Brexit: the implications for pharmaceutical regulation

An overview of the possible implications for pharmaceutical regulation now that the UK has voted to leave the EU.

The Life Sciences sector is one of the most highly regulated industry sectors. A substantial proportion of that regulation originates with the EU, much in the form of Regulations. Although the UK has now voted to leave the EU, the vast majority of all these rules are uncontroversial and there will be no obstacle to the UK Government simply enacting those that form part of EU law verbatim into UK law. In many cases even this may not be necessary if the UK rejoins the European Economic Area via EFTA.

However, if the form that Brexit takes removes the UK from direct effect of EU legislation in this area, the UK Government will have to decide, in the longer term, whether to continue to align UK law with that of Europe, or to make its own decisions, which will lead to some divergence. Brexit in this form will add significantly to the administrative overhead for life sciences companies, since regulatory procedures (eg marketing authorisation applications, clinical trial authorisations, pharmacovigilance etc) which are currently undertaken in a harmonised EU environment will need to be duplicated in the UK. And this burden will increase if there is divergence between UK and EU law.

The necessary relocation of the European Medicines Agency, and the significant increase in the workload of the MHRA, are likely to lead to inconvenience and disruption in the short term. More significant will be the end of the UK’s membership of the European Centre for Disease Control and Prevention: although it is to be expected that the MHRA will be fully engaged with its activities, anyone with experience of large organisations will know that cooperation within a group or department is much easier to achieve than across departmental or group boundaries.

Areas where there is potential for significant debate over the extent to which the UK should simply adopt current EU law include “8+2+1” data exclusivity, the territorial scope of exhaustion of rights (that is, where parallel imports may come from) and the details of transparency and the publication of clinical trials.

The European Union is a major coordinator and funder of pharmaceutical research. Following the UK’s departure from the EU, UK companies will no longer be eligible to participate or to apply for funding. Multi-national companies will not be affected (save to the extent that they have to relocate research centres to qualifying countries), but UK medical research charities will be significantly affected.

The major impact on most ordinary members of the public will be that they will no longer be able to use the European Health Insurance Card to access free medical assistance when travelling in EU countries.

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Clinical trials, marketing authorisations and data exclusivity
  • If the UK becomes part of the European Economic Area  (EEA) (the “Norway” model), it will continue to participate in the EU centralised and decentralised procedures, and existing authorisations will continue to be valid.

    If the UK seeks to regulate its relationship with the EU by separate bilateral agreement, however, it is likely that, like Switzerland, it will not participate in the EU system. In this case, legislation to validate existing centralised authorisations (which are valid only in the EEA) will be required, and all future marketing authorisations will need to be the subject of separate free-standing applications to MHRA. This is likely to increase the workload of company regulatory departments.

    Although much pharmaceutical regulation is uncontroversial, 8+2+1 data exclusivity will be open for debate.

    Companies will need to revise their pharmacovigilance arrangements. The requirement that “an appropriately qualified person responsible for pharmacovigilance” should reside and operate in the EU means that a single person cannot perform this function for the EU and for the UK.

    For clinical trials, the requirement that sponsors outside the EEA must have a legal representative within the EEA is unlikely to be more than an administrative issue. Of greater concern is that the EU is moving to a more centralised system for authorising clinical trials, under the new Clinical Trials Regulation (536/2014) which comes into effect later this year. The extent to which the UK will still engage with this system is a matter for negotiation in the coming years, but the likelihood is that, following the UK’s departure from the EU, companies will have to make additional and separate filings if they want to do trials in UK.

    The whole area of policy with regard to transparency and the publication of clinical trials and their results is in a state of flux, and although the direction in which the political wind is blowing is clear, there is room for significant debate as to the details of how the UK should legislate in this area.

Public bodies
  • The European Medicines Agency (EMA) is based in London. Upon the UK’s departure from the EU, it will need to be relocated. Only if all its examining experts move to its new location will disruption be minimised.

    If the UK does not become part of the EEA, the MHRA will need to recruit and train additional staff to handle (as UK national applications) the applications which it will receive, which would have previously been handled by EMA. Some disruption is inevitable. The MHRA will also need to negotiate its own cooperation agreements with the other leading international regulators to replace those agreed by the EMA with the US, Canada and Japan.

    • The European Centre for Disease Control and Prevention is at the centre of a network of communication between EU and EEA member states to monitor, communicate and assist in response to a threat of communicable disease, forming an early warning and response system for the prevention and control of communicable diseases. Following Brexit, the UK will join Switzerland on the outside of this network. This could impact, for example, procurement of pandemic vaccines, where the EU’s greater purchasing power might push the UK down the queue.

Funding and coordination of research
  • Through programmes such as Horizon 2020 (H2020) and the Innovative Medicines Initiatives (IMI), the EU provides funding and coordinates research collaborations. UK-based companies without research facilities in other EU countries are likely to lose access these programmes following Brexit.

Parallel imports
  • If the UK becomes part of the EEA, then EU exhaustion of rights will continue to apply and parallel imports will continue to be possible as at present.

    If the UK leaves the EU and does not join the EEA, then EU exhaustion of rights rules will cease to apply. The Government will need to decide whether to replace them, and with what. Parallel imports of pharmaceuticals are controversial. There are fears on the one hand that they are can help counterfeit medicines enter the market. On the other hand, they provide a mechanism for the Department of Health to reduce what it pays to reimburse the cost of drugs. The extent to which the Government legislates for any form of exhaustion of rights outside the UK is likely to be the subject of intense debate.

Orphan drugs
  • At present, orphan drugs are defined by reference to the prevalence of the disease in the EU. This will presumably change following Brexit, although the impact is unlikely to be significant apart from the additional administrative burden.

Public health
  • The Cross-Border Healthcare Directive gives citizens of EU member states access to the state-provided healthcare in other member states, if they obtain a European Health Insurance Card (EHIC). Post-Brexit UK travellers to the EU will need to make their own insurance arrangements (as they currently should for travel to non-EU countries).

For further information on a Brexit, please refer to Brexit: the legal implications.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.