No-deal Brexit and the medical device industry: what to expect

Chloe Kent 24 September 2019 (Last Updated December 23rd, 2019 10:25)

The UK has been attempting to extricate itself from the EU since the 2016 referendum, and now there is a strong chance it will crash out on 31 October without a deal in place. What could this mean for the medical device industry, and what can businesses do to prepare?

No-deal Brexit and the medical device industry: what to expect
Europe isn’t a market UK manufacturers can afford to lose, and the sector is crying out for clarity. Credit: Shutterstock

It’s safe to say very few commentators, within or outside the medical device industry, are actively championing the prospect of a no-deal Brexit. The EU is the UK’s biggest trading partner for health technologies, with around £2bn worth of goods exported into Europe each year and £3.3bn in European medical products imported into the country.

Considering the sheer scale of the sector, talk of border delays, technical hold-ups and stockpiling bodybags hasn’t exactly painted a hopeful picture of the situation, and the overarching impact of no-deal on medical devices could be huge.

The UK has established a £25m contract to set up a 12-month express freight service to maintain the supply of medical devices and pharmaceuticals into the country in the event of no-deal. The British government hopes the contract will enable it to ship small parcels into the UK on a 24-hour basis and transit larger packages within four days. This could ensure these critical products reach patients even if customs checks and other logistical issues are caused by Brexit border delays.

Detail on how this extra freight capacity will practically operate has not been forthcoming, something noted by the Association of the British Pharmaceutical Industry (ABPI) chief executive Mike Thompson in a statement in August.

The UK Government has also promised an extra £434m to "help ensure continuity of vital medicines and medical products" but failed to explain how this money would be spent.

This is particularly concerning considering the content of the UK Government’s ‘Operation Yellowhammer’ document published earlier this month. The document highlighted the reliance of the healthcare industry on trade across the English Channel, which is likely to be subject to severe extended delays of up to six months or longer. This means that the £25m shipping contract would need to bypass the passage between Dover and Calais, and use a route like air travel to get medical products into the country.

Short- and long-term concerns

Gemma Bailey, director of UK-based medical equipment firm Bailey Instruments, says the main problem for the industry in the short-term would be border controls.

“We export a lot to Ireland, France and Germany, and if there are delays or complications at the border, or significant hold-ups over technicalities, it eats into our profits and restricts the amount we can export,” Bailey says. “If we can't export, we can't grow our business and keep our workforce profitably employed. This will be the same concern much of the industry has.”

And that’s just exporting. When it comes to importing goods to the UK, MHRA has advised European medtech businesses to designate a ‘UK Responsible Person’ to ensure medical devices remain on the market in the event of no-deal.

The UK Responsible Person, which can be an individual or group, would be tasked with acting on behalf of manufacturers in supplying devices to the British market after Brexit. The position would need to be filled by the end of the grace period for registering devices, which ranges between four and 12 months depending on the nature of the product.

An MHRA spokesperson says: “[How long this will take] will very much depend on the manufacturer’s internal processes for selecting and drawing up a mandate with a UK Responsible Person. Depending on the business, this could be done very quickly or take some time to organise. However, the requirement to have a UK Responsible Person in place aligns with the registration requirement and the associated grace periods.”

Longer-term, Bailey expresses concern for the common standards recognised across the international medical device sector and the risk posed by the pound’s decreasing value.

Bailey says: “One of the big pluses of our instruments is that they're high-quality and recognised as such across the world. If there's a gap between the standards we have to reach at home and the ones we have to hit abroad, it reduces the appeal of what we're selling.

“Another huge issue is the pound losing its value. Because exporting represents the main area of expansion for us that cuts into our margins and our profitability, which is a real worry.”

Industry demands

Going forward, the demands of the medtech industry are clear. A study carried out by trade group the Association of British HealthTech Industries (ABHI) at the end of 2017 found that the EU remained the number one priority for British health tech businesses. Nearly two years on, Europe isn’t a market UK manufacturers can afford to lose, and the sector is crying out for clarity.

“What we want more than anything, more than any exact terms or conditions, is certainty and stability,” says Bailey. “We want to be able to plan ahead, over a six- or 12-month cycle, and we can't do that if the Government is lurching from crisis to crisis.

“Beyond that, we want free movement of goods and low or no tariffs, so that our customers don't have to pay more than they should for our products. Comparability is really important too, so we can show customers why our products are the best.”

Still, the medtech industry isn’t losing hope just yet, despite strong opposition to no-deal Brexit from the life sciences sector in general.

Advanced Engineering marketing project manager Hetal Patel says: “The truth is, despite any upcoming changes to legislation, if the medical device manufacturing industry continues to promote innovation and invest in research and development then it can stay ahead of the curve. After all, the medical device manufacturing industry is one that has traditionally been proactive, rather than reactive, in finding ways to adapt to new scientific and technological advances, going above and beyond the basic requirements set out in law.”