In a recent study, the Association of British Healthcare Industries (ABHI) highlighted the importance of getting post-Brexit trading relationships right for UK patients, revealing that of the £5bn worth of health technologies used in the NHS in 2016, £3.2bn came from the EU.
But it’s not just UK patients that could suffer if the smooth trade of medical products between the UK and the EU doesn’t continue after Brexit. The UK also exports around £2bn of health technologies in the other direction and members of ABHI have identified the EU as a major target for growth in 2018.
Currently, medical products can move across a frictionless border between the UK and the EU many times in their lifecycle, for sourcing, assembly, packaging and sterilisation. Moreover, current regulations allow many healthcare technologies to be delivered ‘just in time’ in both directions. For example, 20% of products used in procedures where they are the main part of the procedure in the UK – such as a cardiac implant – are delivered the next day from the EU.
Yet although delays and disruptions to this process could pose a threat to the health of patients both in the UK and across Europe, neither the EU nor the UK Government has yet to come up with clear guidelines on how much Brexit will impact the healthcare and medical technology industries, or a plan detailing what they intend to do to make the transitional process as smooth as possible for both manufacturers and patients.
MedTech Europe calls for consistent pan European regulations
For trade association MedTech Europe, which represents diagnostics and medical device manufacturers operating in Europe, it is crucial to have consistent, pan European regulatory arrangements moving forward. Like many sectors, the association says, the medical technology industry thrives due to the European Single Market, where both EU and UK citizens benefit from access to innovative medical technologies.
The current EU wide system is being updated in stages, and the new Medical Devices and In Vitro Diagnostic Medical Devices Regulations will be applicable to EU members in full in May 2020 and May 2022, respectively.
While the UK will be subject to these updates until it leaves the EU in March 2019, the worst case scenario would be that, after that date, the UK’s Medical Devices and In Vitro Diagnostic Medical Devices Regulations become increasingly divergent from the CE marking system.
“We believe that any such divergence would be unhelpful, and that, whatever other arrangements may be in place, a transitional period to implement secondary legislation for medical devices and in vitro diagnostic medical devices, and maintain parity of regulation with the EU, is needed,” the association advises.
“A proposal to introduce a transitional period which lasts until 31 December 2020, as proposed in the Draft Withdrawal Agreement, is currently being discussed. We are monitoring the discussion and a confirmation of such a transition period will impact the industry’s action to cope with Brexit.”
For MedTech Europe, clarity and predictability will be crucial to the success of the transition period. “Legal uncertainty in any form would be detrimental. Both negotiating parties need therefore to work constructively and swiftly on delivering clarity regarding transitional agreements, including mutual recognition, trade and customs arrangements, with the aim to minimise disruption, costs and adverse patient impact,” the association says.
Avoiding delays and disruptions
For the ABHI, a key concern is that the UK may lose its attractiveness as a market in case of a regulatory divergence.
“The current system allows products to be introduced into Europe, and, indeed beyond, via the CE marking process, with the UK often enjoying first sight of many innovative HealthTech products,” the association’s Jonathan Evans says.
The ABHI’s ‘Healthy Outside the EU’ document recommends the government to continue (at least initially) to comply with the current CE marking system for medical devices and ensure the continued validity of products currently in the marketplace.
The document also advises the launch of a MedTech export campaign – a designated long-term, country-by-country strategy for UK MedTech companies, led by market specific MedTech champions – as well as calling for all products used in healthcare to be exempt from any new customs, tariff or VAT arrangements, and afforded pre-shipping clearance and fast track access across any new EU/UK borders.
MedTech Europe’s Brexit position paper also emphasises the importance of maintaining customs arrangements and regulatory controls that allow medical technologies to cross borders in a timely manner. Otherwise, time delays could increase the cost of supply to patients, in turn impacting patient safety, product price and the scope for companies to grow and employ more people.
“It is non-tariff barriers, such as those resulting from regulatory changes or extensive requirements at customs, that are likely to have a significantly higher impact on businesses and the markets they serve than macro-economic factors such as currency depreciation,” MedTech Europe says.
Post-Brexit opportunities for the UK’s MedTech sector
The Health Tech Alliance, a membership body of health technologies companies in the UK, has also published a report about the importance of close regulatory alignment post-Brexit, which calls for greater clarity on the preparations for Brexit and the UK Government’s vision for the life sciences sector post-Brexit, and mentions a couple of important opportunities for the sector.
Firstly, since a large proportion of companies which sell to the NHS are headquartered or based in the US, they believe there is an opportunity to boost the life sciences sector through a comprehensive free trade deal between the UK and US, which could enhance the UK’s position as an important base for US companies.
And secondly, withdrawal from the EU may also be an opportunity for the UK to strip away EU-based legislation and regulation, which may currently be inhibiting innovation and research.
“The UK Government must ensure it seizes this opportunity to remove red tape originating from the EU, that it and companies deem no longer necessary,” the report states. “This increased flexibility could act as a pull to attract world leading researchers to the UK and subsequently boost innovation.”
For MedTech Europe, it’s still hard to tell exactly what will happen post-Brexit. Its best advice is for medical technology companies to be ready for different Brexit scenarios. “Our sector produces products influencing the lives of people; therefore as industry we must remain vigilant and be prepared,” the association advises.