Brexit Outcomes Come into Focus at International Standards Conference
Posted April 29, 2019
The United Kingdom (U.K.) pulled back from the “cliff edge” when it averted the predicted turmoil of a March 29 no-deal Brexit. Although the new Oct. 31 deadline has provided some breathing room for medical device manufacturers with business in the European Union (E.U.) and the U.K., it has also prolonged the communal sense of dread that permeates the issue.
Even though uncertainly still abounds for the final outcome of the U.K.’s exit from the E.U., the likely conclusion is also coming more into focus, as described by presenters during the International Conference on Medical Device Standards and Regulations on April 24–25.
“We are in a better position than perhaps six or eight weeks ago,” said Gary Slack, senior vice president of global medical devices at BSI, which co-hosted the conference with AAMI and the Food and Drug Administration. “From a practical perspective, I think it’s highly likely now, given where we are, that the U.K. will end up in a ‘customs union plus’ outcome from Brexit,” with the country leaving the E.U. at the end of 2020.
A ‘Customs Union Plus’ Outcome
A no-deal or “unnegotiated Brexit” is highly unlikely at this point, according to Slack. He described a future scenario aligned with a March 2018 draft withdrawal agreement that would create a transition period during which time E.U. laws and regulations would remain in effect even though the country would have formally left the union. During the transition, U.K.-based notified bodies will continue to issue CE marks that are recognized in both the U.K. and E.U., and manufacturers will continue to submit information to the Medicines and Healthcare products Regulatory Agency using existing submission routes.
“That will eventually be replaced by the U.K. system. My understanding is that this system will wholly enshrine the European Medical Device Regulation (MDR),” Slack said.
Although the increasing likelihood of a “soft” Brexit has calmed some of the initial panic triggered by the March 29 deadline, it still poses challenges, as a customs union would not cover all goods and services.
Such a result also would be challenging because it does not give voters the E.U. exit that they voted for in the 2016 Brexit referendum. The customs union arrangement would mean that the U.K. would “basically” stay in the E.U. and be tied to its treaties without having input into those rules, said Joseph Gatewood, vice president of global strategy and analysis at the medical device trade association AdvaMed.
“You can’t make free trade agreements in a custom’s union. That’s off the table because they won’t have the authority,” Gatewood said. “Some of the flexibility that people think will be there won’t be there.”
Heightening MDR Implementation Challenges
Gatewood offered a “less optimistic” view of the potential Brexit outcomes. Beyond the issues inherent in establishing a new regulatory system for the U.K., Brexit in any form is likely to intensify existing challenges inherent to the re-designation of notified bodies under the MDR, he said.
The date of application for the MDR is scheduled for May 27, 2020, which will fall either during continued Brexit turmoil or a post-Brexit transition period. At the same time, the U.K. is currently the E.U.’s leader in providing CE markings, 30–40% overall, and up to 80% in some industries, Gatewood said. That poses an issue, as the E.U. system will be transitioning to the MDR at the same time the U.K.—and its notified bodies—are transitioning out.
According to Gatewood, Brexit could decrease the certification capacity of the system by 30–40%. That puts the E.U. in danger of having far too few notified bodies or trained professionals to keep up, especially with the demands of MDR implementation. So far, only one notified body, the U.K.-based BSI, has been designated under the MDR. BSI migrated the vast majority of its clients to a Netherlands-based office that opened in November in anticipation of the original Brexit date of March 29. However, BSI Netherlands is still awaiting its MDR designation, as are all of the other E.U. notified bodies that have applied.
“Brexit exacerbates all of these problems … If you have a disruption from Brexit, that takes more capacity out of a system that already doesn’t have capacity,” said Gatewood, who estimated that 15 notified bodies will be ready to begin issuing CE marks under the MDR by the fall, and possibly 20 by the end of 2019. “The EU has not moved at the pace and scale that was envisioned by the regulation to certify the notified bodies … I don’t see a way that this gets done.”