Outside glass view of RPC building.

Life sciences and the Brexit trade agreement of Christmas Eve 2020

26 March 2021. Published by Peter Rudd-Clarke, Legal Director

As the nation prepared for muted Christmas celebrations at the end of last year, those in industry were able to feast on the Trade and Cooperation Agreement settled between the EU and UK on 24 December 2020 (the TCA). The TCA concluded months of uncertainty for the life sciences sector. Companies had been waiting to see how far the UK government would go in agreeing to follow EU standards concerning medicines and medical devices. By the time the EU and UK finally agreed the TCA, questions over life sciences regulations had rocketed up the agenda against a backdrop of vaccines and treatments developed to combat Covid-19.

Christmas lists 

For decades, UK industry and government had become accustomed to life sciences regulations originating from Europe. Businesses needed to comply with only one set of rules in order to sell products across the EU and EEA, including the UK. 

If the life sciences industry had asked for Christmas presents from the UK government, then near the top of the list would have been a plea for clarity over whether the UK would use Brexit to introduce a low-regulation regime to rival the highly regulated EU market.

If the UK used Brexit to diverge from EU regulations, manufacturers would need to grapple with different rules to sell products in the UK compared to the EU. In the years following the referendum in 2016, there were whisperings from government of plans to introduce a low regulation regime in the UK. Angela Merkel, the German chancellor, warned of the risk, to the EU, of the UK morphing into a "Singapore-on-Thames". As the EU and UK took it to the wire to negotiate a trade agreement, the life sciences industry wondered what Boris Johnson meant by "taking back control" and "sovereignty" being at the heart of Brexit. 

Christmas present for medicines manufacturers 

The TCA agreed on 24 December 2020 acknowledges that Brexit has created barriers to trade but contains provisions to streamline how trade between the EU and UK is conducted in certain products. Medicines, along with other products such as wine and chemicals, are catered for by specific Annexes to the TCA. 

The Annex relating to medicines makes statements of intent but is light on detail. There are provisions that relate to mutual recognition of Good Manufacturing Practice (GMP) and concern record keeping, documents and inspections. Businesses have welcomed this as it should avoid the cost of duplicating the need to evidence GMP compliance.

What is of more interest is what the UK has agreed to in terms of the future direction of travel for medicines regulation. 

Under Annex TBT-2, the parties have agreed to "facilitate the availability of medicines" between the EU and UK, including by "promoting regulatory approaches in line with the relevant international standards". Standards should be in line with practices and guidelines developed by international bodies, notably the World Health Organisation (WHO) and International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH). In addition, the parties have agreed to consult each other on proposals to introduce significant changes to technical regulations and to cooperate over developing and implementing internationally agreed standards. The TCA has created a Working Group to be made up of EU and UK representatives with the purpose of facilitating future cooperation. 

The effect of the UK signing up to these provisions in the TCA and Annex TBT-2 is that the UK does not intend to diverge from common standards with the EU that concern medicines. Both parties intend to cooperate so that future regulations will be aligned and drafted with international approaches in mind. 

This is not too much of a surprise. Even before Brexit, there was a trend towards countries' regulatory regimes converging. It makes sense for companies as well as patients. Business benefits where similar regulations are in force around the world. Development costs are reduced and more markets are available. For the public, medicines cost less, and post-production vigilance is made easier, where more patients are taking the same drug placed on the market in compliance with similar regulations.  

Cold turkey for medical devices 

The life sciences industry had grown used to a diet of EU legislation relating to anything from sticking plasters to knee implants but that has now come to an end. Whilst the TCA deals with medicines, it does nothing specific for trade in medical devices. Manufacturers must look elsewhere for clues about the likely future regulation of medical devices by the UK. This uncertainty is compounded by the fact that the UK and EU are shortly to be out of step when it comes to regulating medical devices.

Until now, the principal EU legislation concerning medical devices dated from the 1990s. Following high profile litigation concerning products such as breast implants and prosthetic hips, the EU created a new regime via the Medical Device Regulation 2017 (the MDR). The MDR is intended to learn lessons from the past and bring legislation into line with technical advances and changes in science over the last quarter century. The full application of the MDR was delayed due to the Covid-19 pandemic. There was an unforeseen consequence of this delay: because the MDR did not take full effect during the Brexit transition period, it is not part of the body of retained EU law that is automatically written into the UK statute book. But for accidents of timing, the UK would have adopted the latest EU law on medical devices. 

Will the UK remain out of step with the EU? Manufacturers can look to two sources for answers: the UK government's response to the report of the Independent Medicines and Medical Devices Safety Review (the Review) and statements by the UK regulator, the Medicines and Healthcare products Agency (MHRA).

The Review was set up to examine the healthcare system following concerns over pelvic mesh, sodium valproate and hormone pregnancy tests. Chaired by Baroness Cumberlege, it reported in July 2020 and concluded that all elements of the healthcare system share blame for failures. The Review highlighted the importance of stronger regulations to protect patients. It recommended that the UK develop standards that are "at least as stringent" as those set out in the MDR. 

On 11 February 2021, the Medicines and Medical Devices Act 2021 (the Act) came into law. The Act provides additional powers to the UK government to amend the law relating to medical devices. The UK government has referenced the Review and the MDR in explaining that the Act will be used to ensure that regulations applicable to medical devices can be updated. 

The MHRA has made statements that indicate it is likely the Act will be used to strengthen medical device regulations in keeping with the MDR. The MHRA sees this as part of its role in advocating for the UK's regulatory system to take into consideration international standards and global harmonisation of regulations designed to promote safety. 

Christmas bonus for the UK

The UK government's aim to attract investment in the life sciences sector was given a boost by the nation's contribution towards developing the AstraZeneca Covid-19 vaccine and by the MHRA being the first regulator to approve both the Pfizer and AstraZeneca vaccines in December 2020. Off the back of these developments, the UK government announced that pharmaceutical companies will be offered similarly fast-track approvals for innovative medicines, as the UK builds on the MHRA's role during the pandemic. It appears that such initiatives will complement, not detract, from the UK's commitments under the TCA to cooperate with the EU over international standards. In what would be a twist to the Brexit saga, industry will wait to see if an outcome of Covid-19 is that the MHRA positions itself with first-mover advantage, thereby playing an enhanced role in developing standards that the EU will adopt.

Christmases past and future

We all fervently hope that advances in Covid-19 vaccines and therapies will mean that Christmas Eve 2021 will be celebrated in very different circumstances to last year. Amidst the long hoped-for gatherings of family and friends, the anniversary of the EU and UK agreeing the TCA may be looked back on as a pivotal moment in the Brexit saga. It was the moment the UK government committed to a future where the UK remains in step with the EU over medicines regulation – whilst signalling that it will do the same for medical devices. Agreement was reached with the EU just as the UK was setting the agenda over Covid-19 vaccines. After years of uncertainty for the life sciences sector following the Brexit referendum, these developments will be worth raising a glass to. 

This article was first published in Healthcare Markets International