Deconstructing the deal: what the Brexit agreement with the EU means for the NHS

As Brexit continues to dominate the news, Mark Dayan gives his expert view on what the UK's withdrawal agreement with the European Union could mean for the health service.

Blog post

Published: 04/12/2018

Descriptions of what the Brexit withdrawal agreement and political declaration mean often sound more like philosophical paradoxes than legal analysis. The documents negotiated with the EU lay out at least three possible futures for the UK – one that is temporary, one that is never meant to happen, and one that may be impossible. But looking at each of these in turn, we can deduce some concrete facts about the likely impact on the NHS, social care and life sciences.

Delayed transfer

The main section of the withdrawal agreement ties up loose ends in our relationship with the EU, and creates a transition period where the UK will remain fully aligned to the EU’s laws.  

The transition period, which could last for anything up to nearly four years, takes us well back from the cliff edge of a no deal Brexit with the price rises and shortages that would risk. The price is the UK becoming a ‘rule taker’ during this period – losing its role in making EU laws on medicines and science, and losing its place in committees and agencies.

Part Two of the agreement permanently secures the rights of UK citizens in the EU and EU citizens in the UK. This may help persuade the over 165,000 NHS and social care workers who are from the European Economic Area to stay.

Articles 30 and 31 secure access to reciprocal health care schemes, like the European Health Insurance Card (EHIC) and the S1 scheme that allows expat pensioners to access care. But this only applies to people who have already crossed the border when transition ends. The nearly 200,000 UK pensioners using S1 in Europe could keep using health care on the same basis as locals. But those of us in the UK would no longer be able to access these schemes the day after transition ends.

Probing the protocol

A special protocol in the withdrawal agreement lays out a ‘backstop’ future relationship where Northern Ireland would stay in some areas of the single market, and the whole UK would enter a basic customs union with the EU. This would kick in if a future relationship could not be secured that prevents a hard border in Ireland.

The backstop alone would not keep England, Wales or Scotland in the EU regulatory system and agencies for medicines, medical devices, or science and research. Countries outside the two major medicines markets of the EU and USA typically receive new drugs later. In Canada, according to the consultancy Charles River Associates, the delay averages 144 days.

The customs union included in the backstop would reduce the restrictions and red tape importers and exporters would face under a no deal scenario. But exactly how much additional paperwork would be required is something even customs experts find it difficult to work out. Modelling of a scenario like this by the UK in a Changing Europe assumes barriers to trade would rise by 3% – a potential headache for the NHS, but far better than the 8% they assume under a no deal scenario.

The backstop gives no access to the incoming new EU system for approving and reporting clinical trials, the Framework Programmes that fund and coordinate research across Europe, EHIC, or any other reciprocal health care schemes.

Northern Ireland would still be partly covered by EU rules for medicines and medical devices under annex 5 of the protocol. However, this does not include key provisions that would allow approvals in Northern Ireland for medicine sales into the European Economic Area. At least for pharmaceuticals, predictions of a boom in Belfast may have been premature.

Two areas of regulation that some influential voices in the NHS have expressed an interest in changing after Brexit are working time regulations, which some see as limiting medical training, and procurement rules, which some see as an unnecessary burden on the commissioners who plan and fund care in the English NHS. The backstop would appear to rule out changes to working time, but there are no commitments on procurement.

Anything to declare?

A political declaration alongside the agreement sets out a future relationship between the UK and EU, including a free trade agreement. It is not binding as the EU will not sign a trade agreement with one of its own members: the process of turning it into a legal text would start during the transition. Whether its aspirations to find another solution to the Irish border can ever be realised remains unclear.

The Chequers white paper pledged a close relationship with the European Medicines Agency, where “medicines only go through one approval mechanism to access both markets”. However, the declaration does not mention this, and its wider provisions are difficult to reconcile with such a relationship. It repeatedly commits to end the free movement of people, and to uphold the “indivisibility” of the freedoms of the single market.

Because it falls short of single market levels of access, a free trade agreement would add administrative burdens and push up the prices of medicines, machines and equipment. My calculations suggest extra annual costs of around £400 million a year for the NHS across the UK, rather than £2.3 billion in the case of a no deal Brexit. This reflects estimates from Sussex University that the price of medicines would rise 5%, and from the government that the price of equipment and machinery would rise 4%.

In line with the overall pattern of leaving the single market, the declaration does not cover EHIC, any other reciprocal health care programmes, or clinical trials. The end of free movement of labour between the UK and EU would in itself create real problems for the health and social care sectors if it heralded a more restrictive system.

Agreements with other countries outside the single market suggest a trade deal like this could do a lot to keep UK access to the European market for medical devices, and vice versa. Australian regulators are allowed to issue the CE mark that permits open sales into the EU. Turkey has the right to sit on the European Standardisation Committee that sets these standards.

It should be possible for the UK to become an associate member in the EU’s Framework Programmes that play a major role in funding and coordinating science and research.

Modelling of the wider economy suggests a future relationship of this sort would slow down the UK economy, cancelling out extra money for public services freed up from not paying into EU budgets. The UK in a Changing Europe calculate the net effect of the deal at 0.4% to 1.8% less money for the Exchequer.

While the impact of Brexit on the NHS might not be fully understood for decades, these detailed documents mean we have come a long way from the days of arguing about a tenuous number on the side of a bus. We have circulated a briefing for MPs outlining the full implications – and while their viewpoints are likely to vary, I hope parliamentarians will weigh these issues carefully as they take their fateful vote on December 11.

Suggested citation

Dayan M (2018) “Deconstructing the deal: what the Brexit agreement with the EU means for the NHS", Nuffield Trust comment.