The Life Sciences Law Review: United Kingdom
This chapter summarises the UK regimes governing medicines and medical devices. At the time of writing, the United Kingdom has left the European Union (EU) (Brexit) and the post-Brexit transitional period has come to an end, meaning that the UK is now no longer bound by any EU pharmaceutical or medical device laws. The one exception is Northern Ireland. The Northern Ireland Protocol to the Withdrawal Agreement between EU and the UK aims to avoid a hard border between Northern Ireland and Ireland by keeping Northern Ireland within the EU single market for goods. Goods will flow to and from Northern Ireland, Ireland and the rest of the EU as they did while the UK was a member of the EU, without customs checks or tariffs. To achieve this, EU pharmaceutical and medical laws continue to apply to and in Northern Ireland, while Great Britain (the UK minus Northern Ireland) will be able to develop its own laws for these sectors.
The starting point for that legislative process was the European Union (Withdrawal) Act 2018, which enabled the transposition of directly applicable, already-existing EU law into UK law at the point of Brexit. This included much of the EU's pharmaceutical and medical device laws, so we will not repeat much of the substantive content of the European Union chapter. Rather, we focus on unique features of the UK, Great Britain and Northern Ireland regimes, including steps that the UK has taken to develop its own regulations. While the chapter should be read in conjunction with the European Union chapter, the regulatory position in the United Kingdom, or at least Great Britain, is likely to change significantly in the future.
Medicines for human use are regulated primarily by the Human Medicines Regulations 2012 (the Medicines Regulations).2 The Medicines Regulations implemented Directive 2001/83/EC3 and most other EU medicines laws into UK law. The Medicines Regulations also consolidated most UK medicines legislation – including the majority of the Medicines Act 19684 – into one statutory instrument to provide a comprehensive regime for the authorisation, manufacture, import, distribution, advertising, sale and supply of medicinal products for human use. However, the Medicines Act 1968 continues to regulate some aspects, such as pharmacies and the dispensing of medicines.
Medical devices are regulated by the Medical Device Regulations,5 which implement the three EU Medical Devices Directives6 into UK law. Importantly, the UK has indicated that it no longer intends to give effect to Regulation (EU) 2017/7457 on Medical Devices, and Regulation (EU) 2017/7468 on In Vitro Diagnostic Medical Devices, which both entered into force on 25 May 2017 and will apply as of 26 May 2021 and 26 May 2022, respectively. Although the Regulations will apply in Northern Ireland, this means that as of May 2021, Great Britain will already have begun to deviate from the EU's medical future device rules (see below).
The Medicines and Healthcare Products Regulatory Agency (MHRA), an executive agency of the Department of Health and Social Care, is the United Kingdom's national competent and enforcement authority for the regulation of both medicinal products and medical devices. However, the 'licensing authority' is responsible for the granting, renewal, variation, suspension and revocation of licences, authorisations, certificates and registrations under the Medicines Regulations. The licensing authority comprises either or both of the Secretary of State for Health and the Minister for Health, Social Services and Public Safety, acting on the advice of the MHRA. Likewise, the Secretary of State exercises certain powers under the Medical Devices Regulations. The 'enforcement authority' comprising relevant ministers is responsible for authorising inspectors and for bringing enforcement actions.
The regulatory regime
The MHRA has primary responsibility for determining whether borderline products are medicinal products or medical devices. It does so case by case, having regard to the legal definition of a medicinal product and a medical device set out in EU law and implemented in the United Kingdom.
The MHRA's Borderline Section considers each product on its merits and any information that may have a bearing on the product's status; for example, its mode of action, pharmacological properties of the product's ingredients, the claims made for the product, whether there are any similar regulated products on the market, and how the product is presented through labelling, packaging, promotional literature and advertisements.
The Borderline Section provides informal, written advice on classification in response to specific enquiries about potential borderline issues. However, it will also exercise its enforcement powers following complaints about a particular product or based on its review of a product. In the latter scenario, the Borderline Section has a range of powers available to it to require removal of the product from the market (e.g., because it is an unlicensed medicine or a medical device that does not conform to the Medical Devices Regulations). However, the MHRA's usual approach is to serve a provisional determination notice advising that the MHRA considers the product a medicinal product or a medical device. A provisional determination must set out the reasons for the Agency's position and the options available to the person served with the notice should that person disagree with the determination. The options include the right to request an independent (advisory) review panel to review the determination and associated documentation. After considering the panel's advice, the MHRA makes a final determination. There is no right of appeal against a final determination, other than via the courts and judicial review. It is a criminal offence not to comply with the conditions of a final determination.
ii Non-clinical studies
The Animals (Scientific Procedures) Act 19869 implemented Directive 2010/63/EU10 into UK law from 1 January 2013. It permits research involving animals only in premises licensed by the Home Office, by appropriately qualified staff and in accordance with procedures designed to minimise animal pain and suffering.
The Good Laboratory Practice Regulations 199911 transpose Directive 2004/10/EC12 into UK law. They require that all animal studies be conducted in accordance with sound standards of good laboratory practice. These standards reflect the Organisation for Economic Co-operation and Development requirements.
iii Clinical trials
Clinical trials of medicines for human use are regulated under the Medicines for Human Use (Clinical Trials) Regulations 2004 (the Clinical Trial Regulations),13 which implement Clinical Trials Directives 2001/20/EC14 and 2005/28/EC15 into UK law. Clinical trials of medicinal products in humans are generally only permitted if the MHRA has granted a clinical trial authorisation (CTA) and an ethics committee has issued a favourable opinion. A CTA is not required for 'non-interventional' trials, but the definition of a non-interventional trial is very narrow. It covers only trials involving approved medicines used on-label where there are no changes to routine medical care, including prescribing decisions or additional monitoring or information-gathering procedures.
CTA approval process
Applicants for a CTA must submit the relevant application form, the investigational medicinal product dossier (IMPD) and supporting documentation via the MHRA Submissions portal. The MHRA aims to assess applications within 30 days from receipt of a valid application, but there are accelerated review times for certain studies. The Agency aims to review applications for Phase I trials in healthy volunteers within 14 days and there is also a 14-day notification scheme for clinical trials that involve an authorised medicinal product and meet certain conditions.
Applications for a positive ethics committee opinion are usually considered in parallel with applications for a CTA and are made via the National Research Ethics Service, which is part of the Health Research Authority. Following the adoption of the EU Clinical Trials Regulation (EU) No. 536/2014,16 the United Kingdom is currently working towards the establishment of a system for the granting of a single approval for a clinical trial, encompassing both MHRA and ethics committee review.
Non-UK sponsors of clinical trials in the UK must now designate a UK legal representative. All investigational medicinal products (IMPs) must have been manufactured or imported by the holder of a manufacturer's authorisation in the UK, unless they are sourced from a jurisdiction on the 'approved country for import list'. The list initially includes all EU and European Economic Area (EEA) countries. In such cases, a UK Manufacturing and Import Authorisation (MIA(IMP)) holder must check these IMPs have been certified by a Qualified Person (QP) in a listed country, before release to trial sites. QP certification is only possible if the product is manufactured in accordance with an appropriate standard of good manufacturing practice (GMP) and if the product conforms with the specifications in the IMPD. Recertification is unnecessary for IMPs that have been QP certified in a listed country and that are imported into Great Britain from outside the UK.
Sponsors must submit reports of suspected unexpected serious adverse reactions (both United Kingdom and non-United Kingdom) relevant to a UK trial to the MHRA and the relevant research ethics committee. There is also a requirement to submit annual safety reports. They must provide investigators with information on safety issues relevant to whether they enrol patients or allow them to continue with the study.
The Clinical Trial Regulations require sponsors to provide adequate insurance or indemnity to cover liabilities that may arise in relation to the clinical trial. The MHRA expects that a sponsor's insurance policy or indemnity will reflect the form recommended by the Association of the British Pharmaceutical Industry (ABPI) Clinical Trial Compensation Guidelines. The ABPI has also published specific insurance and compensation guidelines for Phase I clinical trials.
Clinical investigations of medical devices are governed by the Medical Devices Regulations. In addition to obtaining research ethics committee approval, the manufacturer must notify the MHRA prior to the conduct of a clinical investigation involving a non-CE-marked medical device. The MHRA assesses notifications within 60 days of receipt of a complete notification.
There is a different process for performance evaluation of a non-CE-marked in vitro diagnostic medical device (IVD). Manufacturers must draw up a declaration and follow the procedure set out in Annex VIII of the IVD Directive 98/79/EC and must also register details of the IVD for performance evaluation with the MHRA.
Manufacturers must report serious adverse events involving a device under clinical investigation to the MHRA. The MHRA requires manufacturers to provide insurance for subjects in clinical investigations of medical devices.
iv Named-patient and compassionate-use procedures
Regulation 167 of the Medicines Regulations implements the named-patient exemption under Directive 2001/83/EC into UK law. It allows the supply of unlicensed medicines in response to a bona fide unsolicited request by a healthcare professional to meet the unmet clinical needs of an individual patient. Medicinal products supplied under the named-patient exemption are known as 'specials'. A special may not be advertised (although price lists may be made available) and they should not be supplied if an equivalent authorised product is available. The responsibility for patient safety remains with the prescribing clinician.
If a special is manufactured in the United Kingdom, the manufacturer must hold a manufacturer's (specials) licence granted by the MHRA. Importers of specials must hold the appropriate wholesale dealer's or manufacturer's authorisation. In addition, importers must notify the MHRA 28 days prior to importing a special.
There are record-keeping requirements and serious adverse drug reactions must be reported to the MHRA.
The MHRA's Early Access to Medicines Scheme (EAMS) provides another exemption to the requirement for a medicinal product to have a marketing authorisation prior to being placed on the market. The EAMS has been adopted to enable patients with 'life-threatening or seriously debilitating conditions' to have early access to medicines that have yet to receive a marketing authorisation. The process for joining the scheme involves a two-stage evaluation by the MHRA: step I is the promising innovative medicine (PIM) designation, and step II is the EAMS scientific opinion. For medicines to qualify for the EAMS, they must meet the following criteria:
- the product is needed to treat a life-threatening or seriously debilitating condition, and there is a high unmet need;
- the medicinal product is likely to offer significant advantages over methods currently used in the United Kingdom;
- the potential benefits of the medicinal product outweigh the adverse effects; and
- the applicant is able to supply the product and to manufacture it to a consistent quality standard of GMP.
The Medical Devices Regulations permit the supply of custom-made medical devices that meet the essential requirements but have not been CE-marked, and also devices that do not meet the essential requirements, provided that the MHRA authorises their use.
The use of an individual non-complying medical device, for a single named patient, is permitted only in exceptional circumstances; for example, where no alternative CE-marked devices are available or where it has been demonstrated that the morbidity or mortality of patients is significantly reduced with the use of the device in question as compared to those using alternative available treatment. The MHRA requires that an application be made for each patient, which includes information from the manufacturer and relevant clinician.
v Pre-market clearance
Regulation 46 of the Medicines Regulations implements Article 6(1) of Directive 2001/83/EC, which requires that a medicinal product has a marketing authorisation prior to being placed on the market. It is an offence for any person to sell or supply, or offer to sell or supply, an unauthorised medicinal product or a medicinal product otherwise than in accordance with the terms of a marketing authorisation.
The EU centralised procedure no longer applies in the UK and the MHRA is the UK national competent authority for review of all marketing authorisation applications for the UK, although the relevant ministers acting through the licensing authority grant the authorisations. The UK has converted all centralised marketing authorisations into UK marketing authorisations, unless the holder opts out.
Pursuant to the Northern Ireland Protocol, a marketing authorisation to EU standards is required to market medicines in Northern Ireland, whereas a marketing authorisation granted by the licensing authority allows medicines to be placed on the market in Great Britain.
The EU chapter summarises the conformity assessment and CE-marking procedures for medical devices. Because there is little regulatory pre-market review and approval of medical devices (with the exception of a medicines regulator's review of devices incorporating medicinal products and blood products), the MHRA has no involvement in the process leading up to CE marking.
However, the Medical Device Regulations require that manufacturers and authorised representatives based in the United Kingdom that are placing Class I or custom-made devices on the market to register details of themselves and the medical devices with the MHRA.
Following Brexit, the UK has decided not to implement either the EU Medical Devices Regulation or its IVD equivalent. In the short term at least, the UK will align its medical devices regime with the current EU devices directives. Until 2023, it will allow CE-marked devices to be placed on the market in the UK but, from 2023, medical devices for the Great Britain market must bear the UK conformity assessment (UKCA) mark.
vi Regulatory incentives
The Medicine Regulations implement the EU periods of eight years' regulatory data exclusivity (during which generic applicants cannot file) followed by two years' market exclusivity (during which regulators may review generic applications, but generic manufacturers cannot launch) under Directive 2001/83/EC for products for which qualifying national applications were submitted after 30 October 2005. For complete free-standing applications submitted on or before that date, UK marketing authorisation holders would benefit from 10 years of data exclusivity protection, during which generic applicants cannot file. Post-Brexit, the start of these regulatory exclusivity periods will depend on the type of approval. Because EU law continued to apply in Northern Ireland, the periods begin when the product is first approved anywhere in the EEA, not necessarily in the United Kingdom. For Great Britain, the clock starts when the product was first approved in the UK.
The UK will continue to offer orphan exclusivity in accordance with EU standards, but applicants will submit applications to the MHRA and timing of exclusivity protection will be calculated from the product's first approval in the UK. Similarly, companies must agree paediatric investigation plans (PIPs) with the MHRA post-Brexit and will benefit from rewards equivalent to those under EU law.
In the United Kingdom, the Intellectual Property Office is responsible for granting supplementary patent certificates for medicinal products that meet the criteria under Regulation (EC) No. 469/2009.17
UK legislation does not provide specific regulatory exclusivity periods for medical devices. A device may be protected by a UK patent if it satisfies the requirements for patentability under the Patents Act 1977.18 A UK patent is granted initially for four years and is renewable annually thereafter up to a maximum of 20 years from the filing date of the patent application.
vii Post-approval controls
The United Kingdom's post-approval controls over marketing authorisation holders for medicines and manufacturers of medical devices closely mirror the EU requirements. However, reports and notifications are exclusively to UK regulators, such as the MHRA, post-Brexit.
Transfer of marketing authorisations for medicines
Marketing authorisation holders may apply to the MHRA to 'transfer' ownership of their marketing authorisations to third parties. If satisfied that the recipient is suitable to hold the approval, the MHRA will grant the transferee a new marketing authorisation. It will usually also allow the original authorisation to remain in force for a transitional period. This avoids interruptions in supply by allowing a product in the name of the original authorisation holder to be placed on the market until the new product is widely available.
Revocation, suspension or variation of marketing authorisations
The licensing authority, acting through the MHRA, has the power to revoke, suspend or vary a marketing authorisation. Companies that are unhappy with the proposal have the right to appeal to the appropriate committee, then to an independent review panel in accordance with Schedule 5 of the Medicines Regulations.
viii Manufacturing controls
The substantive requirements governing the manufacture of medicinal products, including the need for a manufacturing or import authorisation, a qualified person and compliance with GMP, are discussed in the European Union chapter.
The MHRA regulates pharmaceutical manufacturing and import operations within the United Kingdom, although the licensing authority actually grants, suspends and revokes manufacturing authorisations. The MHRA will conduct inspections of manufacturing facilities before authorisation and periodically thereafter.
Changes to UK manufacturing and wholesale distribution authorisations require variations to be submitted to the MHRA. A change of name of the licence holder, if it remains the same legal entity, requires a simple administrative notification to the MHRA. Transfers of authorisations from one legal entity to another require submission of a change of ownership application signed by both the transferor and the transferee. The MHRA will only accept such change of ownership applications if there is no substantive change to premises, operations or personnel. If there are any substantive changes, the MHRA will treat the application as an application for a new licence.
Post-Brexit, product entering the UK will need to be imported by the holder of a manufacturers import authorisation (MIA) and batch released for the Great Britain market by a QP. Until 2023, the UK will continue to recognise batch release by a manufacturer in the EEA, and allow the import of such product into the UK by the holder of a wholesale distribution authorisation, provided that a responsible person for import (RP-I) verifies that the product has been lawfully QP released in the EEA. Product entering Northern Ireland will need to be batch released by a manufacturer in the EEA.
ix Advertising and promotion
The Medicines Regulations implement the EU advertising rules into UK law. These include the general requirements that advertisements should not be misleading, that they should be substantiated and that they should be accompanied by appropriate prescribing information. There is also a prohibition on pre-approval or off-label promotion of medicines, advertisements of prescription-only medicines to the general public, and illegal inducements to prescribe. Guidance from the MHRA, called the Blue Guide on Advertising and Promotion of Medicines in the UK (the Blue Guide), supplements the Regulations and is intended to provide additional clarification on the interpretation and application of the law. The MHRA is the statutory enforcement body for these rules and requires pre-vetting of advertising material in some circumstances; for example, new active substances granted marketing authorisations.
The statutory scheme is supported by a long-standing system of self-regulation based on the ABPI Code of Practice for the Pharmaceutical Industry (the ABPI Code). The ABPI Code is enforced by a self-regulatory body called the Prescription Medicines Code of Practice Authority (PMCPA), which adjudicates complaints by competitor companies and individuals, but can also bring proceedings itself.
The ABPI Code governs the advertising of prescription-only medicines to health professionals, relevant administrative staff and to the general public. It only applies to companies that are members of the ABPI or that have formally agreed to abide by the ABPI Code. The success of this self-regulatory scheme has meant that the MHRA has not needed to exercise its statutory enforcement powers against legitimate pharmaceutical companies for nearly 30 years.
The provisions of the ABPI Code are consistent with the Medicines Regulations and in some instances more stringent. For example, under the ABPI Code, promotional material must not be issued unless its final form has been certified on behalf of the company by a person that is a registered medical practitioner or a UK-registered pharmacist. It also significantly limits companies' ability to provide promotional aids and seeks to regulate certain company interactions with the National Health Service (NHS).
The United Kingdom has no specific device advertising legislation. Medical device advertising is subject to general advertising rules, requiring that advertisements be substantiated, factual, balanced and not misleading.
The Association of British Healthcare Industries (ABHI) has incorporated advertising guidelines into its Code of Business Practice (the ABHI Code). The provisions of the ABHI Code only apply to ABHI members and companies that have formally agreed to abide by the ABHI Code. There is a complaints procedure, but at the time of going to press, the Complaints Adjudication Panel has yet to hear a complaint.
x Distributors and wholesalers
As under EU and hence UK law, distributors of medicinal products must hold a wholesale dealer's licence and must operate appropriate facilities and staff under the supervision of an appropriately qualified responsible person. They must comply with good distribution practices (GDP) and maintain appropriate batch records.
The Medicines Regulations define wholesale dealing as 'selling or supplying it, or procuring or holding it or exporting it for the purposes of sale or supply' to a person who receives it for the purposes of selling or supplying it, or administering it or causing it to be administered to a human being, in each case in the course of a business carried on by that person. Thus, the sale of a medicine without physically handling the product constitutes wholesale dealing, for which a distributor's authorisation is required.
The licensing authority, acting through the MHRA, is responsible for issuing, suspending and revoking wholesale dealers' licences in the United Kingdom. The MHRA will conduct inspections prior to the grant of such a licence and then periodically thereafter.
Consistent with EU law, the Medicines Regulations also regulate 'brokers', meaning persons who engage in activities in relation to the sale or purchase of medicinal products, except for wholesale distribution, that do not include physical handling and that consist of negotiating independently and on behalf of another legal or natural person. UK-based brokers must comply with GDP and must be registered with the MHRA.
The United Kingdom currently has no specific rules governing the distribution or wholesale of medical devices and the UK has indicated that it does not currently intend to implement the rules governing distributors and other economic operators in device supply chains under the EU Medical Devices Regulation (EU) 2017/745 and In Vitro Diagnostic Medical Devices Regulation (EU) 2017/746.
xi Classification of products
The Medicines Regulations presuppose that new medicinal products are generally restricted to use under medical supervision and made available only on prescription. There is also scope for imposing additional restrictions, such as requiring that certain products are prescribed only by specialists, or in hospitals. Non-prescription status is appropriate only for products with an appropriate level of safety and where self-diagnosis and treatment is appropriate without a healthcare professional's intervention or supervision.
There are two classes of non-prescription or over-the-counter drugs in the United Kingdom. Consumers must obtain pharmacy supply products bearing the designation 'P' from pharmacies, where they are dispensed under the supervision of a registered pharmacist. General sale list products may be sold through general retail channels, such as supermarkets, convenience stores, petrol stations and the like. These products bear the designation 'GSL'.
There are no UK rules governing the classification of medical devices that restrict their sale to the public.
xii Imports and exports
The United Kingdom's regulations governing the import and export of medicinal products reflect those at EU level. Unless products are intended only for trans-shipment via the United Kingdom, they must be imported by the holder of a manufacturer's authorisation. Products may only be exported by authorised manufacturers or distributors.
xiii Controlled substances
The Misuse of Drugs Act 197119 and subordinate legislation, including the Misuse of Drugs Regulations 2001,20 implement the UN Single Convention on Narcotic Drugs 1961 and the UN Convention on Psychotropic Substances 1971 into UK law. A 'domestic licence' is required to produce, possess, supply or offer to supply any controlled substance. Any person that intends to import or export a controlled substance must also obtain an import or export licence for the particular consignment, as applicable. The Home Office is responsible for issuing controlled substances licences in England and Wales. A domestic licence holder may only supply controlled substances to persons authorised to possess such substances; for example, registered pharmacists.
A breach of the Medicines Regulations is in most cases a criminal offence, and the MHRA has an Enforcement Division that considers and manages prosecutions. When the MHRA identifies a potential breach of the legislation, a letter is sent to the individual outlining the Agency's provisional view. The letter will generally list the potential breach or breaches and any public health risk identified where appropriate, along with any action the MHRA requests the company to take. The process to resolve these issues tends to be informal, with individuals agreeing to take voluntary action, so prosecutions are rare. Offences under the Medicines Regulations are usually triable either way (i.e., in summary proceedings before magistrates or on indictment before a crown court judge and jury, depending on the seriousness of the breach). They usually carry a penalty of a fine on summary conviction, or an unlimited fine and the possibility of up to two years in jail on indictment. The historic limit of £5,000 for fines on summary conviction was removed for offences committed after March 2015.
When the PMCPA Panel rules there is a breach of the ABPI Code under the self-regulatory scheme, the company concerned must give an undertaking not to repeat the offending advertisement or activity. The company, whether a member of the ABPI or not, must also pay an administrative charge of £3,500 per matter (or £4,500 per matter for non-members) where it accepts the Panel's decision that it breached the Code. The charge increases to £12,000 per matter (or £13,000 per matter for non-members) where the company appeals the Panel's decision and is unsuccessful. At the conclusion of a case, the PMCPA will also publish a detailed case report in its Code of Practice review and on its website.
The MHRA is responsible for ensuring compliance with the Medical Devices Regulations. For enforcement purposes, an offence under these Regulations is often treated as a breach of a safety regulation under the Consumer Protection Act 1987.21 A person who contravenes the Medical Devices Regulations is liable for a penalty of six months' imprisonment or a fine per breach.
The main sanction under the ABHI Code for non-compliance is negative publicity. An administrative charge is also payable. However, there have been no complaints procedures under the Code and the level of the administrative charges payable has not yet been determined.
Pricing and reimbursement
The NHS is primarily funded by general taxation. The NHS consists of four individual systems: NHS England, Health and Social Care (HSC) in Northern Ireland, NHS Scotland and NHS Wales. In England, the Department of Health and Social Care controls the NHS.
The NHS pricing and reimbursement process is essentially a free pricing model for innovative medicines. There are separate schemes for generic medicines. Manufacturers set the reimbursement price of products, usually having consulted the Department of Health and Social Care (DHSC). This price is published in the Drug Tariff. The Secretary of State has the power to impose price reductions under the National Health Service Act 2006, but most companies historically have participated in the voluntary Pharmaceutical Price Regulation Scheme (PPRS) (for branded medicines), which provided for a system of price controls or rebates negotiated between the ABPI and DHSC. Companies that did not participate in the PPRS instead had to participate in a statutory scheme whereby the DHSC imposed price reductions. As detailed further below, the PPRS has now been superseded by the Voluntary Scheme for Branded Medicines Pricing and Access (Voluntary Scheme). In addition, the National Institute for Health and Care Excellence (NICE) assesses medicinal products to determine whether they are cost-effective and should be reimbursed by the NHS. NHS health service providers are expected to make funding available for products recommended by NICE.
ii Voluntary scheme for branded medicines pricing and access
The 2014 PPRS was superseded on 1 January 2019 by the 2019 Voluntary Scheme, which builds on many of the principles set out in the previous PPRS. The Voluntary Scheme is an opt-in arrangement negotiated between the DHSC22 and the branded pharmaceutical industry represented by the ABPI. The ABPI historically has negotiated the PPRS (in one form or another) approximately every five years to agree a price reduction or payment that participants must deliver during the term of the next scheme, with the reduction based largely on profits companies have generated on NHS sales. Similarly, the latest Voluntary Scheme is valid for five years up until the end of 2023. Historically, participants were able to deliver the price reduction in a number of ways; for example, through uniform price reductions, by selectively reducing the price of certain products and even by making a payment in lieu of a proportion of the reduction. Under the latest Voluntary Scheme, companies will be expected to deliver savings by making payments to the government, although those who are regarded as small or medium-sized companies, or have products that contain new active substances, may qualify for certain exemptions. The Voluntary Scheme also prevents companies increasing their product list price without the prior approval of the DHSC.
iii National Institute for Health and Care Excellence
NICE performs technology appraisals of medicines and medical devices and draws up clinical guidelines to assist the NHS in England and Wales. There are analogous procedures for other parts of the United Kingdom.
Under the National Health Service Act 2006, NHS entities should reimburse medicines used in accordance with a favourable appraisal determination, but are not precluded from reimbursing products that NICE has not recommended.
NICE appraises individual or multiple products, technologies and procedures and develops guidelines on the instructions of the Department of Health and Social Care or the Welsh Assembly government. Where necessary, it commissions an independent academic centre known as an assessment group to review available evidence, including submissions by manufacturers, and prepare an evaluation report. A NICE appraisal committee then produces an appraisal consultation document (ACD), which includes NICE's provisional view on the cost-effectiveness of a product and its recommendations. NICE has a fairly rigid approach to assessing cost-effectiveness. It determines the quality-adjusted life year (QALY) associated with a technology and uses that to calculate the cost per QALY saved (i.e., incremental cost-effectiveness ratio (ICER)). NICE will favour interventions with a lower ICER. If the ICER is less than £20,000, NICE will usually recommend reimbursement. For ICERs up to £30,000, it will often exercise its discretion to recommend a product, but above this threshold, it is unlikely to recommend a product unless there are extenuating circumstances. Stakeholders and commentators have four weeks to comment on the ACD. After considering comments on the ACD, the appraisal committee makes its final recommendations in the final appraisal determination (FAD). Stakeholders can appeal against the final recommendations in the FAD to the NICE Appeal Panel. If there are no appeals, or an appeal is not upheld, the final recommendations are issued as NICE guidance.
NICE has developed a highly specialised technology (HST) process, which is a variation of its existing processes designed to evaluate technologies for extremely rare conditions, essentially ultra-orphan medicines. NICE will recommend funding for HSTs with an ICER of less than £100,000 per QALY gained although it has discretion in certain circumstances to recommend products above that threshold, usually up to ICERs of £300,000. However, a medicine can only be appraised through the HST process if it satisfies narrow criteria. These include not only that the product is ultra-orphan but also that treatment is concentrated in very few centres in the NHS.
Finally, a partnership between NHS England, NICE, Public Health England and the Department of Health and Social Care also operates the Cancer Drugs Fund (CDF). NICE can recommend a drug for use in the CDF if it has the potential to satisfy the criteria for the standard health technology assessment process, but where there is significant clinical uncertainty that needs further investigation (i.e., through data collection in the NHS or clinical studies). The CDF provides an interim funding mechanism, often while a company gathers additional data to demonstrate the cost or clinical effectiveness of its drug.
NICE is currently contemplating whether to move to a more flexible 'value-based' approach to health technology assessment, perhaps for medicines for small patient populations.
iv Medical devices
There is no formal scheme in the United Kingdom that governs the pricing and reimbursement of medical devices. Some devices are listed in the Drug Tariff, but these are largely consumable devices used by outpatients. Many other devices are reimbursed as part of the cost of NHS procedures under the Payment by Results system of tariffs. However, NICE performs some technology appraisals of medical devices.
Administrative and judicial remedies
It is possible to challenge the decisions of national public authorities, such as the MHRA or NICE, by judicial review. This is a procedure by which courts examine the decisions, actions or failures to act of a public body, subject to general principles of administrative law. Before seeking judicial review, the applicant must have exhausted all other avenues of redress, such as internal or administrative appeal procedures. In addition, the relevant act and body must be amenable to review, the claimant must have 'sufficient interest in the matter to which the application relates',23 or legal standing, and the claim must be commenced 'promptly and in any event not later than three months after the grounds to make the claim first arose'.24
The grounds for judicial review are constantly evolving but, in general, the courts will consider whether decisions or acts of a public body are illegal, irrational or procedurally unfair.25
There are three specific discretionary remedies for judicial review proceedings: quashing orders, prohibiting orders and mandatory orders. A claimant may also seek a declaration, a stay or injunction and, in certain circumstances, damages. Claimants typically seek a quashing order to set aside the public body's decision, together with a mandatory order directing the public body to take the decision again in accordance with the court's judgment.
Where national judicial review proceedings involve matters of EU law, national courts may refer questions of EU law to the Court of Justice of the European Union (CJEU). The CJEU will issue a preliminary ruling, which the national court can use as a basis for its judgment.
Financial relationships with prescribers and payers
Regulations 293 to 300 of the Medicines Regulations implement into UK law the EU rules on the promotion of medicinal products and interactions between pharmaceutical companies and healthcare professionals. The legal position concerning communications or activities of pharmaceutical companies involving prescribers and payers is therefore the same in the United Kingdom as in the European Union and contains a broad prohibition on the offer to healthcare professionals of unlawful inducements to prescribe. However, the prohibition excludes financial trade practices, such as discounts, that were in common use in the industry before 1 January 1993.
The Blue Guide and the ABPI Code clarify or establish additional requirements governing interactions with payers and prescribers. For example, the ABPI Code also governs the offer of inducements to administrative staff and prohibits promotional aids, except for inexpensive items for patient support. The ABPI Code also contains guidelines governing certain interactions between companies and NHS entities.
ii Medical devices
There are no specific UK rules that govern the interaction between medical devices companies and healthcare professionals.
The ABHI Code includes guidelines and a question-and-answer document on the minimum standards device companies should comply with when interacting with healthcare professionals, including payers. The provisions of the ABHI Code are based on the EU code of practice (the Eucomed Code) and therefore the national principles reflect the EU position on ethical communications and interactions with prescribers and payers.
iii Anti-bribery legislation
Most healthcare professionals, administrative staff and payers in the United Kingdom are government officials, employees or contractors. Companies should therefore also be mindful of anti-bribery legislation, such as the UK Bribery Act 2010.26
Special liability or compensation systems
With the exception of a specific vaccine injury compensation scheme and the implementation of EU rules governing compensation for clinical trial related injuries, there are no specific pharmaceutical injury compensation rules in the United Kingdom.
The Vaccine Damage Payments Act 1979 (VDPA)27 provides a statutory compensation scheme for individuals who can demonstrate that they have suffered a severe mental or physical disability caused by a vaccination against a specific disease. The VDPA scheme applies only to vaccinations for specified diseases listed in the VDPA or diseases recommended by the Secretary of State for Health as falling under the scope of the VDPA scheme.28 The diseases are typically those for which vaccination is recommended.
Under the VDPA, individuals must show that they were at least 60 per cent disabled by the vaccination to be entitled to a tax-free payment of £120,000. The scheme is rarely used because of the requirement for 60 per cent disability before a claim can be made and limitation periods under UK law.
ii Medical devices
There is currently no national scheme or system to compensate individuals injured by medical devices.
If and when effective in the UK (pending clarification regarding Brexit), the new Medical Devices Regulation (EU) 2017/745 and In Vitro Diagnostic Medical Devices Regulation (EU) 2017/746 will require the UK to ensure there is a national system in place (e.g., for insurance, guarantees or similar) to compensate anyone who suffers damage from participating in medical device clinical investigations.
Transactional and competition issues
i Competition law
Although the UK has left the EU, the provisions of the UK Competition Act 1998 closely reflect those found in Articles 101 (anticompetitive agreements) and 102 (abuse of dominant market position) of the Treaty on the Functioning of the European Union, many of the considerations and issues outlined in the European Union chapter apply equally in the United Kingdom.
The Competition and Markets Authority (CMA) is the body with responsibility for policing activities that affect trade within the United Kingdom, or regions within the United Kingdom. The CMA has recently been reviewing certain pricing practices in the pharmaceutical industry, particularly the practice of de-branding (or genericising) drugs so that they are no longer subject to price regulation through normal control mechanisms, such as the PPRS. For example, at the end of 2016, the CMA fined pharmaceutical companies Pfizer and Flynn Pharma nearly £90 million for abusing their dominant position by charging excessive prices to the NHS for an anti-epilepsy drug. An appeal was brought to the CAT, which ruled against the CMA's decision. The CMA has received permission to appeal the CAT's decision to the UK Court of Appeal. A number of other investigations relating to excessive and unfair prices are ongoing in the United Kingdom. The CMA has also focused on 'pay-for-delay' agreements, issuing its first pay-for-delay infringement decision on 12 February 2016. It fined GlaxoSmithKline (GSK), Generics UK Limited (GUK), Merck KGaG (GUK's former parent company), Actavis UK Limited, Xellia Pharmaceuticals ApS and Alpharma LLC a total of £45 million for delaying market entry of generic versions of GSK's anti-depressant Seroxat (paroxetine) in the United Kingdom. The decision has been appealed to the UK Competition Appeal Tribunal, which has made a referral to the CJEU. The CMA also investigated a discount scheme that Merck Sharp & Dohme (MSD) operated for its product Remicade, among suggestions that it might have restricted competition for 'biosimilar' versions of infliximab. However, on 14 March 2019, the CMA closed its investigation because MSD's scheme was not likely to have exclusionary effects.
The CMA's predecessor, the Office of Fair Trading (OFT), also brought a number of proceedings against companies in the life sciences sector. For example, the OFT found that Genzyme abused its dominant position by bundling the list price of its drug Cerezyme with the price of home-care services. The OFT imposed directions requiring that the NHS list price for Cerezyme be a stand-alone price for the drug, exclusive of any home-care services, and that the price at which the drug was supplied to third parties be no higher than the stand-alone price for the drug.
Napp Pharmaceuticals and other manufacturers were investigated for fixing the prices of opiate drugs. The OFT found that Napp abused a position of dominance approaching monopoly in the UK market for the supply of morphine tablets by charging excessively low, predatory or exclusionary prices in the hospital segment of the market, and excessively high prices in the community segment of the market. The OFT ordered Napp to cut the price of its morphine products to the community and reduce the difference between community and hospital prices.
ii Transactional issues
The considerations and issues outlined in the European Union chapter apply equally in the United Kingdom.
Brexit is likely to have significant implications for the pharmaceutical and medical devices industries in the United Kingdom and for international companies operating in the United Kingdom. Its impact will very much depend on the form a post-Brexit United Kingdom will take. On 24 December 2020, the EU and the UK agreed to a Trade and Cooperation Agreement (TCA). The TCA sets out the new arrangements for trade of goods, including medicines and vaccines, which allows goods to continue to flow between the EU and the UK. On 29 December 2020, the Council of the EU adopted the decision to sign the TCA and for the TCA to be provisionally applied from 1 January 2021. The UK Parliament approved the European Union (Future Relationship) Bill (which implements the TCA into UK law) and the UK and EU signed the TCA on 30 December 2020. In order for the TCA to be ratified and formally come into effect, the Council of the EU needs to unanimously approve the TCA (i.e., adopt a decision on the conclusion of the TCA) and European Parliament must consent to it.
Some of the key provisions of the TCA that impact on the trade in medicinal products are outlined below.
The TCA provides that goods meeting the relevant 'rules of origin' can be traded between the EU and UK on a tariff and quota free basis. The TCA sets out the rules of origin, which determine the 'economic nationality' of goods, and prevent goods manufactured in third countries but routed through the UK (or EU) from taking advantage of the zero tariffs. The rules of origin are complex and will need to be considered for each product to determine if it can be imported or exported on a tariff free basis. Importers will need to be able to provide a statement of origin made out by the exporter to benefit from the preferential tariff treatment.
ii Product regulation and mutual recognition
As of 1 January 2021, the EU and UK operate separate regulatory regimes. The TCA does not provide for wholesale mutual recognition of the regulatory regimes and so products exported from the UK to the EU and Northern Ireland must comply with the EU's regulatory requirements. In the pharmaceutical context, this has had a number of implications. The TCA contains some limited provisions aimed at preventing and addressing unnecessary technical barriers. Annex 'TBT-2: Medicinal Products' is specifically aimed at (1) facilitating the availability of medicines, (2) setting out the conditions for mutual recognition of GMP inspections and (3) promoting public health and protecting high levels of consumer and environmental protection in respect of medicinal products. It provides for mutual recognition of GMP inspections and official GMP documents (i.e., documents issued by an EU or UK competent authority following an inspection, such as an inspection report or certificate). This provision means that manufacturing facilities do not need to undergo separate UK and EU inspections and there will be ongoing cooperation between the UK and EU. A more expansive mutual recognition agreement would appear to be in both the EU's and the UK's interests, but the issue is very political and closer regulatory alignment between the UK and the EU is unlikely in the short term. With that in mind, we can expect the UK to focus on developing its own independent pharmaceutical and medical device rules, rather than seeking alignment with the EU.
1 Grant Castle and Sarah Cowlishaw are partners at Covington & Burling LLP.
2 The Human Medicines Regulations 2012 (SI 2012/1916), as amended.
3 Directive 2001/83/EC of the European Parliament and of the Council of 6 November 2001 on the Community code relating to medicinal products for human use, as amended.
4 The Medicines Act 1968 (Chapter 67), as amended.
5 The Medical Devices Regulations 2002 (SI 2002/618), as amended.
6 The Active Implantable Medical Devices Directive 90/385/EEC, the Medical Devices Directive 93/42/EEC, and the In Vitro Diagnostic Medical Devices Directive 98/79/EC.
7 Regulation (EU) 2017/745 of the European Parliament and of the Council of 5 April 2017 on medical devices, amending Directive 2001/83/EC, Regulation (EC) No. 178/2002 and Regulation (EC) No. 1223/2009 and repealing Council Directives 90/385/EEC and 93/42/EEC.
8 Regulation (EU) 2017/746 of the European Parliament and of the Council of 5 April 2017 on in vitro diagnostic medical devices and repealing Directive 98/79/EC and Commission Decision 2010/227/EU.
9 The Animals (Scientific Procedures) Act 1986 (Chapter 14), as amended.
10 Directive 2010/63/EU of the European Parliament and of the Council of 22 September 2010 on the protection of animals used for scientific purposes.
11 The Good Laboratory Practice Regulations 1999 (SI 199/3106), as amended.
12 Directive 2004/10/EC of the European Parliament and of the Council of 11 February 2004 on the harmonisation of laws, regulations and administrative provisions relating to the application of the principles of good laboratory practice and the verification of their applications for tests on chemical substances, as amended.
13 The Medicines for Human Use (Clinical Trials) Regulations 2004 (SI 2004/1031), as amended.
14 Directive 2001/20/EC of the European Parliament and of the Council on the approximation of the laws, regulations and administrative provisions of the Member States relating to the implementation of good clinical practice in the conduct of clinical trials on medicinal products for human use, as amended.
15 Commission Directive 2005/28/EC of 8 April 2005 laying down principles and detailed guidelines for good clinical practice as regards investigational medicinal products for human use, as well as the requirements for authorisation of the manufacturing or importation of such products.
16 Regulation (EU) No. 536/2014 of the European Parliament and of the Council of 16 April 2014 on clinical trials on medicinal products for human use, and repealing Directive 2001/20/EC.
17 Regulation (EC) No. 469/2009 of the European Parliament and of the Council of 6 May 2009 concerning the supplementary protection certificate for medicinal products, as amended.
18 The Patents Act 1977 (Chapter 37), as amended.
19 The Misuse of Drugs Act 1971 (Chapter 38), as amended.
20 The Misuse of Drugs Regulations 2001 (SI 2001/3998), as amended.
21 The Consumer Protection Act 1987 (Chapter 43), as amended.
22 Pursuant to the powers conferred upon the Department of Health by Section 262 of the National Health Service Act 2006 (Chapter 41), as amended.
23 Section 31(3) of the Senior Courts Act 1981 (Chapter 54).
24 The Civil Procedure Rules 1998 (SI 1998/3132), Rule 54.5(1).
25 Council of the Civil Service Unions v. Minister for the Civil Service  A.C. 374. The list of grounds for review cited is not exhaustive and may be added to in the future.
26 The Bribery Act 2010 (Chapter 23).
27 The Vaccine Damages Payments Act 1979 (Chapter 17), as amended.
28 Section 2 of the VDPA.