What the Brexit Transition Period Means for Pharma
The “standstill” transition period begins as the Withdrawal Agreement clears the final hurdle.
Three-and-a-half years since the Brexit vote, the UK has left the EU – with a deal. There was no late drama as the European Parliament approved the Withdrawal Agreement by 621 votes to 49.
The UK now enters a “transition period.” Although the UK will have no MEPs, no Commissioner, and no seat at the EU Council; EU law will continue to apply in the UK. And that means companies can continue UK batch release testing and qualified person (QP) certification; marketing authorization (MA) holders and QPs, and QPPVs can continue to be based in the UK and access EU markets; manufacturing and distribution licences will continue to be recognized by the EU and vice versa, as will inspections; and UK-based firms can continue to apply for MAs via either the centralized or decentralized procedure (1).
The MHRA will not be able to participate as a “lead Member State” or vote on new MA applications within the EMA, but it “may attend EMA and EU committees and any groups where there is a UK interest, or where relevant to the EU,” according to the UK government’s advice (1). As of July 2019, the exact nature of this participation was still up for discussion (2).
The transition period will last until December 31, 2020, unless the UK-EU Joint Committee decides to extend the transition period by up to two years; however, the length of any extension must be signed off before July 1, 2020. Notably, the UK government has made a legislative commitment not to agree to any extension, which could only be reversed through new legislation (3).
Trade negotiations will soon begin, but with just 11 months until the end of the transition period, there is a risk of failure, whereby the UK and EU would effectively trade under WTO rules. The exception is Northern Ireland, which will be obliged to align with specific EU rules, such as technical regulation of goods, and the EU’s Union Customs Code – eliminating regulatory or customs checks between Northern Ireland and the Republic of Ireland. But this also means that although Northern Ireland will remain part of the UK’s customs territory, customs checks and controls will apply for goods moving from Great Britain to Northern Ireland (4).
“Northern Ireland could become a gateway to the EU single market, for example, by continuing batch release testing and QP certification,” says Wolfgang Schmitt, Administration Manager for the European QP Association (EQPA). “But there may be border checks on medicines moving from Great Britain to Northern Ireland. Plus, the UK will enforce EU rules in Northern Ireland, with EU officials observing and providing input.”
“Hopefully, there will be a Mutual Recognition Agreement for the QP release by the end of the transition period,” says Sascha Sonnenberg, Global Head Business Development at Sharp, a contract clinical, manufacturing, packaging and technology service provider.
“To avoid any issues, most companies operating in this area have already qualified or set up their own EU-based depots and established QP-to-QP agreements/declarations between a UK and EU based QP,” he says. “But some have decided to leave their material in the UK and only transfer to the EU depending on the agreement both parties put in place.”
Regardless of whether a deal is agreed by December 2020, it seems almost certain that the pharma industry will face a new trading environment. As Michelle Barnier, the EU’s chief negotiator, said in a recent speech, “The UK has chosen to create two regulatory spaces. This makes frictionless trade impossible. It makes checks indispensable (5).”
But Michael Warren from the BIA is hoping for close regulatory alignment with the EU. “The briefings we’ve had from government ministers over the past few weeks makes it clear that the government is still keen to hold to the position set out in the political declaration, which means exploring cooperation with the EMA,” he said (6). “I think the key point here is that, as the Chancellor said … where it’s in the UK’s interest to align, the UK will align and we’re very clear that it is very much in the UK’s interest to align – both for the safety of patients and in the interests of out world leading life science industry. So I think that does leave the door open for a side deal on prioritising life sciences as a protocol to a broader FTA.”
Batch Release in Transition
During the lead-up to Brexit – with a no-deal outcome on the cards – companies were advised to transfer their batch release sites listed in their MAs to the EU. In a recent statement, the European QP Association (EQPA) claimed that for such products, the role of the UK QP would be limited to “confirmation” – a signed statement by a QP that a process or test has been conducted in accordance with GMP (7) – during the transition period (8).
“If the MA was changed (via “variation”) to a new site in the EU, the UK QP will initially certify the products, but the final certification will be done by an EU-based QP,” says Schmitt. “Of course, if the MA lists a site in the UK for final batch certification, the certification by the UK QP would still be acceptable during the transition phase.”
This means, according to Elisabeth Lackner; an EU-based QP, CEO of ABF, and Global Head EVP of GBA Group Pharma; “a UK QP will be limited to ‘confirming’ batch release certification and not authorized to make the release decision alone. The UK QP release will not be equivalent to a QP release in the EU 27.”
"This is perfectly correct – it centers around the marketing authorization,” says Steve Girdlestone, UK-based QP and Head of Quality at Sharp Clinical Services. “The guidance based on a potential no-deal Brexit was that companies with a licenced product outside of the EU (i.e. the UK) needed to change and register that product so that it became a licensed product within the EU. This requires a formal release by a QP resident in Europe,” he says.
Girdlestone points out that many pharmaceutical companies, particularly the large ones, started that process and are now in a situation where their drugs are released by QPs resident in the EU. “Most have either opened offices or purchased facilities so that they can conduct their business from those sites,” he says. “For example, there's a company in Ireland that has a registered office there and they will take the certification of the UK QP and translate that into a batch release originating from Europe. Often, this will be a "re-certification" of the work already undertaken by the UK QP.” Girdlestone says that this is being challenged in certain quarters of the industry, however. “Some are saying this shouldn't be acceptable, even though it's supported by QP-to-QP agreements between sites.”
“But as far as the transition goes, we operate as if we were still part of the European Union,” says Girdlestone. “In fact, prior to the transition period coming into effect (while were still part of the EU) we were having issues with third party declarations issued by European QPs, with push-back from some regulatory bodies," says Girdlestone. "But since the UK entered into the transition period, one of the countries has changed their stance and we're no longer having issues with them."
Girdlestone points out that if the UK leaves the transition period without a deal, companies that have not yet transferred their MA and batch release site to the EU will need to do so. “But the reverse is also true,” he says. “If European-based companies want to market their products in the UK, they will need marketing authorization in the UK.”
UK Gov, “Technical information on what the implementation period means for the life science sector” (2018). Available at: https://bit.ly/2O6w99b.
C Niederlaender, “Continuity in uncertain times: MHRA Brexit provisions” (2019). Available at: https://bit.ly/38MTAw1
IfG, “Brexit transition period” (2020). Available at: https://bit.ly/36yrnYb
IfG, “Brexit deal: the Northern Ireland protocol” (2019). Available at: https://bit.ly/315n19Z.
M Barnier (2020). Available at: https://bit.ly/2S9dPgT
BIA, Brexit briefing webinar (2020). Available at: https://bit.ly/2UnX6Jm.
EU Commission, “Annex 16: Certification by a Qualified Person and Batch Release” (2015). Available at: https://bit.ly/36Z93aT
European QP Association, “Brexit: Consequences for Batch Release” (2020). Available at: https://bit.ly/2UDkNxm