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Brexit: The Hard Reality of “No Deal” for the Medical Device Industry

Regulatory Updates | Medical Devices

EMERGO SUMMARY OF KEY POINTS:

  • All economic operators in Europe, the UK and in the rest of the world may face significant consequences of Brexit.
  • The distribution network of medical devices currently placed on the market by UK based importers must be reviewed.
  • EU distributors currently placing UK manufactured devices on the market may have a different role.
  • Unless a fitting deal has been made, all certificates issued by British Notified Bodies on EU regulations/directives will become void from 30 March 2019.
  • Notified Bodies are already anticipating this scenario.

Brexit: Notice to economic operators and medical device industry effects 2018A new notice from the European Commission lays out how Brexit will impact economic operators including medical device companies, Authorized Representatives and Notified Bodies.

EU Notice to stakeholders on Brexit

In January 2017 British Prime Minister Theresa May said, in connection with the Brexit negotiations, that “no deal is better than a bad deal.” As the Brexit negotiations have entered the future relations between EU and UK, these talks are now about exactly that deal. It appears the Brussels negotiators are testing the water regarding this “no deal” concept.

On 10 January 2018 the European Commission published a notice to stakeholders about the consequences of Brexit for economic operators including medical device industry participants. This notice explains that all economic operators (Manufacturers, Authorized Representatives, Importers and Distributors) may potentially be affected. Be aware that this notice is about the worst case scenario, where no mutual recognition agreement has been reached, which is unlikely.

Brexit and Authorized Representatives (AR)

A manufacturer placing devices on the European market can only do that if that firm is based in the EU, or by using an Authorized Representative (AR). If the UK leaves the EU, British manufacturers will need an EU-based AR, just like other non-European manufacturers. In other words, the UK will be a “third country.”

We can only speculate on what the UK requirements will be for non-UK based manufacturers and distributors placing devices on the UK market, and for UK-based manufacturers and distributors placing devices on the EU market. We will focus on the impact of Brexit regarding medical devices and IVDs, but the consequences of Brexit will impact all products covered by any EU regulation or directive listed in the annex of the aforementioned notice.

Brexit and Importers and distributors

As the importer is defined as an entity placing a device from a third country on the EU market, UK-based companies can no longer be used by other third countries as importers for the EU. For distributors this may result in unexpected consequences. If the distribution network is not changed, EU-based distributors placing devices on the European market from a manufacturer or importer based in the UK will themselves be considered importers. Even without full application of the Medical Devices Regulation (MDR), this change will already have consequences because the Product Liability Directive 85/374/EEC places liability with the importer.

Brexit and Manufacturers – AND certificates!

As indicated above, UK-based manufacturers will need an AR, just like any non-EU manufacturer. They will have to create a distribution network with an AR/importer.

However, all manufacturers worldwide, whether in Europe or elsewhere, can be affected by another issue: CE certificates for EU regulations can only be issued by Notified Bodies based within the EU. This also means that all certificates issued by UK-based Notified Bodies will become void after 29 March 2019. After that date, manufacturer can no longer place devices that need a valid CE certificate on the European market using a British Notified Body. The consequences can be compared to the de-designation or scope reduction of a Notified Body.

What are the potential effects?

UK self-isolation would be felt in all corners of the European Single Market. Distribution networks will be affected downstream from UK-based Economic Operators. This will be a problem for UK-based companies, but an opportunity for EU-based organizations. This will probably not have negative effects on the availability of devices for the European patient. Whether the same can be said for the smaller UK market is less certain.

A bigger effect involves the early expiration of certificates. If nothing is done, a large number of manufacturers relying on UK-based Notified Bodies will suddenly be orphaned. This is highly unlikely to happen. BSI, for an example, has already announced they have applied for designation as a Notified Body in The Netherlands. Other UK-based Notified Bodies may be undertaking similar scenarios.

Therefore it appears the effects on the medical devices industry in the European Union are limited, although certain measures must be taken. The real casualty is most likely British patients. They will face the prospect of manufacturers that cannot reach the UK market as easily as they do now. Any-UK based manufacturer may incur additional costs for placing devices on the European market, which will be reflected in their product prices. Let’s hope the British hardline Brexiteers will understand the potentially dire consequences of an interruption or severe reduction in the supply of medical technology in the UK if no deal is struck.

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