What should we expect for medical supplies in 2021?

Martha McCarey follows on from our recent report on the impact of Brexit on health in the UK by assessing what we should now look out for on medical products. This blog was originally published on 30 December, and has been updated to reflect that the UK has now left the EU single market.

Blog post

Published: 30/12/2020

Updated: 05/01/21

Since December 31, the UK has left the EU single market. Alarming predictions have abounded on what this would mean for the supply of medical products and health care more widely. Our recently published report, funded by the Health Foundation, examines these issues in greater detail.

This blog looks at what happens now to medical products, how changes have been addressed, and what risks remain.

Status quo: the transition period

Medicines and medical devices – the bulk of medical products crossing the borders between EU member states – were previously exempt from tariffs and checks. The European Medicines Agency (EMA) regulates processes such as testing and certification, which enables this seamless transfer of medicines and devices across the EU. As of January 1, the UK Medicines and Healthcare products Regulatory Authority (MHRA) has taken over the EMA’s remit in the UK.

Here are some of the things to look out for from now on.

Day one

Medical products as goods: the customs problem

The recent Trade and Cooperation Agreement ensures that the large majority of goods crossing the border between the UK and European countries are, in addition to medical products, not subject to tariffs – so long as they comply with rules of origin, which are specific to individual types of product. In addition, it provides for the mutual recognition of ‘authorised economic operators’ at customs. This is a significant improvement over no deal.

However, goods moving by lorry from France to England across the ‘short straits’ will still be subject to delays from checks at the border. Although most checks have little to do specifically with medical products – they either apply to all products, like export declarations, or to specific products like meat – this raises the risk of long queues at designated ports, causing delays in the transport and delivery of medicines and devices. The recent closure of French borders to UK lorry drivers in an effort to counter the spread of a new strain of Covid-19 may presage or aggravate supply disruption.

The NHS and UK government have planned extensively to mitigate any supply disruption. The government intends to re-route goods through smaller UK ports to ease congestion at the strait of Dover, and to use air travel for emergency supplies including perishables.

This plan follows a ‘reasonable worst-case scenario’, which assumes that disruption will be serious but limited to ports in Kent. The financing and rationale for these alternative border arrangements have not been published.

In 2019, the Secretary of State sent a letter requiring a six-week stockpile from UK pharmaceutical and medical device companies in addition to their business-as-usual inventory. In 2020, several waves of Covid-19 have depleted stocks of some key medicines. Medicines held centrally were affected, as possibly were medicines held by firms, although public data is limited for the latter. In spite of this, a revised letter in August stated that companies would be sufficiently covered as long as their total stock covered six weeks of inventory. The basis for the original and revised stockpiling estimates is unclear.

The government has worked to avert large-scale disruption and shortages. Similarly, there is no reason to think that larger companies would not comply with stockpiling requirements or shift to new supply routes. However, small and medium enterprises may struggle even with the government’s conservative ask and face greater business risks as a result. Given the sheer volume and variety of goods crossing the border, it is not unlikely that some categories of goods might simply fall through the net. It should also be noted that prior to Brexit, medicine shortages increased during the first Covid-19 UK-wide lockdown.

Medicines

Since January 1, the UK has left the EU framework for the regulation of medicines and devices. Significant bureaucratic change will ensue for traders and suppliers.

Regulating medicines and devices involves a series of particular processes, including batch testing, approval and certification of manufacturing practices. The EU has never accepted mutual recognition for medicines or clinical trials approvals outside the single market, although it has agreed this for batch testing and manufacturing inspections in mutual recognition agreements with other countries.

The UK-EU agreement does set up a system for the two sides to recognise one another's Good Manufacturing Practice inspections of medicines facilities. However, it contains nothing on other stages in the process. For example, with no provision on batch testing, from the 1st of January the UK is not a legal place to test medicines for sale in the EU.

The limited provisions, again, are an improvement over no deal. However, they mean that for many regulatory requirements, goods signed off in the EU are accepted in both the EU and UK, but UK-approved goods only in the UK. This poses a risk to the competitiveness of UK goods in the longer term. More immediately, it adds bureaucratic hurdles for export-oriented businesses. Smaller businesses will not fare as well as larger conglomerates.

Medical devices

Medical devices undergo a separate, decentralised regulation by third-party bodies designated by national regulators such as the MHRA in the UK. Subject to certification, devices may display the CE mark, allowing them to circulate freely in the EU. The UK left the EU certification process for devices on 31 December.

CE marks will be recognised for two and a half years in Great Britain, and indefinitely in Northern Ireland under the Protocol, to address supply issues in the short term.

However, companies supplying and manufacturing devices – often for export – are generally smaller. There is once again a risk that they will struggle to absorb resulting changes in policy, bureaucratic burdens and added costs. For as long as it accepts CE marks, the UK is also abandoning any regulatory control of these products – which have seen serious safety issues in recent years, such as the vaginal mesh scandal.

Northern Ireland

The Northern Ireland Protocol removed hard borders between the Northern Ireland and the Republic of Ireland by maintaining Northern Ireland in the single market for goods, and giving it a complicated customs status shared between the UK and EU. This arrangement will be in place until it is re-examined at Stormont in 2024, and every four to eight years thereafter.

Following a statement from the Joint Committee on the Withdrawal Agreement on 8 December, the UK and EU have agreed a three-month grace period that allows individuals and entities further time to comply with new bureaucratic requirements.

For medicines specifically, the new regulatory regime is being phased in over a year to prevent supply disruptions at the border compounded by Covid-19, and enable those involved in trade or regulation to adjust to new requirements. The requirement to decommission safety features applied to products supplied from the EU to the UK is temporarily being suspended, GB quality control will apply in ‘justifiable cases’ of small external markets served by Great Britain, and breaches in EU law in the absence of manufacturing authorisation holders in Northern Ireland will not be sanctioned.

The new agreement on Northern Ireland mitigates some immediate disruptions by ensuring relatively smooth cross-border transit of medicines until the new regime is in place. However, in the long run Northern Ireland will operate as a parallel market where EU medical regulation still applies, while the UK gradually diverges from it. It is unclear how this process will be managed, and whether it might mean some companies or products exiting this unusual market.

Conclusion

As warned in our report tracking the impact of Brexit on health, despite efforts to mitigate disruption from day one, uncertainty remains high.

The lack of transparency and data around the government's plans to avoid shortages is intended to protect commercial confidentiality and avoid panic. However, if concern becomes widespread, this might actually make it harder to provide reassurance to a nervous public and to the NHS, and is likely to embitter debates and impact assessments this year.

Companies and the government have done a great deal to stave off widespread shortage – but keeping every single one of the tens of thousands of supply chains the NHS needs unbroken in the midst of these sweeping changes is a truly daunting task.

Suggested citation

McCarey M (2020) “What should we expect for medical supplies in 2021?”, Nuffield Trust comment.

Updated 05/01/2021

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