What are the biggest implications of Brexit? What are the changes and impact on device companies?
I think the biggest change right now is uncertainty because we don’t know the extent of how fully the UK will exit from the European Union. For example, American companies traditionally tended to work with notified bodies that are UK-based or Ireland-based due to the language commonalities. If the UK exits from the EU fully, it means leaving the EU regulatory system and leaving the CE mark system, so all notified bodies in the UK will not be able to work with medical device companies. That’s one of the question marks that has come up pretty quickly.
If they do decide to fully exit because they cannot reach an accommodation, then it could mean a completely separate approval process for getting a product/medical device on the market. It could mean you have to have separate regulatory system paths, separate clinical studies, you know, all of these things that right now are fairly seamless to do in Europe would become a two-tiered system.
As of this posting, the British Prime Minister has still not triggered Article 50 and suffered a recent set back from the British Supreme Court, which ruled that the government must get approval from Parliament.
So what are device companies doing now?
We haven’t seen a stand still from a work standpoint. I think everybody knows that it’s going to take at least two years for this to happen. So from that standpoint, if you want to get on the market in the UK, now is a really good time to do it because you still have the benefits of being in the EU. Now, I should mention that, as a rule, companies tend to look at other markets in Europe, particularly Germany, rather than entering into the UK first because getting products on to the National Health Service (NHS) is much more cumbersome and getting on the market as a whole in the UK is more complicated because you do not have a countrywide system for product entry. There is an NHS central procurement, but today most hospitals buy at their local level or NHS trust level. Unless you are lucky, like Nobles Global’s client HeartFlow, and you get a good NICE recommendation. Then that will definitely drive adoption.
If companies avoid the UK, what in your opinion, are the gateway countries?
Germany, Germany, Germany.
What advice are you giving your clients now, as you wait through the two-year transition period?
It really hasn’t come up too much. I think more the concern right now is about the medical device directive that’s going to come in – hopefully be instituted by the end of the year or early next year. I think that’s where most people have been putting their attention because that has a bigger impact. You can go to market in Europe without doing the UK. It’s not a make-or-break market today, by and large, unless you make the investment of getting a NICE recommendation, etc. But some companies are not. We have one pharmaceutical project right now where they are on the market in the UK because they’ve gotten the product listed on the formulary. And it’s actually easier to get a drug going in the UK than it is a medical device because of that listing on the formulary, and then all the NHS hospitals will have access to that particular drug.
There’ve been a lot of questions and a lot of discussion about it, but it’s one of those things where Americans tend to pay more attention to the UK than to other parts of Europe.
That said, it is a big deal. I was just talking to our ophthalmology practice leader, and he said, “Oh, the markets are up …” But I said, “Yes, for now, but when they start the negotiations, it is going to have a negative impact once again on the UK economy.” And it’s going to have a negative impact. What I thing that could happen is that could have a very chilling impact on access to new technology within that market because people won’t mess with it. It has the potential of turning the UK into a developing country.
Anything else on this topic?
I think what will be important is what the government signals when they do invoke Article 50 and how open they are to finding a middle ground with the EU. A little bit ago I was looking at the BBC website and it indicated that the UK is going to start entering into negotiations with France over residency. France, in particular, has a huge population of French people who live in and around London, including my business partner. So there are many levels of things that people absolutely did not think about in the decision to vote and all of the implications.
For example, we have two young employees from Eastern Europe who might not have status and we may we have to send them back to their home countries. It is a very destabilizing event.