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Legal Implications of COVID-19 for Pharmaceutical and Medical Device Companies in the United Kingdom

OVERVIEW


The impact of Coronavirus (COVID-19) on pharmaceutical and medical device companies has been unique as, not only have these businesses had to set up emergency management systems practically overnight in order to maintain their “normal” business operations, the population also expects the sector to make significant contributions to the fight against COVID-19.

The current crisis mode raises a variety of legal and commercial questions. This article addresses a number of key issues that specifically affect the pharmaceutical and medical device industry in the United Kingdom.

IN DEPTH


Clinical Trials

COVID-19 will cause considerable delays to numerous clinical studies already underway, particularly those being conducted in National Health Service (NHS) hospitals.

The UK Medicines and Healthcare products Regulatory Agency (MHRA) has published guidance regarding the management of clinical trials during COVID-19. For applications for clinical trials relating to COVID-19, parties are asked to submit applications directly to the Clinical Trial Helpline (clintrialhelpline@mhra.gov.uk) and to seek expedited ethics committee opinions.

In line with World Health Organisation requests, the MHRA has asked parties to ensure that the official acronym for the coronavirus (COVID-19) is entered in the title field of the trial registration data set to facilitate finding and extracting clinical trials from public databases.

Pharmaceutical companies should assess the effects of COVID-19 on their upcoming and ongoing clinical trials and should review the Managing clinical trials during Coronavirus (COVID-19) document published by the MHRA. This provides guidance in respect of paperwork for trials that have been halted, restarting paused clinical trials, reducing participant monitoring visits or replacing in-person visits with phone calls, and reporting serious adverse events and annual safety reports.

For updates on guidance surrounding clinical trials in the United States, click here.

Impending Supply Bottlenecks

The increasing spread of COVID-19 poses a medium and long-term risk to the supply of drugs to the United Kingdom. The NHS is estimated to import 80% to 90% of its drugs supply from abroad, with an estimated 25% of its generic drugs coming from India.

For several weeks now, attention has also been turning anxiously to China, which supplies raw ingredients to other countries, particularly India, and where production has been adversely affected due to COVID-19. In India, many contract manufacturers have restricted or completely stopped production given concerns regarding the retention of drugs for local needs. In addition, the Indian Government has recently limited the export of 26 pharmaceutical ingredients, including paracetamol, certain antibiotics, progesterone, and vitamins B12, B1 and B6.

Pharmaceutical companies should keep an eye on the production networks and supply chains relevant to them and, where possible, ensure that they do not depend exclusively on individual suppliers. If there is a risk of a supply bottleneck in a specific case, e.g., owing to a contract manufacturer having to reduce or discontinue its activities, pharmaceutical companies should review their rights under the respective contracts in order to at least limit adverse commercial effects.

Parallel Exports and Hoarding of Restricted Medicines

On 20 March 2020, the UK Government expanded the list of medicines that cannot be parallel exported from the United Kingdom or hoarded. Certain drugs were already banned for export ahead of Brexit in October 2019, but the list has been extended to cover 80 medicines used to treat patients in intensive care units, and includes adrenaline, insulin, paracetamol and morphine.

Parallel exporting is when companies buy medicines meant for UK patients and sell them for a higher price in another country. This can lead to, or aggravate, supply problems. The UK Government has stated that the new restrictions are a standard measure to manage potential medicine shortages and to protect UK patients.

Hoarding is also prohibited, although companies can continue to withhold medicines to maintain Brexit stockpiles and as part of stock management arrangements agreed with marketing authorisation holders.

Companies that parallel export a medicine on the ban list, or hoard medicines, may face enforcement action from the MHRA and risk having their trading licence revoked for serious breaches. Pharmaceutical companies should examine to what extent their drugs are affected by the restrictions. The current list of restricted medicines is available here.

Expedited Digital Transformation

Pharmaceutical and medical device companies are being required to carry out a digital transformation in the shortest possible time, at least in certain areas.

For example, the sales force is no longer able to carry out consulting and advertising activities at doctors’ premises, but it’s not clear whether and how the sales force can “work from home” instead. Internal and external training must be cancelled and, as far as possible, converted to digital platforms such as video conferences, webinars, etc. In the context of cooperation with other players in the health system, including healthcare professionals, communication channels may also have to be changed.

The new, primarily digital, approach to work raises particular data protection issues in individual cases. If, and to the extent that, these new digital approaches relate to cooperation with healthcare professionals, they must also be checked for compliance with existing applicable drug advertising, and social, criminal, and professional, laws and regulations.

Accelerated Market Access for Drugs to Treat COVID-19 and Certain Medical Devices

The MHRA said on 23 March 2020 that it is working closely with the Department of Health and Social Care and other healthcare partners on COVID-19, and is prioritising certain fields, including supporting and authorising the development of vaccines and the launch of clinical trials for new medicines, and managing the supply of medicines and healthcare products. Guidance can be found here.

The position is evolving rapidly and, in the last few days, the MHRA published specifications for ventilators to be used in UK hospitals during the outbreak and particular guidance on COVID-19 test kits. There are currently requirements for information to be submitted from manufacturers of COVID-19 test kits and the MHRA has stated that specifications for test kits are being developed and will be published shortly.

Existing pharmaceutical legislation provides for a number of procedures to ensure rapid market access for drugs in particularly sensitive cases.

At the EU level, these procedures include, in particular, the Priority Medicine (PRIME) system, which enables accelerated assessment and granting of conditional approval for priority medicines. The European Medicines Agency (EMA) currently offers free scientific advice for the benefit of companies developing vaccines or therapeutics against COVID-19. These companies are invited to contact EMA at 2019-ncov@ema.europa.eu.

The “normal” approval process timeline from submission to approval can take around two years. Under the accelerated approval processes of the EMA—the “conditional marketing authorisation” (CMA) introduced by the EMA in Europe in 2003—experience has shown that qualifying vaccines/treatments take between 6 and 12 months to be approved, as opposed to the usual 24 months. In addition, the approval process can start earlier, e.g., during Phase II rather than on completion of Phase III. The EMA has granted more than 30 CMAs since they became available in 2003, nine of which were for infectious diseases, including HN51 bird flu treatments, in a comparable pandemic situation.

For products intended for use in emergency situations, less comprehensive pharmaceutical and non-clinical data may be accepted. The EMA and national regulators will assess whether or not public health would benefit from immediate availability, and whether or not that benefit is greater than the risk posed by accepting less than the usually required evidence of safety and efficacy. This would undoubtedly be the case with a COVID-19 product.

Specifically, CMAs may be granted if the EMA’s Committee for Medicinal Products for Human Use (responsible for deciding whether to grant authorisation) finds that

  • Benefits outweigh risks

  • The applicant can provide comprehensive data at a later time

  • There is no existing treatment

  • The benefit to public health of the drug’s immediate availability outweighs the risks of not having comprehensive data right now.

CMAs are valid for one year, and can be renewed annually. The “conditions” normally attached mean the applicant has to complete the trials and generate the data, which would comprise a comprehensive application for a standard marketing authorisation (i.e., one not subject to the accelerated process), and that data should confirm that the benefit/risk balance is positive. If it does, the CMA may be converted into a standard marketing authorisation.

It is not inconceivable that the accelerated process will still be deemed not be quick enough so we may see further developments.

Market Entry Facilitation for PPE and Selected Medical Devices

The spread of COVID-19 has led to an extraordinarily high and further increasing demand for protective goggles and visors, mouth-nose protection equipment, and protective clothing and gloves. These products qualify as personal protective equipment (PPE) or medical devices whose market entry usually requires a–—sometimes lengthy—conformity assessment procedure to achieve Conformité Européene (CE) marking.

In order to adapt the supply of these products to the increasing demand as quickly as possible, the European Commission seeks to simplify, to a considerable extent, the market entry for PPE and medical devices with its Recommendation (EU) 2020/403 of 13 March 2020.

In the Recommendation, the Commission requests the competent market surveillance authorities and notified bodies to take all available measures to provide immediate access to PPE and medical devices for healthcare professionals for the duration of the current health threat. Accordingly, PPE and medical devices may be placed on the market temporarily and in certain circumstances even without CE marking.

Medical device companies should carefully consider, and coordinate with the competent supervisory authorities and notified bodies to determine, whether or not their products are eligible for market access facilitation in line with the Commission Recommendation.

There is a parallel regulatory process with respect to medical devices. Across the European Union, and the United Kingdom while it remains in the Union during the transition period, the level of approval required is undergoing change as the Medical Devices Regulation (MDR) takes effect, succeeding the Medical Devices Directive (see below). Practical questions will have to be asked regarding the suitability, as well as assessment and approval, of new entrants to ventilator manufacturing, as the UK Government positively seeks an exponential increase in production capacity for such devices.

Export of PPE and Selected Medical Devices Subject to Authorisation

PPE and certain medical devices in particular demand as a result of COVID-19 are currently manufactured in only a few Member States. Some countries have already prohibited the export of protective equipment to ensure they meet their own needs.

In order to continue to meet the high demand for PPE and selected medical devices in the European Union in the future, the Commission, in Regulation (EU) 2020/402 of 14 March 2020, temporarily made the export of certain products subject to authorisation. An export license will only be issued in special, individual cases.

These new export restrictions are problematic for companies whose products fall within the scope of the Regulation and which are contractually obliged to supply these products to third countries. In these cases, the companies will have to assess whether an export license can be considered and, if not, what legal and other options exist to deal with the export ban in the context of the business relationships concerned.

Moratorium and Emergency Plan for the Medical Devices Regulation?

In the light of COVID-19, leading associations in the medical device industry are calling for a moratorium on the conversion to the MDR, which could barely be achieved in time even before the crisis.

The temporary closure of competent authorities and notified bodies is making it even more difficult for medical device companies to obtain new CE certificates under the MDR requirements. Whether and to what extent COVID-19 will have an impact on the date of application of the MDR is, however, currently still open.

Brexit Progression

The United Kingdom’s departure from the European Union may have a bearing on the time to market of a COVID-19 treatment in the United Kingdom. Given the importance of the pharmaceutical industry to the UK economy, as well as the government’s desire to enhance the positive effects of Brexit, it is possible that the United Kingdom might wish to position itself as a forerunner in the faster approval of drugs, gaining an advantage over the rest of Europe, if not the world.

It is not difficult to envisage the government seizing an opportunity to show the world its credentials for decisiveness and innovation, while also actually assisting public health and, at the same time, highlighting the benefits of diverging from, and not being constrained by, EU regulation.

Clearly, the pandemic has taken priority over all other issues, and occupies the efforts and resources of governments around the world. As the United Kingdom and the European Union deal with this crisis, the Brexit transition period is passing, and the clock continues to tick on the current timelines during which an agreement may be reached regarding the future EU-UK relationship.

The UK Government has repeatedly stated it has no appetite for extending either the transition or negotiating period, but the expiry of the transition period (due to end 31 December 2020 unless, by 1 July 2020, the European Union and United Kingdom mutually agree an extension) with no agreement on future relations will fundamentally affect the reciprocity of approvals and the import/export of pharmaceutical products and medical devices. It is, therefore, to be hoped that the Brexit outcome is a positive choice, rather than the consequence of limited time and resource.

© 2020 McDermott Will & EmeryNational Law Review, Volume X, Number 85

TRENDING LEGAL ANALYSIS


About this Author

Partner

Sharon Lamb is a healthcare specialist and an expert in transformative healthcare transactions and projects, as well as comprehensive healthcare regulatory advice. She has advised both the private sector and public organisations on transactional mandates, including hospital mergers and acquisitions, complex health care projects, accountable care systems, healthcare payment systems, hospital developments and contractual and joint venture arrangements.

Sharon further is well-versed in governance and regulatory matters (internal governance and...

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Gary Howes Live Sciences Attorney London
Counsel

Gary Howes has nearly 25 years of experience advising clients in the life sciences sector on the myriad legal issues that affect this key industry. Gary advises clients on industry specific commercial contracts, patent licensing agreements, alliances, collaborations and technology transfers, IP and regulatory matters and product acquisitions and disposals.

Gary’s clients include private and public biotech companies and pharmaceuticals ranging in size and scope from start-ups to established, multinational corporations. He also represents academic and research institutions and serves as a trusted advisor to in-house general counsel and senior executives.

Gary draws on his extensive background to help life sciences clients develop and implement strategies that balance industry-specific laws, competitive pressures and best practices with broader legal, regulatory and market developments. Gary speaks regularly at prominent industry events, having served as a presenter, panelist and moderator at conferences and symposia across Europe and North America.

Prior to joining McDermott, Gary was a Partner at an international law firm, where he founded the firm’s life sciences industry group.

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