At the time of writing, Brexit is set for October 31, 2019, and we are faced with three possible outcomes: no-deal, a deal or a delay. In August this year, many of the UK’s professional healthcare bodies, including the Royal Pharmaceutical Society, wrote to the Prime Minister expressing their concern at the potential for a no-deal Brexit. This scenario would mean that the UK operates as a third country outside the EU’s regulatory and legal order.
With so much still up in the air, and parliament now suspended until October 14, how can the pharmaceutical sector prepare?
Guidance and planning
The government continues to issue guidance and provide funding with the stated aim of supporting businesses in both deal and no-deal scenarios. The European Medicines Agency (EMA) has also issued bespoke guidance.
Nonetheless, Brexit disruption could still have significant effects on the life sciences sector and so businesses should attempt to plan for all eventualities in the lead up to October 31.
Part of that planning should include keeping up to date with the latest Government advice and announcements, which currently include the following areas.
Online tool
The government has published an online tool to assist businesses in preparing for Brexit. It guides businesses to the correct advice based on answers to a short questionnaire.
Business readiness fund
On August 29, business secretary Andrea Leadsom announced the release of a £10 million grant for business organisations and trade associations to support businesses in preparing for Brexit ahead of October 31. The UK BioIndustry Association announced that they have applied for a grant under the scheme and the government has indicated that successful applications will be announced in September 2019.
Freight capacity
At the end of June, the Department of Health and Social Care announced that the government is to invest £434 million in securing freight capacity, warehouse space and fridges in order to assist with stockpiling medicines. On August 15, the government invited tenders for a £25 million contract for an express freight service to transport urgent medicines after Brexit. How this is to work in practice remains to be tested.
Port upgrades
On August 30, the Department for Transport launched a £10 million Port Infrastructure Resilience and Connectivity Fund for English ports in the run up to October 31 “to help deliver upgrades which will enhance capacity and maintain trade flow.” It has been reported that every month, 45 million packs of medicines move from the UK to the EU and 37 million go the other way, so such upgrades are pivotal to ensuring that the movement of medicines to and from the UK is facilitated. Yet, no specific details on how the fund will work in practice have been seen.
Regulation of medicines
The Medicines and Healthcare products Regulatory Agency (MHRA) has continued to update its guidance on the regulation of medicines, medical devices and clinical trials, focussing on a no-deal Brexit scenario, with the latest guidance updated on September 3. In summary, when the UK leaves the EU, the MHRA will take on the EMA’s role and there are measures in place to make the transition as smooth as possible. Currently, many medicines come to market via the EMA’s centralised process. Medicines approved via this route are known as CAPs (Centrally Approved Products). To ensure that these medicines will continue to be authorised for use in the UK upon Brexit, all medicines with centrally approved Marketing Authorisations (MA) will automatically convert into UK MAs, unless Marketing Authorisation Holders (MAHs) opt out. In November 2018, the MHRA wrote to the industry about the automatic conversion, referred to as the “grandfathering” process and the dialogue has been ongoing.
In terms of legal presence requirements, insofar as the UK market is concerned, MAHs should be established in the UK by July 31, 2021. If the MAH is not established in the UK on the day of Brexit, companies will be expected to put in place a UK-based contact person within four weeks.
The Qualified Person for Pharmacovigilance (QPPV) should be established in the UK immediately after Brexit, although those without a current UK presence (but with an EU QPPV) will have an exemption until July 31, 2021, to arrange this.
Regulation of medical devices
At present, all medical devices placed on the UK market are subject to EU regulation. As of November 1 2019, it is intended that the UK will adopt a regulatory system which will mirror all the key elements contained in the relevant EU regulations. The regulations will include a requirement that all medical devices will need to be registered with the MHRA prior to being placed on the UK market. This responsibility will be taken over from the EMA. There is some doubt as to whether the EU will consider the UK system to be adequate post exit – the UK will most likely be treated as a third country.
Clinical trials
The UK is currently part of a European network for clinical trials, which will come to an end on Brexit. The UK’s intention is that for trials which have already been approved, the approval will stand. The UK will require the trial sponsor to be in the UK or a country on an approved country list (which initially will include EU/EEA countries). In contrast, the EU’s position is that pan-EU trials must have EU-based sponsors or legal representatives (i.e. UK-based will not be sufficient).
Serious shortage protocol/dispensing
In February this year, the ‘Serious Shortage Protocol’ legislation was passed, which is intended to enable pharmacists to dispense medicines against a protocol, rather than against a prescription where the prescribed item is not available. Whilst the shortage of medicines is an ongoing problem, healthcare providers have expressed patient safety concerns. Attempts to challenge the legislation through the High Court have been unsuccessful. It is expected that the SSP will only be used in exceptional circumstances.
Stockpiling
Imports and exports of drugs are crucial for use in hospitals, clinical trials and research. Ahead of the March 2019 Brexit date, the government advised that suppliers should keep at least an additional six weeks’ worth of stock, in addition to their usual buffer stock, as well as securing alternative freight capacity and “trader readiness” (i.e ready to meet the new requirements). In June 2019, the Department of Health and Social Care reiterated that advice. Companies should therefore review their manufacturer and supplier relationships so that contracts can be renegotiated and capacity increased if necessary.
Employment matters
There is guidance addressing employment matters for EU citizens here, which states that there will be no change to the right to work of EU, EEA and Swiss citizens and their family members living in the UK until December 31, 2020, if the UK leaves the EU without a deal.
Next steps
As with every sector, businesses know that they must continue to follow governmental guidance on Brexit and prepare for every potential outcome until we have more clarity. Until then, businesses in the life sciences sector should also review their own contractual position and where necessary seek advice on the enforceability of contracts, or their ability to escape contracts, which may no longer be profitable or feasible.
Gustaf Duhs is partner, Catherine Penny managing associate, and Melissa Turner trainee solicitor at Stevens & Bolton LLP
