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Brexit Update

Posted on 27 March 2018

Brexit Update

As the Brexit negotiations continue, the life sciences industry remains vocal. Central to its arguments has been: (1) the need for an agreement that will allow continued co-operation between the UK and the EU27 on the regulation of medicines and medical devices, and which will prevent issues in continued supply to patients across the EU; and (2) an interim arrangement of at least two years to avoid a 'cliff face' outcome.

On 19 March, the EU27 and the UK announced that a number of issues in the draft Withdrawal Agreement had been agreed, alongside a transition (or 'implementation') period which will continue to 31 December 2020. The Withdrawal Agreement remains in draft until all aspects of it have been agreed. Likewise, the transition period will only be approved once all aspects of the Withdrawal Agreement are agreed. The draft Withdrawal Agreement has been colour coded – green to show those aspects that are agreed, yellow to show those where there is political agreement but the legal text needs to be agreed, and white where there is no agreement yet or discussions have not commenced.

The industry will also have welcomed the Prime Minister's 'Road to Brexit' speech in early March where she expressed a commitment that, post-Brexit, "UK and EU regulatory standards will remain substantially similar in the future". Further, she explained that the UK would explore the terms on which it could remain part of the European Medicines Agency, i.e. associate membership, which would mean "investment in new innovative medicines continuing in the UK… these medicines getting to patients faster as firms prioritise larger markets when they start the lengthy process of seeking authorisations. But it would also be good for the EU because the UK regulator assesses more new medicine than any other member state".  However, this would of course mean the ECJ retaining jurisdiction, which has previously been a 'red line' – a point the Prime Minister recognised when she said "… if we agree that the UK should continue to participate in an EU agency the UK would have to respect the remit of the ECJ in that regard."  The Prime Minister further stated that associate membership would "of course … mean abiding by the rules of those agencies and making an appropriate financial contribution".

Meanwhile, in its recently published Report, the House of Commons Health and Social Care Committee has called for the closest possible regulatory alignment with the EU, whilst also recognising the need for contingency planning for a 'no deal' situation, given the EU27's stated position on a sectoral approach to regulatory alignment. 

Industry position papers

Recent examples of the industry continuing to press its points include:

  • The Brexit Health Alliance issuing a paper in January 2018 (Brexit and the impact on patient access to medicines and medical technologies) which called upon both sides to co-operate and reach agreement on an implementation period. The paper highlighted a concerning case study relating to a treatment for prostate cancer which is manufactured in the UK only, but which is sold globally in 80 countries: up to 120,000 patients across Europe could be affected if there were supply issues post-Brexit.
  • The Life Science Industry Coalition issuing a position paper in December 2017 raising the following issues:
    • people and patients should be a primary consideration for the phase two negotiations
    • continued alignment of the intellectual property and legal frameworks
    • regulatory co-operation, including mutual recognition of regulatory activities and quality testing
    • trade and supply: medicines should continue to be able to move between both regions
    • transition period, identified as critical to ensuring patients can continue to access medicines post-Brexit

EMA continues to drill home message: prepare for 'no deal'

In the meantime, the EMA has also updated its Guidance and Q&A document, which are based on the UK being a 'third country' post-Brexit, i.e., on the basis that no deal is reached in relation to continued co-operation. The updated EMA document covers a range of issues not previously covered such as the impact on generic and biosimilar marketing authorisations. It also contains some stark recommendations: for example, it 'strongly recommends' that UK-based applicants of marketing authorisation applications (MAA) should change to a non-UK applicant before submitting the MAA. It has also issued a survey to UK-based holders of centralised marketing authorisations to assess their preparedness for Brexit (the survey closed on 9 February and we will report on the results in due course).  

As for the EMA itself, its new permanent premises in the Zuidas business district of Amsterdam will not be ready for occupation until November 2019, but the Dutch Government has made temporary accommodation available from January 2019 (further details on the relocation can be found on the EMA's recently launched relocation tracking tool).

MHRA materials: more balanced, but recognises need for certainty

In contrast to the EMA's materials, the MHRA's recently issued update to pharmaceutical companies starts from the premise that there is a shared interest in ensuring continuity of supply and a close future partnership. It also noted that the EU27 recognise the importance of a time-limited period in which to provide certainty and continuity to business and to patients.

However, MHRA accepts that businesses need to prepare 'for all outcomes' and it confirms it will publish its 'Day one and longer-term proposals' in the event of no ongoing relationship with EMA networks when appropriate. Its approach in any such scenario would be in line with the following principles:

  • the EU Withdrawal Bill will convert the existing EU legislative framework into UK law on exit, 'so there would be no sudden changes to the UK regulatory framework'
  • it would be 'pragmatic in establishing UK regulatory requirements', would give adequate notice and ensure companies have sufficient time to implement any changed requirements
  • where possible, it would make use of information it already has to complete administrative tasks
  • it would ensure the 'minimum disruption and burden on companies', whilst building on the existing relationship between MHRA and firms

Can the industry get a deal – where others can't?

In December, we held a panel discussion with guest speakers Sir Alasdair Breckenridge (Former Chair, MHRA), Jonathan Mogford (Director of Policy, MHRA), Steve Bates (Chief Executive, BIA) and Sarah Rickwood (Vice-President Thought Leadership (Europe), QuintilesIMS).

Whilst all on the panel recognised the immense challenges ahead, the general mood was one of optimism and positivity about the future of the UK life sciences sector. Indeed, as noted by Mishcon de Reya Partner Rob Murray, "it may just be the one sector that pulls it off'" in terms of reaching an arrangement that works for the UK, EU27, business and patients alike, whilst also navigating the redline of the role of the ECJ – perhaps a Swiss-style relationship model may be the preferred approach.

Jonathan Mogford of the MHRA commented on the unique position of the UK in terms of its contribution to the scientific assessment of medicines and that "the preferred scenario would be continuing pretty closely with what we do at the moment certainly at that scientific level and there is absolutely no reason practically, if the will is there, why the UK couldn't remain around the table participating in those scientific assessments coming up with a shared and agreed view". In any event, as Steve Bates put it at the discussion, it is hoped that: "technology will trump political super-structures".

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