In this chapter of our Annual Insurance Review 2022, we look at the main developments in 2021 and expected issues in 2022 for life sciences.

Key developments in 2021

Following the Brexit referendum, Life Sciences companies had been waiting to see how far the UK would go in agreeing to follow EU standards concerning medicines. The Brexit Trade and Cooperation Agreement (the TCA) between the EU and UK entered into force on 30 April 2021 and went a long way to addressing those questions.

The TCA acknowledges that Brexit has created barriers to trade but contains provisions to streamline how trade between the EU and UK is conducted in certain products. Medicines are catered for by a specific Annex to the TCA. The Annex contains provisions relating to mutual recognition of Good Manufacturing Practice (GMP), concerning record keeping, documents and inspections. These were welcomed by business as reducing the cost of duplicating the need for evidence of GMP compliance.

What was of more interest was what the UK has agreed to in terms of the future direction of travel for medicines regulation. Under the Annex, the EU and UK have agreed to promote "regulatory approaches that are in line with the relevant international standards". The parties have also agreed to consult each other on proposals to introduce changes to technical regulations and cooperate over developing and implementing internationally agreed standards.

The UK's commitments in the TCA fit with the trend, which existed before Brexit, of countries' regulatory regimes converging. Convergence makes sense for companies as well as patients. Business benefits where similar regulations are in force around the world. Development costs are reduced and more markets become available.

Pharmaceutical companies will look back on 2021 as a welcome moment of clarity after years of uncertainty created by Brexit.

What to look out for in 2022

Reform to medical devices regulation will move up the agenda in 2022. The government has published its response to the recommendations made by the Independent Medicines and Medical Devices Safety Review (chaired by Baroness Cumberlege – reported in last year's Annual Insurance Review). In addition, the Medicines & Healthcare products Regulatory Agency (the MHRA) has consulted on reform to the regulatory regime for medical devices.

The Medicines and Medical Devices Act 2021 allows the government to amend the Medical Devices Regulations 2002. Following the MHRA's consultation, we expect the government to reform the regulatory regime by placing an emphasis on improving patient safety and supporting innovation and growth in the UK's Life Sciences sector.

During 2022, companies and their insurers can expect to see reform that is based upon the "lessons learned" that are set out in Baroness Cumberlege's findings. Amongst those are likely to be the appointment of a Patient Safety Commissioner, to champion patients' interests, and a tightening of requirements to ensure that patients are provided with better information to inform consent before clinicians prescribe medical devices.

The government is keen to ensure that reforms also provide a commercial boost to the sector, by including within the reforms new frameworks for regulating software and artificial intelligence as medical devices, updating classification of products and placing a greater emphasis on 'guidance' than fixed laws, to help the MHRA keep pace with innovation in the sector.