The right Brexit strategy: preparing medicinal products and medical devices for the EU27

Based on our experience as pharmaceutical consultants, we know that some pharmaceutical manufacturers from the UK are still hoping that the status quo, namely a free single market between the EU and the UK, will simply continue, even after the Brexit implementation period¹⁾ scheduled to end on 31 December 2020. By contrast, other companies are systematically preparing for a “hard Brexit” to occur already on 29 March 2019. In our experience, small and medium-sized pharmaceutical companies tend to favour hope, while the major manufacturers are more pessimistic in this regard. They have long since begun preparing for the worst-case business scenario. The actual outcome will likely fall somewhere in between these two extremes.

When does access to the EU single market end?

This is precisely where Brexit consulting from Diapharm comes in. We have developed an options matrix for manufacturers and distributors of medicinal products and medical devices which they can use to review and restructure their Brexit strategies. In the process, we join forces to come up with answers to the following questions, which we then assess in relation to the different Brexit scenarios:

• What impact is Brexit even going to have on the product portfolio (keyword: exposure)?
• What are the ways in which it is possible to reduce identified risks (keyword: mitigation)?
• What options are there to take action, and what kind of lead time is necessary for making preparations (keyword: action strategy)?
• How efficient are the possible action strategies (keyword: efficiency)?

Exposure – meaning the extent to which a manufacturer or distributor is affected by Brexit – varies greatly from company to company and from product to product. Apart from the question of whether and how a given product may be marketed in continental Europe, the raw materials supply chain and the type of marketing authorisation (medical products) or conformity assessment (medical devices) are also crucial factors to consider. Accordingly, the possible mitigation strategies differ depending on the company. Alongside many other issues, we examine:

• The possible continued application of existing marketing authorisations and declarations of conformity
• The registered office of the pharmaceutical company or authorised representative for the EU
• Import permit, quality management and quality control (e.g. EU retest)
• Legally prescribed functions, such as the QPPV/qualified person
• Wholesale and distribution system

Opportunities and risks of various action strategies

The individual analysis yields a set of possible action strategies. What is certain is that a company’s registered office and the office of the authorised representative must be located in the EU following Brexit for medicinal products and medical devices to remain marketable in the EU. For UK companies, it is clearly necessary to establish a subsidiary in one of the 27 EU member states on the continent. Companies that already have a subsidiary in continental Europe seem to have an advantage. But beware, as there are dangerous pitfalls lurking here too. For example:

• Does the EU27 subsidiary meet all of the requirements to operate as a pharmaceutical company?
• Does the subsidiary have the necessary permits (for imports, wholesaling, etc.), and have the required processes been defined and established for the period following Brexit (e.g. EU retest, batch releases)?
• Are the employees in the EU27 able or permitted to meet all legally prescribed tasks (QP, QPPV, authorised representative)?
• Do the MR/DCP medicinal product marketing authorisations held list the United Kingdom as the reference member state? (It will no longer be recognised following Brexit.)
• Was the conformity assessment completed by a notified body in the United Kingdom? (It may continue to be valid beyond Brexit, but it is not yet for certain. However, it will no longer be possible to do so with a notified body in the UK when it becomes necessary to seek re- or new certification under the MDR, at the latest.)

In light of such obstacles, some UK companies are considering selling or transferring marketing authorisations and entire brands to a company in the EU27. In that case, finding the right partner and the right timing are crucial. For many other companies, outsourcing their own corporate assets like that is completely unthinkable.

We can provide you with assistance in all imaginable scenarios – from looking for partners to protecting intellectual property with intelligent OEM/PLM solutions. Of course, our support also extends to preparing corporate structures in one or more EU27 member states for the period following Brexit. Contact us!

¹⁾ The British government has published a Guidance document detailing the planned cooperation during the implementation period: Technical information on what the implementation period means for the life science sector (06/08/2018). Except for some (albeit rather important) details, nothing is supposed to change for the British life science sector until 31 December 2020.