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Hard Brexit and its Effects on Medical Device Companies

EMERGO SUMMARY OF KEY POINTS:

  • European law will become British law, including for medical devices.
  • Both UK and European markets will likely require authorized representation.
  • UK negotiators should attempt to maintain access to Eudamed.

Brexit impact on medical device companiesIn 2016, we discussed the possible options for what a Brexit could look like and what the British prime minister meant with “Brexit means Brexit.” The official date of announcing formally that the United Kingdom wants to leave the European Union is fast approaching.

On 17 January 2017 Theresa May delivered a speech in which she clarified the UK’s stance toward European legislation: At the moment the UK leaves the EU, European law will turn into British law. This will provide continuity, and it also implies that the Medical Devices Regulations (MDR) and the IVD Regulations (IVDR) will be fully adopted in Great Britain.

May said that the UK will leave the European Union without keeping bits of the EU membership. The most important quote about how she sees British access to the single market is, “We do not seek membership of the single market but the greatest possible access to it.”

Of course this should be seen as part of the upcoming negotiations. May has set goalposts to mark a position. And it will now be clear to European Union negotiators that there will be no “partial membership” of the EU, no “bits of the Single Market” left.

The prime minister added that “no deal is better than a bad deal.” That is of course also part of the negotiation strategy because it means that the UK will not accept any deal. But it is a position to keep in mind because it could have serious consequences for the movement of medical devices between the EU and the UK.

What deal could the UK be looking for, and what would that mean for medical device firms?

It is clear the UK wants British industry having good trading relationships on the European Single Market without being part of the Single Market. In reality this will look less like a contradiction than it may appear on first sight.

Medical device and other industry observers have cited the example of the European Free Trade Association (EFTA), whose members include Norway, Iceland, Switzerland and Liechtenstein, as an avenue whereby the UK could maintain commercial and regulatory ties to the EU. But the British government appears to be angling for a much harder break from Europe than that of the EFTA member countries.

Still, many countries in the world who are not member of the European Union are trading on equal terms with the EU. Besides, in 2016 the EU sold 24 billion British Pounds more to the UK than the amount of trade going the other way. Therefore the EU has something to lose in its trade relation with the UK.

May is likely correct in expecting that the EU will allow for a relatively mild deal regarding trade. For medical devices, this will probably lead to a compromise where CE Marked products can get relatively easy access to the UK market and vice versa. However, European law will not be applicable in the UK, and British market surveillance activities will not be coordinated from Brussels.

This will have some consequences. Most likely some kind of Authorized Representation will be necessary for both markets, and for non-EU manufacturers an EU-based Authorized Representative will be required. Notified Bodies based in the UK will have to switch their head office to the European mainland. It appears these consequences are more of a formal hassle than a problem reducing trade.

Looks like a good deal, but…

On first sight this looks like a good deal for Britain, but there are at least two downsides.

First, there is a need for some kind of market acceptance arrangement for devices in both the UK and Europe. Where European Member States can work together and share efforts in market surveillance, the UK must somehow do all that on its own. With a majority of medical devices being imported into the UK, that is going to require a substantial investment in time and brains, while at the same time the MDR and IVDR will have to be implemented. Getting this process running smoothly will be essential to guarantee continuity of supply to British hospitals, while at the same time the possibility of tougher immigration rules will make it harder for the MHRA to attract qualified European workers to fill their ranks.

A second problem, closely connected to the first, involves access to Eudamed. Non-European countries do not have access to Eudamed unless they can establish special arrangements. Only very few people fully understand the value of the new Eudamed, so access to the database may be overlooked in the negotiations. Prime Minister May indicated that the UK will make no contributions to the EU, although some specific programs may be sponsored by the UK.

The new Eudamed should qualify as one such program warranting investment by the UK. Should this be overlooked, not having access to Eudamed could in the end result in many devices no longer being available for British patients. I doubt that scenario is what UK citizens thought they were voting for.

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