Britannia’s rules are vague: health care regulation after Brexit

Last month, as speeches and votes in Westminster began the process of Brexit, the Nuffield Trust held a round table event to discuss its impact on health and social care. The tone was one of apprehension. The end of free movement is a grim prospect for a sector chronically dependent on imported nurses and care workers. An uncertain economy means less wriggle room in the Treasury budget for the NHS. Most of the experts and leaders present broadly agreed with Professor Tamara Harvey that “there is nothing good for health about Brexit”.

Some saw glimpses of a silver lining in the chance to rewrite the EU laws that affect much of the health sector. For many NHS managers and commissioners, rules on procurement and competition create a nagging legal doubt over more collaborative models of organising care. While written into British law, these are backstopped by European regulation. Some in the medical world resent the European Working Time Directive, whose limitations they see as having undermined the intensity of work that was relied upon for decades to hone the skills of junior doctors.

In life sciences, some see leaving the single market as giving Britain scope to become a deregulated test bed for new technologies. Before the referendum Dominic Cummings, the idiosyncratic mastermind of the Vote Leave campaign, was asked why he felt the EU was a failing form of governance. His first example was the Clinical Trials Directive which binds Britain’s researchers: he argued that it slowed down research with bureaucracy at the expense of discoveries and lives.

So can we change these rules – and should we?

Ripping up the rulebook

In theory, a post-Brexit United Kingdom would be free to tear up the rules that force health care tenders above a certain value to go to the open market, and that prevent trusts and GPs from merging or collaborating in a way that undermines the market. Many would see reason to welcome this. It is currently very unclear how compatible these are with the changes the NHS in England is undertaking to shift care outside hospital – changes which often involve commissioners handing over major contracting decisions to providers, and hospitals and GPs expanding out into an ever wider range of services. As Sharon Lamb pointed out in an earlier blog for us, this situation creates a dual risk: either that NHS leaders give up on good ideas for fear of litigation, or that they go too far and leave crucial NHS structures open to legal challenge.

But as one attendee pointed out, Brexit means the ripping up of one rulebook but the writing of many more – in the form of trade agreements with the EU, America and many others. Our negotiating position already asks a lot of the remaining 27 states, demanding as much market access as possible along with restrictions on immigration. Why would they additionally agree to water down the access their companies now have to a major sector of our economy? Why would Donald Trump’s USA, home to the largest private healthcare sector in the world? The UK would be on particularly shaky ground because freedom of trade in services will have to be one of our highest priorities.

The Working Time Directive seems less likely to be cemented in place under future trade deals. But any attempt to change it will still hit a series of formidable practical obstacles. The Government’s current plan is for all existing EU legislation to be transferred into British law through a “Great Repeal Act”. It will then sit on the UK’s law books until it can be changed piece by piece via the accelerated route through parliament known as a “statutory instrument”. The resulting flood of work through an overstretched Whitehall, simultaneously trying to arrange an exit deal and multiple trade agreements, risks complete logjam. Jeremy Hunt recently told the Health Select Committee that two thirds of the staff in his downsized Department of Health would at some point be required to work directly on Brexit. Tying up loose ends and dealing with new situations alone will be a major new task: effectively British civil servants will take on a chunk of work once done in Brussels. More than one workshop attendee remembered the prosaic factor of civil servants struggling with a complex system as playing a major role in the clumsy way in which the Working Time Directive was implemented in the first place.

As Rafael Behr writes in the Guardian, there is also the strong possibility that MPs, peers and devolved countries will view this transfer of powers to ministers as an offence to their dignity – and stop it in its tracks. If so, any amendment to EU regulations will have to find time to take the long, legislative route through a swamped Parliament.

Betting the pharma

What about the regulations that govern the UK’s £57 billion life sciences industry? Can it look forward to a freer, faster-moving future when the shackles of EU regulation are removed? Jeremy Hunt has made it clear that Brexit will mean the UK leaving the European Medicines Agency (EMA), which currently applies one set of standards for medicines and devices across the Union. Leaving the EU in theory gives us the latitude to set looser limits on fields as diverse as animal testing, the use of private patient data, and genetic modification. You may think some or all of these are very undesirable, but some scientists and companies see real opportunities.

Yet it is fair to say that attendees from the pharmaceutical industry at our event – which was sponsored by MSD – saw more bad than good. Leaving the EMA would make the UK a smaller, separate market for medical technologies: a much lower priority than the vast EU for companies trying to get new and innovative treatments into widespread use. As one attendee pointed out, the NHS would be faced with a smaller market to buy from, meaning a smaller reservoir of critical medicines and less scope to bid companies down.

Jeremy Hunt suggested that we try to negotiate mutual recognition between the EMA and the UK’s Medicines and Healthcare Products Regulatory Authority (MHRA) after Brexit. But that would mean following the same rules, rules which the EMA is likely to have all the power in setting. One approach might be that the MHRA unilaterally approves technologies approved in Europe, whether or not the EMA does the same. Again, though, this would seem to encourage companies to focus on getting approval in Europe, and there might be some risk that this encourages research and development to be done on the continent.

How about the Clinical Trials Directive that sparked the ire of Leave campaigners? It is certainly true that it was widely disliked by researchers, often seen as undermining the attractiveness of the entire continent as compared to the USA. But the EU has only just finished a huge overhaul of the directive, set to come into effect in the next few years and seen as a major improvement. Again, the UK faces a dilemma. Do we go along with the Directive anyway, without any say in future changes, so that we can continue to host our share of trials that increasingly cross national boundaries? Or do we go our own way, and risk researchers deciding that having to deal with multiple regulators is not worth the benefit of operating in the UK?

Taking back control?

In theory, Brexit restores wide-ranging powers to regulate the British economy. But those powers look much less clear-cut in light of the reality of our situation. Trade deals and the logic of remaining part of a European market and research community exert a powerful influence to retain much of the infrastructure of the single market. The volume of work to be done by Parliament will mean even regulations with more domestic implications will have considerable inertia.

All this will have to be worked out at breakneck speed over the next two years, in a political system whose capacity to deal with such issues has atrophied since Britain joined the EU forty years ago. For our part, the Nuffield Trust plans to play a role in bringing the health care sector together to make sure dangers and opportunities are identified well in advance, and that the voice of the NHS doesn’t get lost in the mix.

This blog was informed by discussions during an event held at the Nuffield Trust on 26 January 2017. This meeting was organised, and associated material produced, by the Nuffield Trust in collaboration with MSD, and MSD provided funding.