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Paul Ranson, Morgan Lewis' London Life Science’s Practice.
Paul Ranson examines how the UK biopharma must now adapt to a changing landscape.
It may come as no surprise that a pre-referendum ‘Brexit” poll conducted by the UK Pharmaceutical Directors Club of senior management within the UK pharmaceutical industry resulted in a vast majority in favour of “Remain” with local management and head offices concerned about the possibility of the UK exiting the European Union (EU) and negative implications for their businesses.
Planning for regulation post-referendum
The EMA and other EU medicinal product organizational and licensing arrangements are restricted to EU and EEA members, so the UK, if outside the EEA, will be excluded.
Indeed, the EMA will, in these circumstances, be expected to move its headquarters out of the UK and relocate in one of the remaining EU countries. Nor will rapporteurs from the UK be accepted.
However, as part of the forthcoming negotiations, it would seem sensible for the UK to agree a Mutual Recognition Agreement - such agreements already exist between the EU and Switzerland, Canada and Australia.
The EMA will certainly regret the loss of the UK competent authority, the Medicines and Healthcare Products Regulatory Agency in so far as it is one of the most respected member state competent authorities and the most used rapporteur under the centralized system and reference member state under the mutual recognition and decentralised systems.
A particular irony is that the new Clinical Trials Regulation which introduces the possibility of a single approval for a pan-EU clinical trial which has been sought after for many years and may now come too late for the UK to benefit. The Regulation will probably come into force in October 2018.
For medical devices, a question arises whether they should retain an authorized representative or manufacturer in the UK? Similarly, should manufacturers continue to use a UK notified body? However, joining the EEA or entering into a mutual recognition agreement under EFTA, could mean that UK-originating devices would still benefit from access to the EU market.
The likelihood of an extended negotiation period means there may be little material change for at least two years and probably substantially longer. However, before any action is considered, it would be appropriate to identify all applied for or granted marketing authorisations, clinical trial approvals or legal representative status, orphan designations and supply chain licences held by UK affiliates as well as any key regulatory functions performed by them including qualified or responsible persons and siting of databases. For medical devices, one would similarly identify those products for which a UK company is either the manufacturer (CE-marking holder) or the authorised representative and where the selected notified body is based in the UK.
If the UK goes the EEA route, little will need to change, even after Brexit, as all EU rules will apply within the UK wholesale with UK companies able to apply for and hold the requisite approvals and licences. An exception is that MA approvals under the centralised route would need to be nationally implemented as they would not apply automatically in the UK.
Were the UK to go the Swiss route or WTO, much of UK life sciences law is derived from EU law either through Directives implemented nationally in the UK or through EU Regulations which have direct effect. Accordingly, transitional measures could well be brought in to ensure that both the UK implementing laws and the EU Regulations would remain in force until amended or revoked. However, the MHRA would have to transfer marketing authorisation applications for which they are either rapporteur or the reference member state to other member state regulatory authorities.
With goodwill on both sides, an easy solution might be a series of mutual recognition agreements in relation to both medicinal products and medical devices – as UK governance in both sectors is widely respected throughout Europe there is little reason (other than possibly political mischief making) why this would not be achievable. This would be particularly important for the supply chain to ensure importers and manufacturers would be able to release product for EU supply – and vice versa. By way of precedent, Switzerland has an agreement with the EU mutually recognizing GMP licences to facilitate this. It also has a similar agreement leading to mutual recognition of CE-marking for medical devices. Similarly, UK notified bodies can point to existing mechanisms in place for non-EU countries including mutual recognition agreements involving the US, Canada, Australia, Switzerland and Japan.
Whatever way negotiations go, there is an argument for the industry not taking precipitous action as, at worst, any regulatory approvals, licences or functions could be transferred to an affiliate within the EU prior to the effective date of the UK actually leaving the EU. [Ian Hudson, Chief Executive of the MHRA, stresses that the Agency is “open for business as usual in terms of its routine regulatory work whilst the Agency works with the UK Government, industry and other EU and international regulators to consider and take forward the results of the UK referendum. This continuity is also recognised and endorsed by its EU partners and EMA leadership.”]
As an acknowledged ‘jewel in the crown’ of the UK economy, the new Government will be anxious to mitigate the impact on the UK life sciences sector and will be open to ideas as how to exploit UK industry and research base strengths in a post-EU world. The life sciences industry therefore has a real opportunity to gain a greater share of voice through a concerted lobbying camping to achieve its aims.
Paul Ranson is a consultant with Morgan Lewis' London Life Science’s Practice.