Global Regulatory Pulse

EU Commission Issues “Notice to Stakeholders: Withdrawal of the United Kingdom and EU Rules in the Field of Industrial Products”

In Consulting, European Market, Regulatory by Adrian Keene

On 10 January 2018, the EU Commission issued the document, “Notice to Stakeholders: Withdrawal of the United Kingdom and EU Rules in the Field of Industrial Products.” While this notice does not contain information previously unknown to the UK government and medical device sectors, it does emphasize the implications of the failure of the UK and EU to negotiate an appropriate agreement after the official Brexit date of 20 March 2019. Following this date, the UK will become a “third country” and no longer exist as a member of the EU.

The recent “Notice to Stakeholders” explains the outcome of a “hard Brexit” where no deal is achieved. It serves as a warning to manufacturers, including those in the medical device industry, to ensure that appropriate contingency plans are in place for such a scenario. However, this document should also be considered in the context of the negotiating position of the EU-27.

The likelihood of a “hard Brexit” outcome is uncertain given the UK’s negotiation position of “no deal is better than a bad deal,” and may seem unlikely for the following reasons:

  1. It is estimated that up to 40 percent of high-risk devices within the EU are CE-marked by UK Notified Bodies,* so a “cliff edge” disruption to medical device supply would damage the availability of devices to both the EU-27 and UK patients.
  2. Similarly, it is estimated that up to 60 percent of all devices originating from non-EU manufacturers are CE-marked by UK Notified Bodies. Therefore, there is a strong driver to maintain availability of these devices to EU-27 and UK patients.
  3. Even in the event of a “hard Brexit,” with the UK leaving the Single Market and Customs Union without compromise, it is expected that a transition period would allow for a more orderly transfer rather than a possible “cliff-edge.” Although some experts and EU countries have suggested a transition period of up to five years, the EU Commission Chief Negotiator, Michel Barnier, has proposed a deadline of 31 December 2020, creating a likely transition period of approximately two years.

*Note: Although a local office in mainland Europe may provide a manufacturer with their CE certificate, that certificate must be issued by a Notified Body legal entity. If a certificate displays a UK Notified Body number (i.e. Amtac 0473, BSi 0086, LRQA 0088, SGS 0120 or UL 0843) this “Notice to Stakeholders” very specifically pertains to your organization.

While negotiations are ongoing, there does remain a risk of the ‘worst case scenario’ being realized. It is recommended that all stakeholders evaluate risks related to supply chains, both for EU-27 and UK market access.

Below, NAMSA has provided recommendations for proper planning of EU-27 and UK market access activities to ensure preparedness.

Scenario/Market Access Access to EU-27 (After 30 March 2019) Access to UK (After 30 March 2019) Recommended Actions
Non-EU Manufacturer with UK Notified Body  X ? Monitor progress of Brexit negotiations including potential transition period to allow orderly adjustment of Economic Operators, and discuss contingency planning by UK notified body/consider transfer to EU-27 notified body. Continue transition to MDR.
Non-EU Manufacturer with EU-27 Notified Body  ? If your Authorised representative is also in the EU-27 no concerns for market access to EU-27, but monitor progress of Brexit negotiations to determine market access to UK. Continue transition to MDR.
UK Manufacturer with UK Notified Body X Expect access to UK to remain (although it is not clear under exactly what regulatory regime) and continue transition to MDR. However for EU-27 access monitor progress of Brexit negotiations including potential transition period to allow orderly adjustment of Economic Operators, and discuss contingency planning by UK notified body/consider transfer to EU-27 notified body.
UK Manufacturer with EU-27 NB ? Expect access to EU-27 to remain and continue transition to MDR. However for UK access monitor progress of Brexit negotiations including potential transition period to allow orderly adjustment of Economic Operators. Contingency plan gaining EU-27 Authorised Representative for EU-27 access.
EU Manufacturer with UK NB ? ? Monitor progress of Brexit negotiations including potential transition period to allow orderly adjustment of Economic Operators, and contingency planning by UK notified body/consider transfer to EU-27 notified body. Continue transition to MDR
EU Manufacturer with EU-27 NB ? Access to EU-27 to remain and continue transition to MDR. However for UK access monitor progress of Brexit negotiations including potential transition period to allow orderly adjustment of Economic Operators.
Non-EU Manufacturer with UK Authorized Representative ? Monitor progress of Brexit negotiations including potential transition period to allow orderly adjustment of Economic Operators, and contingency planning by UK Authorised Representative. Continue transition to MDR
Non-EU Manufacturer with EU-27 Authorized Representative X ? Expect access to EU-27 to remain and continue transition to MDR. However for UK access monitor progress of Brexit negotiations including potential transition period to allow orderly adjustment of Economic Operators.

One of the greatest concerns pertaining to a “hard Brexit” scenario is the loss of the ability for UK Notified Bodies to issue certifications, as after Brexit, UK Notified Bodies will be de-designated. This will potentially render all existing certificates invalid after 20 March 2019, so no further products may be placed on the market in the EU-27. However, all UK Notified Bodies have contingency plans to allow for transfer of certification from the UK to a mainland EU sister Notified Body.

In some cases, such as SGS 0120 and Amtac/Intertek 0473, these organizations have sister Notified Bodies in existence. Alternatively, others such as BSi, are applying for designation for a new Notified Body in mainland Europe. Even if sister Notified Bodies in mainland Europe have the appropriate designation scope and capability, the process of transfer is likely to be time-consuming and resource-intensive for all stakeholders; this includes changes to labelling and instructions for use as a result of a new CE mark number.

NAMSA, an industry leader in regulatory strategy consulting, is in current discussions with UK Notified Bodies to better understand the mechanics and critical timelines of the transfer of NAMSA clients to their sister Notified Bodies in mainland EU.

However, some manufacturers may not wish to utilize proposed mechanisms and prefer to move to another Notified Body outside of their existing relationship. It will be critical for UK Notified Bodies to create a seamless and least financially burdensome approach if they wish to ensure manufacturers maintain their commercial relationships with the larger organization. Agreeing to a revised contract and issuance of new certificates are unavoidable as part of moving to the sister notified body.

There is a similar uncertainty over the future of UK-based Authorized Representatives. Therefore, it is recommended that manufacturers engage with their existing EU Authorized Representative to ensure there are adequate plans in place for a “hard Brexit” scenario; the model of setting up an office within the EU-27, as per Notified Bodies, appears to be the most pragmatic solution. Manufacturers may wish to assess the readiness of their UK-based Authorised Representative for this scenario while also evaluating their EU Authorized Representative readiness for the Medical Device Regulation (MDR) or consider changing to an EU-27 Authorized Representative.

In the most likely scenario of UK becoming a “third country” independent of the EU, current EU distributors who previously supplied devices to mainland Europe (between the UK and EU mainland) will instantaneously be considered as Importers upon a “hard Brexit.” At this time, EU distributors must assume new regulatory responsibilities that are associated with this change in role.

One final point for consideration is that of the significant importance for both non-EU and EU-27 device manufacturers to have proper access to the UK market after Brexit. At this time, the regulatory model is unclear, but the likelihood of access being based on the MDR is high; therefore, manufacturers should continue their MDR transition plans with urgency given the deadline of MDR compliance of 26 May 2020.

How Will Recent EU Regulatory Changes Affect Your Organization?
NAMSA’s global regulatory experts welcome the opportunity to discuss strategic options related to the UK’s recent regulatory shifts. Our teams of EU professionals are available to assist with an in-depth assessment of potential business impacts to your manufacturing business and Notified Bodies/Authorized Representatives. Learn how a NAMSA-developed contingency plan for Brexit and the MDR can lead to organizational efficiencies and market success. Please contact us at: communications@namsa.com or +1-419-666-9455.

Authors:

Adrian is Director of Product Development Strategy at NAMSA, where he utilizes his broad experience of changing EU medical device regulatory requirements to support clients worldwide. He is responsible for new product development using EU regulatory requirements to provide a balanced interpretation of the needs and expectations of both competent authorities and manufacturers. He works with a broad range of devices including drug-device combination products. Adrian previously Head of Notified Body of SGS in the UK, and also served as the Global Clinical Affairs and Regulatory Manager for Medical Devices (SGS) with responsibility for conformity assessment activities of high-risk (Class III) devices under the Medical Devices Directive (MDD). In all, Adrian has 25 years’ experience in the medical device industry. He attended the School of Pharmacy at the University of London following and conducted postgraduate research in “Retinoid-Induced Skeletal Toxicity.” He also holds a diploma in “Managing Medical Product Innovation” from the Scandinavian International Management Institute.