Entrance view from the inside of the building.

Brexit chess game to be played out at Chequers

15 February 2018. Published by Peter Rudd-Clarke, Legal Director

The Prime Minister is engaged in a complicated multi-dimensional game of chess. She must reconcile factions within her own party over Brexit, before attempting to conclude a deal with the EU. The outcome will determine the future regulatory framework for Life Sciences in the UK.

Two meetings of the Brexit 'war' cabinet last week were supposed to conclude with the Government deciding what it wants from the EU. However, the meetings were inconclusive and it seems that a decision has been postponed until a meeting at the Prime Minister's country retreat, Chequers, later this month.

The UK's next moves on the Brexit chessboard could affect the Life Sciences industry in different ways:

Safe moves

Philip Hammond, the Chancellor of the Exchequer, is the personification of those who regret Brexit. Many in the Life Sciences industry share his view. Membership of the EU meant regulatory certainty, unfettered access to European markets, and prestige for the UK through the influence of the MHRA (the UK's regulator) and presence of the European Medicines Agency in London. Unless a second referendum reverses Brexit, the Chancellor and his supporters argue for as close a regulatory alignment with the EU as possible. UK manufacturers in the single market, or a version of the current customs union, would be subject to the existing regulatory framework concerning pharmaceuticals and medical devices. There would be no need for manufacturers to grapple with a competing set of UK regulations. This delivers certainty for industry and limits risk, as manufacturers operate within established rules. Over time, however, the regulatory regimes in the UK and EU could diverge on a piecemeal basis, perhaps in response to public concerns over the manner in which medical products are manufactured or sold, causing headaches for the industry.

Bold moves

Someone who is enjoying Brexit much more than Phillip Hammond is Michael Gove, Secretary of State for the Department for Environment, Food and Rural Affairs (Defra). Since his return to the Government last year, Mr Gove has used the department as a platform to argue that Brexit provides an opportunity for the UK to forge its own regulatory framework for industry, including Life Sciences. His stance was backed by Boris Johnson, the Foreign Secretary, in a speech yesterday. The UK could become more competitive as manufacturers take advantage of cuts in "red tape" to drive down costs and increase sales. For industry, a bonfire of the regulations might appear attractive but it would be pointless as British products would still need to be compliant with regulations where they are placed on the market. That said, at EU level, new regulations (such as the Medical Devices Regulation 2017) can take years to make their way through the various committees of the European Commission and European Parliament. By contrast, the UK could respond more nimbly to public concerns over medical products or new technologies. The UK could become the pace-setter at adopting better regulations and setting higher standards. UK manufacturers could go beyond compliance standards set by the EU, whilst also enjoying a competitive edge by selling products that are proven to be safer than competitor devices from Europe.

Backwards moves

There is a wing of the Conservative Party that takes a long term view, seeing the UK's membership of the EU as a mere historical blip. They are led by the back-bencher Jacob Rees-Mogg, dubbed "the honourable member for the 19th Century." At first glance, it appears that there would be very little to be gained if the clock were turned right back to an era before patient pressure groups, open access to information, data gathering, independent auditing and stringent standards. However, in previous eras medical practitioners and companies were able to innovate more quickly. Advances in medicine have tended to be characterised by one step back for every two steps forwards. It is in experimenting that advances are made, but some patients have suffered in the past and governments have rightly legislated to tighten the rules concerning clinical trials to make medical products safer. If the Government can find a way to boost innovation, whilst ensuring that products remain as safe as possible, then industry might welcome a dose of Victorian medicine.

Just make a move!

It remains to be determined whether Life Sciences manufacturers in the UK will be subject to the EU regulatory regime or newly minted UK rules on Brexit. Both approaches offer advantages and disadvantages. Either way, an industry clamouring for certainty hopes that the Chequers meeting spells an end to the current stalemate.