Topical Issues

Brexit and medicines regulation (September 2017 update)

September 2017

The fourth round of ‘Brexit’ negotiations between the UK and the EU has finished. The parties are reportedly still wide apart on the issue of how much money should be paid by the UK to the EU and for what. Previously, in order to broker the Government’s vision of the future partnership that it believes is on offer between the UK and the EU, the British Prime Minister, Theresa May, had intervened with a new speech in Santa Maria Novella, Florence. Despite the apparent lack of progress in the talks, however, there has been activity over the summer period which tells us more about what the relationship the UK Government is seeking with the EU post-Brexit looks like. In particular, a number of papers issued by the UK Government outline what it would like to agree for the regulation of medicinal products, including medical devices. From these papers, a clearer position is starting to emerge from the UK that continued coordination and cooperation is the desired outcome from the negotiations. Nevertheless, as discussed in this article, further progress is needed to provide businesses the clarity that they need to plan for the future.

As we explain in our June update, when currently obtaining a marketing authorisation (“MA”), there are three specific routes available in the EU (and in the European Economic Area (“EEA”) states of Norway, Iceland and Liechtenstein): the centralised procedure (“CP”); the mutual recognition procedure (“MRP”); and, the decentralised procedure (“DCP”).

These procedures are governed by EU Regulation 726/2004 (the “Regulation”) and EU Directive 2001/83 (the “Directive”). The Directive is already implemented in UK law and, on exit day, the Regulation will be enacted into UK law by the European Union (Withdrawal) Act 2017 (the Bill of which is currently passing through the legislative procedures of the UK Parliament). The key question is whether these procedures can then simply continue post-Brexit? As we also explained in our June update, the answer is that whilst the Medicines and Healthcare Products Regulatory Agency (“MHRA”) will continue to grant MAs in the UK under the legislation transcribed by the Withdrawal Act, it cannot, without agreement, participate in the CP, MRP and DCP procedures at the pan-European level; these all require cooperation and mutual recognition between the UK and the EU / EEA member states. Similarly to medicinal products, much depends on whether agreement can be reached on the mutual recognition of medical device CE marks, post-Brexit. In particular, any medical device manufacturer will want to be able to place their CE marked device on the UK market and the EU market without going through separate procedures and the use of separate Notified Bodies.

The consequences of no agreement in the area of medicines are set out in the European Commission’s and EMA’s summary in their Q&A document published on 31 May1, and the parallel list of requirements relevant to nationally authorised medicinal products through the MRP and DCP published by the Coordination Group for Mutual Recognition and Decentralised Procedures (CMDh)2. These documents set out the requirements of the Directive and the Regulation for MA holders and manufacturers importing from the UK into the EU/EEA, on the basis that, after Brexit, the UK will be defined as a “Third Country”. The requirements listed include: the transfer of MAs to holders established in the EU/EEA; authorisation or certification of UK based manufacturers of active ingredient and finished product in order to import into the EU/EEA; the location of batch control and release sites to be situated within the EU/EEA; as the location of Qualified Persons in the EU/EEA.

If no cooperation and mutual recognition agreement can be reached, the probable outcome is that the UK would reciprocate these requirements by requiring EU/EEA based pharmaceutical companies to comply with precisely the same requirements in respect of the UK. However, this is a “worst case scenario” and while the MHRA has acknowledged that it is aware of the Q&A documents it has re-iterated that “Whatever the outcome of the negotiation we will continue to collaborate with all involved to deliver the current speed of authorisations, [and] access to new and innovative medicines and devices…”.

Official publications and statements from the UK Government have been short of detail, but suggest that the aim is to strike a deal with the EU27. In a joint public statement made on 4 July 2017, the Secretary of State for Health, Jeremy Hunt MP, and Secretary of State for Business, Energy and Industrial Strategy, Greg Clark MP, made clear that the Government wants to retain a close working partnership in respect of medicines regulation after Brexit — implying the continuation in some form of the current system. This is consistent with the British Prime Minister’s Lancaster House speech, and a Government White Paper, which refer to the need to maintain certain areas of regulation.

There is more on what a close working partnership might mean in a paper published by the UK Government, on 21 August, titled: Continuity in the availability of goods for the EU and the UK: a position paper. Like the other papers discussed in this article, the availability of goods paper is intended as a starting point — a beginning for negotiations between the UK and the EU on the UK’s exit and future trade relations with the EU — not a full and final position. This particular paper sets out the Government’s desire to ensure the continued availability of goods in the EU and the UK after Brexit, which includes medicines and devices. In an apparent rebuttal of the presumptions made in the above Q&A documents, the paper states that “it makes sense to recognise our common regulatory systems and the UK’s ambition for cooperation in the future”. What this means for products is set out in a number of principles of direct relevance to medicinal products and medical devices:

A. Goods placed on the single market before exit should continue to circulate freely in the UK and the EU, without additional requirements or restrictions. This includes, but is not necessarily limited to:

a. ensuring there are no requirements to change labeling for these products;
b. recognising the validity of approvals, registrations and authorisations issued for these products; and
c. where there is a requirement to have a person responsible for compliance with particular product regulations based in the EU (an example given is Authorised Representatives for medical devices), that person should be able to continue carrying out that responsibility for products placed on the market prior to exit, whether based in the EU or in the UK; there should be no requirement to relocate.

B. Where businesses have undertaken compliance activities prior to exit day, they should not be required to duplicate those activities in order to place goods on the UK and the EU market after exit. To achieve this, the paper states that compliance should be recognised for both the UK and EU markets regardless of where the activity took place. One example given of such activity is the re-inspection of approved manufacturing plants. The paper also proposes that testing and batch release by Qualified Persons should continue in the same country of location, post-Brexit (that is, separate Qualified Persons should not be required in the UK and the EU).

C. The agreement should facilitate the continued oversight of goods. The paper cites as examples requirements on MA holders to report adverse reactions to medicines. The paper suggests that agreement between the UK and the EU should stipulate, amongst other measures, that assessment bodies should continue to be recognised to fulfil any ongoing obligations for the lifetime of the products concerned and there should be ongoing data exchange where currently provided for.

“the Government wants to retain a close working partnership in respect of medicines regulation after Brexit”

The above position paper largely emphasises the approach the Government wants to take to products with existing authorisations. However, the reference to “the UK’s ambition for cooperation in the future” clearly suggests that it also has future arrangements in mind. This is supported by a later paper, dated 7 September and titled Collaboration on science and innovation: a future partnership paper. This paper is largely concerned with proposals for UK participation in future medical research, amongst other areas of science, as well as reiterating the Government’s intention to underwrite 2020 funding. However, the paper also alludes to the UK’s commitment to a close working relationship with the EMA on medicines regulation. The suggestion is again that the Government envisages continued partnership between the MHRA and the EMA.

It might be thought that agreement on these matters ought to be a matter of common sense, but this is to ignore the question of the ultimate arbiter of the law, which raises more ideological considerations. This issue is addressed in another paper, dated 23 August, Enforcement and dispute resolution: a future partnership paper. The dispute resolution paper does not refer to medicines regulation specifically. There are aspects of the paper, however, that implicitly envisage agreement on mutual recognition of authorisations and related measures between the UK and the EU (be that in a medicines regulation context or otherwise). This is apparent in the paper’s reference to the problem of “divergence”: if the EU and UK agree cooperation and mutual recognition of MAs granted in their territories, the regulatory law on which these are based must remain identical. If, however, the UK Supreme Court makes the ultimate decisions about how this law applies in the UK and the CJEU does the same for the EU, it is inevitable that they will at some point make different decisions and the law will diverge.

The suggested solution to the problem of divergence is the use of a single decision making body with authority over both parties. In her Lancaster House speech of 17 January 2017, the British Prime Minister stated that this body cannot be the CJEU. The dispute resolution paper therefore suggests a number of precedents for other dispute resolution bodies, although it appears to be seeking a bespoke body rather than any of the examples given. One plausible way of achieving this is the use of a joint panel of senior UK and EU judges to make such decisions. That would apparently be acceptable to Brexiteers in the UK Government, but it may not be politically acceptable to some in the EU.

Assuming that agreement on the above issues can be reached, there is a more practical problem likely to be encountered by businesses marketing medicines and devices in Europe. This is caused by the separation of the Brexit negotiation process into a stage addressing exit issues followed by a stage concerning future trade issues. The regulatory issues discussed above can only realistically be resolved by discussing both at the same time because questions arise both on how existing MA rights should be dealt with and how the process might work going forward. However, on the one hand, the Commission has resolved not to progress with the second stage until “sufficient progress” has been made on resolving the question of money. On the other hand, the UK Government has suggested that no payment of money will be agreed until the very end of the negotiating process. There is a strong possibility, therefore, that all of the above issues, legal and financial, will not be agreed until the very end of negotiations.

All of this leaves businesses asking whether they should prepare for the duplication of activity implied by a ‘no deal’ scenario, or whether they should wait. One way in which that problem might be alleviated is the implementation of a transitional, or implementation, period after exit day. Indeed, the idea of maintaining the regulatory status quo for no more than two years was raised by the Prime Minister in her Florence speech. It is, however, also another matter that will need to be agreed and presumably this will also only be possible after sufficient progress is made on the terms of exit. So, while the emerging clarity on the UK’s position is encouraging, there is a long way to go before businesses have any clarity on what the future will bring and are able properly to plan for it.

1. Full title: Questions and Answers related to the United Kingdom’s withdrawal from the European Union with regard to the medicinal products for human and veterinary use within the framework of the Centralised Procedure.

2. Questions and Answers related to the United Kingdom’s withdrawal from the European Union with regard to national authorised medicinal products for human use.

Matthew Royle

Matthew is a partner in the patents group based in London.

Paul England

Paul is a senior associate and professional support lawyer in the patents group based in our London office.

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