UK: Deal Or No Deal – Government Opens The (First) Box

Last Updated: 10 October 2018
Article by Edward Turtle and Sarah-Jane Dobson

In the first in a series, we examine the Government's plans for products in the event of a "No Deal" Brexit.

The UK Government has been publishing technical notices, setting out its plans in the event that the UK and the EU fail to reach agreement before March 2019. Following publication of the last batch at the end of September, we take a look at what has been announced so far, from the standpoint of product manufacturers who need to make informed contingency preparations. This is the first in the series; stay tuned for further instalments.

It is evident from the first batch of technical notices that a "no deal" scenario will not be plain sailing for businesses. Additional hurdles for food producers, changes to packaging and changes to processes for sale of medicines all suggest that, despite the Government's commitment to minimise disruption, there could be choppy waters ahead. Businesses will sometimes be required to take action immediately post-Brexit, whilst other changes will be able to be made more incrementally during a transition period.

Medicines and Medical Devices

As human health and safety are at the core of the medicines and medical devices sector, the Government has made clear its concern that regulation of these sectors is seamless post-Brexit.

Yet, even here it seems some change is inevitable. The biggest and most immediate changes are increased administrative burdens for manufacturers wishing to trade in the UK post-Brexit, with requirements to engage in a separate authorisiation process and for a mandatory regulatory presence (responsible person) in the UK. Products currently in the UK market, based on EU-approval, will remain unaffected, at least for the time being.

Areas which remain unchanged

The standard of safety required would be unaffected by a no deal scenario, either because UK legislation will continue to apply (organs, tissues and cells and blood and blood products), or because the Government suggests it will adopt EU safety standards, at least temporarily, post-Brexit (medicines, medical devices and clinical trials).

EU-certified products, including medical devices, blood and blood products and organs, tissues and cells would continue to be accepted, at least in the short term, in the UK. Similarly, EU-based batch testing could continue to be used for products manufactured in the EU and sold in the UK (with UK-based batch testing continuing to be required where products were manufactured in the UK).

Areas of change

UK-based notified bodies will no longer be able to assess conformity for compliance with EU requirements. Interestingly, there is no comment regarding the recognition of EU-based notified bodies by the UK.

Applications in respect of medicines, medical devices and clinical trials will now be submitted to MHRA in respect of UK-marketed products; necessitating multiple applications for products marketed in both the UK and EU market. MHRA will accept EU application forms, and adopt the same procedure for submission in most respects, but partially processed applications at the time of exit will need to be re-submitted separately to the UK, which will no longer be bound by decisions of the EU bodies.

QP, QPP and contact persons under these regimes will need to be UK-based, for QPP at the time of exit (unless the company has no UK presence, in which case they have until 2020) and change forms to indicate any changes will need to be submitted to the MHRA.

Whilst importation of EU blood, blood products, organs, tissues and cells will be secured unilaterally by the UK at the time of exit (with some additional administrative burden on importers), arrangements for exportation will not be, and those intending to export will be required to comply with the EU requirements.

The legal regimes attached to medicines, medical devices and clinical trials are the most affected by the Government's no-deal Brexit plans. The recent EU-level legislative changes in respect of medical devices and clinical trials, which will not be implemented in time for Brexit, necessitate the UK's, at least temporary, adoption of EU law to ensure continuity of regulation of these safety-critical areas (with amendments to reflect the change of the relevant authority to the UK's MHRA).

The technical notices make it clear that deviation from EU law will be permissible in respect of all of these regimes from the time of exit.

Future technical notes will be produced in respect of biological medicines, IT systems requirements and manufacturing and import licensing. We will provide updates when these are published. In addition, relevant EU bodies will be producing guidance on how they will handle UK-certified or manufactured products. We will provide updates in this regard as they become available also.

Product Labelling

The Government has published information that will affect businesses in the food, GMO and tobacco sectors. For other industries, contingency plans remain unclear so far.

Food producers should look carefully at plans for organic food products. European Organic Food Regulations (834/2007, 889/2008 and 1235/2008) would be transposed onto the UK statute book substantively intact and certification and traceability provisions would remain. However, EU organic packaging logos would have to change, with a grace period to use up existing stock. A new UK traceability system would replace EU TRACES NT. UK businesses would only be able to export to the EU if certified by a control body recognised by the European Commission. The Government is attempting to agree equivalency provisions in the interim.

Current EU requirements for GMOs would be maintained substantially intact, with the UK still making decisions on trials, but regulatory control of marketing would shift into its control. Businesses would only be able to import GMOs to the UK with UK approval, and export to the EU with EU approval.

Tobacco manufacturers should consider how they would prepare for new picture warnings and deal with existing stock if the UK exits the EU without agreement (the European Commission owns the copyright to the current library of graphic health warnings). Otherwise, it is business as usual with the UK signaling it would retain current legislation implementing the EU provisions.

Conclusion

The first batch of no deal plans are light on detail. With current uncertainties likely to persist for at least another few months, companies will have little time to adjust if the UK and the EU fail to reach agreement before March 2019.

That said, what has been published already highlights key points for product manufacturers.

  • The need for contingency plans. The UK Government claims that roughly 80% of the EU Withdrawal Agreement is now agreed and is at pains to point out that it considers the no deal scenario unlikely. The Secretary of State set out his justification for contingency planning: "Let me be clear about this. This is not what we want. And it's not what we expect. But, we must be ready. We have a duty as a responsible government to plan for every eventuality."

    Manufacturers must also be ready; they cannot afford to bank on a deal and should be preparing thorough business continuity plans now.
  • Targeting areas of change. The Government is clearly prioritising consistency to ensure as smooth a transition as possible. Businesses should be reviewing the technical notices and targeting areas of change in their contingency planning.
  • Watching the EU response. If the Government does not reach agreement with the EU in important areas, it has signaled that it is willing to go it alone and adopt unilateral harmonising measures – such as those in respect of batch testing of medicines. This appears to be premised on the assumption that the EU will follow suit, but there are certainly no guarantees on that front. It is important that businesses monitor EU as well as UK preparations to be best-placed to react to a no deal scenario. The European Commission's recent preparations guidance stresses that "although the withdrawal of the United Kingdom may appear to be playing out at a high and rather abstract level between the United Kingdom and the European Union, its consequences will be very real for citizens, professionals and business operators."

The full list of technical notices published so far is available here. We will continue to blog on No Deal plans as they are published.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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