Brexit Key Challenges – a Brief Case Study

You may already have asked yourself how Brexit may affect your business. This is a very complex question as it strongly depends on the role of your company, your overall structure and many more aspects.

Base case and political situation

To provide a more practical approach, mdi Europa has set up a brief case study to make clear what challenges may lay ahead depending on the nature of your enterprise. Assume you are a UK based medical device manufacturer of a class IIa product – what aspects would have to be regarded? Please find below some considerations.

At this stage, it is not clear yet, if the European Union (EU) and the United Kingdom (UK) will come to an agreement with regards to the terms and conditions of Brexit.  This, in fact, is one of the biggest challenges.  Given the slow progress of negotiations, a “no deal” or non-regulated Brexit is becoming a more and more realistic option.  Experts broadly discussed the outcomes for the European medical devices industry and it is evident that the consequences may be threatening to any company that fails to prepare for this worst-case scenario.  For this reason, companies should plan on the assumption of a “no deal” Brexit: 

Challenges connected to Authorized Representatives

UK based manufacturers either need to set up a location in the EU or to appoint an EU Authorized Representative (AR) in one of the remaining EU countries.

One legal consequence of a “no deal” Brexit would be that the UK would be considered a “third country”.  This means that according to the EU legislation on medical devices (Medical Devices Directive 93/42/EEC (MDD), Active Implantable Medical Devices Directive 90/385/EEC (AIMDD), In Vitro Diagnostic Medical Devices Directive 98/79/EC (IVDD) and subsequently Regulations (EU) 2017/745 and (EU) 2017/746 on medical devices (MDR) and in vitro diagnostic medical devices (IVDR)), your company would either need to set up a location in the EU or to appoint an EU Authorized Representative (AR) based in one of the 27 remaining EU countries (EU27 countries) to keep up your sales activities. 

Challenges connected to supply chain

Moreover, a “no deal” Brexit would strongly affect the supply chain.  According to the MDR and IVDR, “‘distributor’ means any natural or legal person in the supply chain, other than the manufacturer or the importer, that makes a device available on the market, up until the point of putting into service” whereas “‘importer’ means any natural or legal person established within the Union that places a device from a third country on the Union market“ (Source: MDR, IVDR). 

If, by the time of Brexit, the UK will be considered a third country, EU27 based distributors will, for UK based companies, become importers.  Roles and responsibilities of distributors and importers differ and not all your EU27 based distributors might be able or prepared to act as importers for your products as well.  In addition, it is not clear yet, in how far future tariff regulations or regulatory differences may disrupt supply chains. 

Challenges connected to Notified Bodies

By the time the UK leaves the EU, UK based NBs will lose their accreditation and CE certificates issued by UK NBs will become void.

Another big issue that comes with a “no deal” Brexit concerns Notified Bodies (NB) and CE certificates.  By the time the UK leaves the EU, UK based NBs will lose their accreditation and CE certificates issued by UK NBs will become void.  This means that manufacturers who would like to continue selling their devices in the EU27 countries after Brexit, must designate a NB who is located in one of these countries and thus is able to issue a valid CE certificate. 

Vice versa, it is advisable to observe the regulatory development in the UK.  Although the UK plans to further accept CE marked products after Brexit for a limited period of time, the UK will develop an own regulatory regime with its own requirements.  Certainly, non-UK manufacturers who want to sell their products in the UK will need to appoint a “UK Responsible Person”, a role that is closely aligned to the EU Authorized Representative. 

Last, you should review the certificates of your (critical) suppliers, subcontractors and, if applicable, original equipment manufacturers (OEM). Certificates from a UK NB issued for one of your suppliers, subcontractors or OEMs will become void as well post-Brexit – a EU27 based NB most probably wouldn’t issue a CE certificate for you if your supply chain does not comply with EU legislation. 

The points above list some of the main points that should be regarded. If you have any specific questions related to this topic, please don’t hesitate to get in touch!

Sources: Guidance on the regulation of medical devices in a no-deal Brexit. Read full document “Further guidance note on the regulation of medicines, medical devices and clinical trials if there’s No-Deal Brexit on the UK Government website.
MDR, IVDR

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