The medical devices industry has not featured largely in the discussions about Brexit, either in the lead up to the referendum on 23 June or in the context of the likely consequences of leaving the EU once the process described by Article 50 of the Treaty on the Functioning of the European Union is complete.
That is not to say, however, that the UK’s departure from the EU may not have a big impact on this industry. The potential impact could be significant, as much of the legislation in this field comes from the EU, either directly or as a result of UK law implementing EU legislation.
The answer to this question lies mainly in the difference between directly effective and indirectly effective EU law. For a detailed summary of what this distinction means in practice in the wider regulatory context, see here.
In summary, where EU law is directly effective, it applies in a Member State only to the extent that the Member State remains a member of the EU. Therefore, if the UK leaves the EU, the provisions of the Treaties and EU Regulations would (in theory, at least) automatically cease to apply. Brexit would likely also lead to repeal of the European Communities Act 1972 (the “1972 Act”), which gives effect to EU law within the UK. The result would be that EU law would cease to apply in the UK.
However, this sort of blanket repeal by the UK Parliament seems unlikely, since it would mean wiping the slate clean across all areas of law currently governed by directly effective EU law. Any trade agreement with the EU reached as part of the UK’s exit negotiations may also be conditional on the UK agreeing to continue to implement directly effective EU rules in some areas including that of medical devices.
This would require the UK Parliament to legislate to save any desirable or necessary aspects of existing EU law, either by reference to specific aspects of EU law, or by restating the relevant rules. If no saving steps were taken, the current laws would simply fall away by default.
For indirectly effective legislation, this will often have been implemented through primary legislation (Acts of Parliament) or secondary legislation (statutory instruments). Primary legislation would remain on the statute book and continue to apply, regardless of the UK’s status within the EU. It would, however, be capable of amendment by the UK Parliament (subject to the terms of any agreement reached with the EU).
The position for rules implemented through secondary legislation would be more complex. Most secondary legislation implementing EU Directives will have been made under section 2 of the 1972 Act and the default rule is that secondary legislation made under a repealed Act of Parliament will itself be repealed unless explicitly retained. The process of considering which pieces of secondary legislation should continue to apply after Brexit will be very time-consuming. The most likely outcome may therefore be to include a general saving provision in any legislation to repeal the 1972 Act for secondary legislation made under it, with specific legislation identified for repeal or amendment as need be. A more detailed review could then be carried out in due course or unless/until there was a need or desire to change the existing rules.
What does this mean for the medical devices sector?
The key pieces of EU legislation in the medical devices industry are the Medical Devices Directive, the Active Implantable Medical Devices Directive and the In Vitro Diagnostic Devices Directive. Between them, these cover all medical equipment and have very broad scope. The Directives are of indirect effect and are implemented in the UK by the Medical Devices Regulations 2002 (notably a piece of secondary legislation)There are also new, as yet unfinalised, drafts of a new Medical Device Regulation and In Vitro Diagnostic Regulation going through the EU legislative process. These may or may not have taken effect before Brexit.
After the UK has left the EU, it seems likely that it would have full control over the regulatory regime that it puts in place for the medical device and pharmacology industries. In theory, it could completely overhaul the existing rules, to make them more or less demanding for the industry. Thus it could choose to make the Medical Devices Regulations 2002 one of the specific pieces of secondary legislation to be repealed as part of the wider repeal of the 1972 Act.
In practice, however, having a different regulatory regime applying only in the UK is unlikely to be good news for the industry, even if the new rules are less stringent than existing EU laws. UK based medical device businesses will want to continue doing business with customers in the EU. In addition medical device companies are often based in one or more EU states and have an international outlook. In order not to close off cross-border trade, UK based businesses in this sector will want and indeed need to continue to meet the relevant EU standards. There are many models too for ensuring these are part of UK law after Brexit. For example Switzerland, Australia and New Zealand all have mutual recognition agreements with the EU which cover conformity requirements. Lobbying of the UK Government as the Brexit negotiations progress will help to ensure that proper account is taken of the impact on the industry of changing the existing regime.
There is, however, the possibility that the same rules will ultimately continue to apply. The Medical Devices Directive, for example, applies to all medical devices sold within the European Economic Area (EEA). Of course we still do not know the ultimate shape of any overall Brexit deal reached with the EU. One of the possible outcomes of the Brexit negotiations is that the UK would leave the EU, but remain part of the EEA. If that were to happen, the UK would require to continue to give effect to existing EU rules on medical devices.