How will Brexit affect Europe’s medical device manufacturing supply chain?

The United Kingdom’s vote on June 23 to leave the European Union, the so-called Brexit, has unleashed massive social and economic uncertainty that will not be resolved any time soon. In particular, the referendum’s outcome has raised a host of serious questions for companies involved in the medical device manufacturing supply chain, writes Erik Vollebregt, a founding partner of life sciences law firm Axon (Amsterdam), on his medicaldeviceslegal website. Firms are asking him “what this means for CE marks for medical devices and for the process of the [new medical device and in vitro diagnostics regulations] as well as medical device law and policy in the EU, in general.”

t’s hard to imagine that the Brexit will have any impact on the new medical device and in vitro diagnostics regulations, which are expected to be adopted by the European Council and Parliament this year following a multi-year process. “The EU will certainly not suspend the project because of the Brexit because the texts were established following the normal legislative procedure. The texts will enter into force in the EU as planned and may also take effect even in the UK, up until the date on when the UK formally disengages from EU law,” writes Vollebregt. 

In order to do that, the United Kingdom must trigger Article 50 of the Lisbon Treaty, which formally starts the process of withdrawal from the European Union. Until Article 50 is invoked, nothing changes, and it appears that the UK government is in no hurry to begin the process. Even when it does pull the trigger on Article 50, the law calls for a two-year process, and the adoption of the new medical device and IVD regulations will be well underway at that point. 

The larger question is what relationship the United Kingdom will have with the European Union once it has pulled out. One possible outcome is the signing of a mutual recognition agreement along the lines of the treaty that Switzerland has with the EU. “That agreement allows Switzerland to have notified bodies and provides for mutual recognition of the CE mark,” notes Vollebregt. The medical device industry considers an MRA between the United Kingdom and the European Union, which would uphold the free movement of CE marked goods and recognize UK-based notified bodies and authorized representatives, the best option under the circumstances. Alternatives, outlined by Ronald Boumans, Senior Regulatory Consultant, on Emergo’s website include a trade agreement comparable to the one between the European Union and the United States or a general agreement under World Trade Organization guidelines. These would be fairly disruptive and “place British industry outside Europe,” notes Boumans.

Companies exporting products to EU countries that rely on authorized representatives for legal representation have particular cause for concern. “The future of UK-based authorized representatives is up in the air,” writes April White from the law firm Knobbe Martens Olson & Bear LLP on the Medical Device Blog . “But Sinead Keogh, Director of the Irish Medical Devices Association, sees the possibility that UK-based authorized representatives may not be eligible to represent manufacturers within the EU, forcing companies to establish legal representation within another EU state.”

For the time being, though, only “one thing is certain,” adds Boumans. “Until the final breakup, British legislation remains fully aligned with European rules and CE marked products can move freely across the Channel.” 

After that, all bets are off.

As Vollebregt notes in his blog post, if the deal the UK strikes with the EU is bad, some of the trade barriers of the past may be resurrected. If it’s good, “the UK may become a sort of Switzerland for the purposes of medical device law.” 

The bottom line, though, is no one really knows where this will end up. And that uncertainty is causing a lot of headaches, not just in the medical manufacturing supply chain, but throughout the global manufacturing, business and financial communities.



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