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UK Life Sciences: Brexit Update on Drug Regulation in No Deal Scenario

25 June 2019

The UK Government's preferred Brexit arrangements for medicine regulation involves continued close cooperation with the EU including the desire to remain closely associated with the EMA.

Background

In the scenario of 'No Deal' on 31 October 2019 the UK Government has proposed unilateral recognition of existing EU processes to minimise disruption. It has also set up a Brexit Medicines Supply Contingency Planning Programme

In a 'No Deal' scenario, companies need to be aware that the UK will immediately self-regulate medicines. So for example a UK company with a pan-EU marketing authorisation (granted through the EU centralised procedure) will lose that EU authorisation. This is unless action is taken to transfer key operations and activities to an EU Member State. Other rights, such as the EU support for small and medium enterprises and the qualification as an orphan medicinal product may also be lost. Similar issues may arise in relation to clinical trials and medical devices (this note however does not deal with medical device regulation).

Given the fact that the UK will soon have a new Prime Minister, together with the UK’s past failure to make real progress, planning for the possibility of 'No Deal' is now a necessity for Life Science companies. This update provides general guidance for companies together with an action list to map out the way forward.

Preparation

Life Science Companies should map out:

  1. which and how many rights will be lost on 31 October 2019 if no action is taken;

  2. if they have entities in both the UK and the EU/EEA then which of these can take on the required responsibilities and activities (such as being the authorisation holder, batch release site or holder of the pharmacovigilance system master file); and

  3. what actions must be taken within what timeframe to prevent losing their rights (such as arranging the necessary variations and physical relocation of certain business activities).

Depending on the size of a Life Sciences business, the number of adjustments necessary to be fully prepared for Brexit may need a customised level of guidance.

This firm has created various advice packages (including both legal solutions and project management) from which you can choose. We offer to analyse what market authorisations you hold and if any amendments are necessary to maintain their status. We can help in the variation process with the EMA and the UK Medicines & Healthcare Products Regulatory Agency ('MHRA') which will become the primary regulator. Should you need to set up a new subsidiary in the non-UK EU/EEA, we can help guide you in picking the country that is most suitable from a corporate perspective.

Marketing Authorisations: General

  1. EU law requires that marketing authorisation holders, qualified persons for pharmacovigilance and sponsors for orphan medicinal products are established in the EU or EEA. It may be that for some companies this is not currently the case and so these must be created prior to Brexit in order to maintain the marketing authorisations. Assuming the UK will become a third country (non-EU/EEA) on 31 October 2019, the following activities, persons and registrations must be moved to a non-UK EU/EEA member state and be in place by such date:

    • the holder of a centrally authorised marketing authorisation;

    • the qualified person responsible for pharmacovigilance;

    • the Pharmacovigilance System Master File;

    • the sponsor of an orphan medicinal product; and

    • small and medium enterprises looking to keep their SME support.

  2. If a manufacturing site is currently located in the UK, an authorised importer and site of batch control must be created in the non-UK EU/EEA. In relation to clinical data obtained in the UK, bioequivalence studies which take place in the UK can only be used if the marketing authorisation is granted before 31 October 2019. Additionally, data obtained in the UK for traditional and well-established use applications can only be used if the data is obtained (or relates to) the period before 31 October 2019.

Authorisations: Specific

The following specific requirements will be needed:

  1. GMP: if the active substance is manufactured in the UK, a declaration from the UK competent authority is required stating that the standards used are equal to those in the EU/EEA;

  2. Resetting of ‘sunset clause’: if a pharmaceutical product is currently sold on the UK market only, the three year term within which the product must be placed on the non-UK EU/EEA market will start running again on 31 October 2019 from the date prior to 31 October 2019 on which the product was last put onto the UK market. If the product is not brought onto the EU/EEA market within three years thereafter, the authorisation will no longer be valid; and

  3. Orphan Drugs: a consequence of the UK leaving the EU/EEA is that applications after 31 October 2019 for orphan drugs can also no longer count UK users in calculating the prevalence of the disease.

Generally there will be a bigger burden on Life Sciences companies in the case of ‘No Deal’. The burden will increase because regulatory requirements, for example clinical trial authorisations, pharmacovigilance and good manufacturing, laboratory and clinical practices, will be under a separate UK legal and regulatory framework.

Clinical Trials, Medical Devices and IP rights

  1. Clinical Trials Regulation: the new Clinical Trials Regulation (EU No 536/2014) (‘CTR’) is due to come into force in the EU prior to 31 October 2019. This may result in a divide between clinical trials legislation in the UK and the EU despite the UK Government's intention to align where possible. Currently the UK Government have stated publically their aim to fully implement CTR when it comes into force, subject to appropriate national legislation being passed by Parliament.

  2. Protecting IP rights: in the draft withdrawal agreement, EU-wide IP rights (i.e. European Union trademarks (EUTMs), Registered Community designs (RCDs), unregistered community design rights (UCDs), database rights, and granted Community plant variety rights (CPVRs) will continue to cover the UK during the transition period and will become ‘a comparable registered and enforceable intellectual property right in the UK’ on 31 December 2020 ‘without any re-examination’.

In a ‘No Deal’ scenario, the latest guidance from the UK Government on IP matters maintains the same principle that existing rights will automatically become comparable rights. Also that it will be possible to file UK applications mirroring the pending EU applications also preserving the details and dates. Given the uncertainty, to be prepared on 31 October 2019 should a smooth Brexit not arise, it would be prudent to be filing new UK applications (at least for the most important EU rights) and for new applications, filing UK applications in parallel with EU applications.

Way forward

General

After agreed actions and timeline has been decided upon, we can help provide the best solutions to the particular problems a Life Sciences company is faced with. If the current marketing authorisation holder is situated in the UK (but there are multiple entities in the non-UK EU/EEA), we can help a business decide what entity would be best-suited to hold the marketing authorisation. Another possibility is that a Life Sciences company does not have any entities in the non-UK EU/EEA and must incorporate a new entity. This firm can help with the decision to move the business from the UK to the non-UK EU/EEA.

Changing the group structure for marketing medicinal products may also have important tax implications, which need to be taken into account in deciding on the proper structure and the position of the relevant entities within the group. This may also require new intra-group licence agreements.

In all of the above situations, and many more of the challenges you may face, we offer a customised approach. Therefore, we adapt our services to the size of your organisation and the likely nature of the issues you are faced with, for example, an administrative or actual relocation of part or all of your business. This means that we can offer assistance on specific legal issues, for example, on the relevant employee welfare and business aspects of the decisions you are faced with.

Filings with the EMA and the MHRA

The most important implication of Brexit with ‘No Deal’ is the requirement for companies to obtain appropriately timed approval for their variations and administrative amendments from the EMA and where necessary the UK MHRA. This includes obtaining approval for changing the market authorisation holder, changing the qualified person for pharmacovigilance and batch release site. It should be noted that the EU centralised market authorisation will be converted automatically to UK MAs in a ‘No Deal’ scenario. The UK government will allow those without a current UK established marketing authorisation until the end of 2020 to put these in place. However the MHRA may still require certain arrangements to be made in the meantime, for example, necessary access to relevant safety data

Our legal advice package option to clients offers assistance in obtaining the above approvals, keeps you up-to-date on the reference product of any relevant generic or hybrid marketing authorisation and helps you with the relevant filings.

Company Incorporations

Should you currently not have entities both in the UK and the non-UK EU/EEA, it is likely that you will have to incorporate new entities to fully maintain your rights in the UK and the EU after Brexit. We understand that a lot must be taken into account in deciding where, how and to what extent to incorporate and move part of your business to another country. However, we have compiled the schedule 'Drug Regulation Step Plan' to help you and have our Corporate and Life Sciences team ready to assist you with your business needs.

Schedule: Drug Regulation Step Plan

Timings : Action
1 Analyse your marketing authorisation portfolio and establish what rights may be lost on 31 October 2019.
2 If you do not have a relevant presence in the future non-UK EU/EEA (or in the UK) then decide where to incorporate. For example, where in the future non-UK EU/EEA will the batch release site be placed if manufacturing takes place in the UK.
3 Establish a new EU/EEA-entity for the purpose of transferring the required persons, activities and rights.
4 Use a future non-UK EU/EEA applicant to make requests for marketing authorisations and sponsors for orphan medicinal products if you have established a non-UK EU/EEA entity.

5

Transfer relevant rights, persons and activities to the new EU/EEA-entity (such as the qualified person responsible for pharmacovigilance).
6 On completion of a purchase, monies will be sent up the chain by Bank Telegraphic Transfer to ensure that the funds are received by the Seller’s solicitors the same day. The cost of the Transfer is £35.00 + VAT.

7

File your request with the UK MHRA to obtain a declaration that GMP standards and control of plant standards are equivalent to those in the EU/EEA;

8

Consider the establishment of a UK entity/put in place the UK legal presence requirements for UK marketing authorisations.

9

File UK applications for existing European Union Trade Marks (EUTMs), Registered Community Designs (RCDs) and Community Plant Variety rights (CPVRs) (at least for most important rights).

10

Complete or have completed the transfer of any centralised marketing authorisation and other relevant rights, entities and persons from the UK-entity to an EU or EEA-entity.

By Tim Matthews

For further information please contact one of the Team by calling 01483 543210 or alternatively email enquiries@barlowrobbins.com

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