Agreement also shows that (contrary to what appeared in the Commission’s draft in February) there is now a formal agreement to allow the UK to negotiate, sign and ratify international agreements with other third countries in its own capacity so long as these agreements do not enter into force until after the transition period. This is in line with the UK Government’s desire to enter into “free trade deals around the rest of the world under [sic] an independent sovereign nation[4] and will give the UK Government more time to set up future trading relationships post-Brexit, which should allow businesses to have more certainty regarding where they can focus investment. These would include free trade agreements with those third countries with whom the UK already enjoys free trade arrangements as a Member State of the EU, giving the UK Government at least the opportunity to ensure that there is no break in the UK’s arrangements with those countries.

  1. Goods placed on the market

The Agreement includes provisions on goods placed on the market (see Section three, Title I). It has been agreed in green at Article 37 that any specific goods already lawfully placed on either the UK or EU markets (as defined in Article 36) before the end of the transition period may continue to be made available and circulate between the two markets until they reach their end-user. However, the Agreement does not make arrangement for goods placed on the market after the transition period ends so significant uncertainty remains.

In her speech on 2 March 2018[5] Prime Minister Theresa May stated she wanted the UK-EU border to be “as frictionless as possible” and that existing models, such as those the EU has with Norway (who have to implement EU legislation automatically without having a say) and Canada (who have significantly less access than the UK currently has) would not work for the UK. However, European Council President Donald Tusk noted that a free trade agreement is the only model available; therefore, the terms of this would need to be negotiated. He also stated that, due to the loosening of ties between the UK and EU, “Our agreement will not make trade between the UK and the EU frictionless or smoother. It will make it more complicated and costly than today, for all of us. This is the essence of Brexit[6]

Of particular note for anyone working with medicinal products (human or veterinary) or medicinal devices are Articles 39-42. Summaries of what has been agreed by negotiators are set out below:

  • Article 39 on market surveillance:

Article 39 is not specific to any particular type of good and applies to all regulated products within the EU legislative frameworks. The language of this Article is not therefore specific to medicinal products and must therefore be read with this in mind. For example, “market surveillance authorities” of the EU Member States would include such authorities responsible for toys, cosmetics, machinery etc., as well as for medicinal products and medical devices. Article 39 provides as follows:

  • Market surveillance authorities of the remaining Member States and the UK (which for the UK in relation to medicinal products and medical devices means the Medicines and Healthcare Products Regulatory Agency (MHRA)) shall promptly exchange relevant information regarding goods placed on the market before the end of the transition period. Relevant information shall include any information relating to goods presenting a serious risk as well as measures taken in relation to non-compliant goods.
  • For medical devices, the remaining Member States and the UK must transmit any request from market surveillance authorities of the Members States or UK to conformity assessment bodies established in their territory that concerns a conformity assessment being carried out by that body as a notified body before the end of the transition period.
  • Article 40 on transfer of files and documents regarding ongoing procedures: Any relevant files/documents relating to any assessments, approvals and authorisations of medicinal products, veterinary medicinal products, biocidal product or plant varieties[7] that are led by a UK competent authority, e.g. the MHRA, and are ongoing before the entry into force of the Agreement must be transferred by the UK to a designated competent authority of a remaining Member State in relation to the approval/authorisation sought for the EU.
  • Article 41 information on past authorisation procedures: The UK shall make available the marketing authorisation application dossiers of medicinal products authorised by the MHRA before the end of the transition period if requested by a remaining Member State or the EMA and if said information is necessary for the assessment of the marketing authorisation[8], and vice versa (i.e. the Member States must make such information available to the UK).

Article 42 regarding information held by notified bodies (e.g. in relation to medical devices) is still in white and so is under discussion. The Commission has stated that on request of the certificate holder, a conformity assessment body established in the UK shall make available information held in relation to its activities as a notified body carried out before the end of the transition period to a notified body established in a remaining Member State and vice versa (i.e. a notified body in a Member State shall make information available to a UK based notified body). However, it is not clear what the UK’s position on this point is. What is clear is that it has been agreed by negotiators (see Article 123(6) of the Agreement) that the UK will not act as a leading authority for “risk assessments, examinations, approvals and authorisations at the level of the Union”.

The above provisions appear to be in line with existing guidance from the EMA[9] that as the UK will become a third country as of 30 March 2019, and as marketing authorisation holders (MAH) must be established in the EU (or the EEA), any marketing authorisation extending to non-UK countries that is held by a UK MAH pre-Brexit must subsequently be held by an MAH established in the EU after this date. From the information currently available it does not appear that the transition period will apply to these regulatory requirements, although the EMA’s guidance is not binding. The Agreement appears to provide for the transfer of information between the Member States and the UK that will be required post-Brexit (further guidance for those involved with products authorised under the centralised procedure can be found on the EMA website[10]).

Additionally, a further concern for manufacturers and MAHs is that at the end of the transition period the Agreement states that the UK will no longer be entitled to access “any network, any information system, and any database established on the basis of Union law”. This could have significant implications for manufacturers and MAHs, for example if they cannot access the EudraGMDP database[11] or EudraVigilance database[12].

In a speech on 2 March 2018 Mrs May stated that the UK wants to “explore with the EU, the terms on which the UK could remain part of EU agencies”, including the EMA. For example, becoming an associate member of the EMA might allow products to only undergo one series of approvals for both the EU and UK and the UK’s MHRA could continue to provide its technical expertise. However, the European Council’s Draft Guidelines[13] published on 7 March 2018 (and reiterated in the Council guidelines from the 23 March[14]) state “there can be nocherry picking” through participation based on a sector-by-sector approach” and that the UK as a third country will be excluded from “the Union Institutions and participation in the decision-making of the Union bodies, offices and agencies”. Therefore, in light of this and the agreed terms within the Agreement it appears unlikely that Prime Minister May’s proposal will be accepted.

Conclusion

While not everyone is happy with the Agreement it does at least provide some comfort that there will be a transitional arrangement allowing businesses to continue to trade their goods within all of the current Single Market and Customs Union for a short period. However, there does not seem to be any extension of time provided from a regulatory perspective in getting the necessary authorisations transferred or systems in place within the EU/EEA. Therefore, based on the EMA’s advice as it currently stands (albeit this was written before the current Agreement text was published), there is a real risk for companies if they delay making the relevant transfers of MAs from UK MAHs to those established in the EU/EEA. Given that there remains a lack of clarity on whether the final binding transitional agreement will extend to the place of establishment of MAHs during the transitional period, and that the EMA has yet to release any updated guidance following the publication of the Agreement, companies are currently in limbo as to what will ultimately have to be transferred to the EU and by when.



[7] Directive 2001/83/EC; Directive 2001/82/EC; Regulation (EU) No 528/2012; and Regulation (EC) No 1107/2009

[8] Under Articles 10 and 10a of Directive 2001/83/EC or Articles 13 and 13a of Directive 2001/82/EC

[11] EudraGMDP: the Community database on manufacturing, import and wholesale distribution authorisations, and good manufacturing-practice (GMP) and good distribution practice (GDP) certificates.

[12] EudraVigilance: the system for managing and analysing information on suspected adverse reactions to medicines which have been authorised or being studied in clinical trials in the European Economic Area (EEA).



The European Commission published a Draft Withdrawal Agreement (the Agreement) on 19 March 2018. The Agreement is likely to provide useful guidance on what the final position is going to be in the areas on which the EU and UK agree; however, it also highlights the areas where there is still uncertainty. 
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