Products | UK Regulatory Outlook January 2024

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General / digital products

General Product Safety Regulation comes into effect

The EU General Product Safety Regulation (EU) 2023/998 (GPSR) came into force on 12 June 2023, with an 18 month implementation period which ends on 13 December 2024.

Businesses should adapt now to what has been described by legislators as "the most important update to EU product safety regulation in a generation".

The GPSR contains sweeping reforms that will significantly change the way that both modern and traditional products are produced, supplied and monitored across the EU. It raises safety and adds to the compliance obligations of all non-food products and the businesses involved in manufacturing and supplying them to end users.

The GPSR updates the definition of a "product" and includes new factors to take into account when assessing safety, so that the EU's product safety regime adequately addresses modern technologies.

The GPSR also makes clear that connected devices are products that fall within its scope and that will be subject to the general safety requirement. In addition, when assessing whether a product is safe, economic operators will have to take into account the effect that other products might have on their product; its cybersecurity features; and any evolving, learning and predictive functionalities of their product.

The legislation also seeks to address the increasing digitalisation of supply chains, in particular the growth of e-commerce, and places a number of obligations on online marketplaces, such as:

• mandatory cooperation with market surveillance authorities if they detect a dangerous product on their platform, including directly contacting affected consumers who bought through their platform in the event of a product recall;
• ensuring there is a single point of contact within the business responsible for product safety;
• requiring contact and traceability information to be displayed alongside product listings along with any relevant product identifiers, warnings or safety information;
• requiring marketplace operators to take steps to identify dangerous products made available on their platforms; and
• requiring non-compliant traders to be suspended from marketplace platforms.

Market surveillance authorities will also be able to order online platforms to remove dangerous products from their platforms or disable access to them altogether.

Cyber Resilience Act

The Cyber Resilience Act (CRA) will introduce cybersecurity requirements for products with digital elements which aim to protect consumers and businesses from products with inadequate security features. The CRA will require manufacturers to ensure that the cybersecurity of their products is in conformity with minimum technical requirements from the design and development phase, and throughout the whole lifecycle of the product. This could include carrying out mandatory security assessments.

Certain types of products with digital elements deemed safety critical will be subject to stricter conformity assessment procedures, reflecting the increased cybersecurity risks they present.

The proposal also introduces transparency requirements, by requiring manufacturers to disclose certain cyber security aspects to consumers.

The CRA will apply to all products that are connected either directly or indirectly to another device or network, with some exceptions such as medical devices, aviation or cars.

When the proposed CRA enters into force, software and products connected to the internet will be required to apply the CE mark to indicate they comply with the applicable standards.

The European Parliament and Council have reached a provisional agreement, but the full text of the CRA is not yet available. The main amendments made to the Commission's initial proposal include a simpler methodology for classifying digital products and the determination of the expected product lifetime by manufacturers. For the expected product lifetime, "a support period of at least five years is indicated, except for those products that are expected to be in use for a shorter period of time."

Work will continue to agree the final text of the CRA, which is expected to enter into force in Q1 or Q2 2024, following which manufacturers will have 36 months to apply the rules. We will provide further updates once we have the final text.

EU Product Liability Directive informally agreed

On 14 December 2023 the EU informally agreed rules updating the existing Product Liability Directive (PLD) on the liability of defective products.

The provisional agreement intends to provide easier access to compensation for consumers who suffer damage from defective products and includes amendments relating to the directive's scope, treatment of psychological damage, and allocation of liability regarding software manufacturers.

The update to the existing product liability framework, dating from 1985, will:

• Update definitions and scope to resolve inconsistences and legal uncertainty, notably regarding the meaning of the term "product". The legislation also amends the scope of the potentially liable parties (to include companies that substantially modify products and providers of software and of digital services).
• Modernise liability rules for digital or connected products. The revised PLD will allow compensation for damages when connected products are made unsafe by software updates, when AI or digital services cause damage, when manufacturers fail to address cybersecurity vulnerabilities and where defective products cause a loss or corruption of data.
• Ensure that there is always a business in the EU (that is, a manufacturer, importer or authorised representative) that can be held liable for a product, even if the product was not purchased in the EU.
• Change rules on disclosure of evidence and the burden of proof. Manufacturers will be required to disclose evidence where a defective product has caused damage, and in complex cases where it is considered excessively difficult for a claimant to prove that a product is defective, the burden of proof will be switched to the defendant entity.
• Consumers will also be able to seek compensation for non-material losses such as medically recognised damage to psychological health.

With a provisional agreement reached, we anticipate a final version of the text to be agreed and published in early 2024 and we will publish further updates accordingly.

General product safety review

The UK government published the Product Safety Review on 2 August 2023: its proposals for reform to the product regulatory framework. The government launched a consultation to gauge the views of stakeholders and to help develop the detail of the reform. This consultation closed on 24 October 2023.

Under the Product Safety Review, the government is seeking to streamline product regulation. The proposed new approach would be risk based, where product safety requirements are determined in relation to the hazard presented by the product. Product-specific regulation will only be used where strictly necessary. This is a significant departure from the EU position.

In addition, the government proposes to introduce the following requirements for digital services and products:

• Voluntary e-labelling – introduction of e-labelling, such as the use of a QR code to display certain markings and compliance information. This proposal is rather limited in scope, applying only to products with integrated screens.
• Online marketplaces must exercise due care and remove unsafe product listings.
• Online marketplaces must have a compliance function established in the UK.
• Online marketplaces will have to collect information about third-party sellers for high-risk products.
• Online marketplaces will be under an obligation to gather their own information about products and sellers which could indicate a product is unsafe.
• Strengthening consumer information online as part of online product listings to support informed purchasing decisions. This may include displaying warnings to consumers, details of the checks carried out by the seller, and a clear and prominent indication of whether the product has been listed by a third-party seller.

The government is currently analysing the feedback it received and we expect further updates in 2024.

New security requirements for products come in from April 2024

Part 1 of The Product Security and Telecommunications Infrastructure Act 2022 (PSTIA) sets out powers for UK government ministers to specify security requirements relating to relevant connectable products (a product which is internet or network connectable).

On 14 September 2023 the Product Security and Telecommunications Infrastructure (Security Requirements for Relevant Connectable Products) Regulations 2023 were introduced under the PSTIA 2022. The security requirements imposed on manufacturers of connectable/digital products include:

• restricting the use of default passwords;
• providing information to consumers on how to report security issues; and
• providing information on minimum periods for which devices will receive security updates.

Businesses may face liability where cybersecurity vulnerabilities lead to the loss or corruption of consumer data.

The PSTIA also imposes obligations on manufacturers, importers and distributors not to make products available in the UK unless they are accompanied by a statement of compliance with applicable security requirements.

These new security requirements will come into force on 29 April 2024 and those who will be obligated under the new regulations need to ensure necessary changes are made to their products in order to comply with the regime ahead of this rapidly approaching deadline.

Autonomous Vehicles Bill

As mentioned in the AI section of the previous Regulatory Outlook, new legislation to provide a regulatory framework for AI-powered autonomous vehicles has been introduced in the UK Parliament.

The Automated Vehicles Bill will create a definition of "self-driving" and will create a rigorous safety and authorisation regime for self-driving vehicles. Vehicles with automated systems will be subject to a technical assessment and approval for the purposes of safety and cybersecurity. Authorisation will also be required for the organisation responsible for how they drive, plus a licensing regime will be introduced for companies responsible for the operation of "no user in charge" (NUiC) vehicles. The bill will remove liability from users of an NUiC vehicle for the driving-related aspects of its use, and it will impose liability on the companies, making them liable for the way their self-driving vehicles behave on the road.

The focus of the legislation, which implements the recommendations of a four-year-long review of the law, is on safety and clarity of responsibility and liability. The Department for Transport has said that it will "ensure in-use compliance with the safety standards" which, if not followed, could lead to fines, requirements to take corrective action, suspension of operations and criminal offences in serious cases.

The bill was read at committee stage in the House of Lords on 10 January 2024. It is in the early stages of its legislative procedure, with it needing to first complete its reading in the Lords before it can be read in the House of Commons. We expect there to be a number of changes made to the legislation and will continue to report on its progress. However, manufacturers of autonomous vehicles need to understand what the intention of the bill is and the obligations it envisages to introduce.  

Regulation prohibiting products made with forced labour on the Union market

Please see Modern Slavery.

Product sustainability

EU institutions reach agreement on the Ecodesign for Sustainable Products Regulation

On 4 December 2023, a provisional agreement was reached on the Ecodesign for Sustainable Products Regulation. Below are some of the key points businesses should be aware of and start preparing for:

• Introduction of digital “product passports” for almost every product placed on the European Union market. These will provide both consumers and repair shops with product information to make it easier for products to be repaired, upgraded and recycled. According to the agreed text, the European Commission will manage a public web portal allowing consumers to search and compare information included in these product passports.
• The regulations introduce a ban on destroying unsold clothing and footwear. This will be applicable two years after the regulation enters into force. The Commission will also be empowered to introduce new bans for to the destruction of other unsold products by delegated acts.
• The new regulation empowers the Commission to adopt specific ecodesign rules for individual product categories to improve their environmental sustainability. These will be introduced via delegated acts, which is a fast-track procedure in which the European Parliament and Council can only reject the proposed rules put forward by the Commission and cannot amend them. The industry, as well as national administrations, will have 18 months after the adoption of the delegated act to adapt to the new the eco-design requirements. However, in some duly justified cases, the Commission can set an earlier date of application.
• Parliament has said that there are products to be addressed in an order of priority, which include iron, steel, aluminium, textiles – notably garments and footwear – furniture, tyres, detergents, paints, lubricants and chemicals.
• In regard to penalties, it will be down to the competent authorities of the Member States to determine which penalties should be imposed. The provisional agreement establishes some harmonisation criteria for penalties in case of non-compliance with the ecodesign requirements. It notes that the penalties shall be "effective, proportionate and dissuasive."
• The provisional agreement aligns the obligations of online marketplaces to the Digital Services Act, in regards to cooperation with Member States' market surveillance authorities. 

The Parliament and Council now need to formally approve the agreement before it can come into force. We anticipate this will happen early in 2024 following which it will then be published in the Official Journal of the European Union and will enter into force 20 days later. 

Specific ecodesign requirements for smartphones and mobile phones are already in place and set to come into force in June 2025, see below for more. 

Start preparing for new ecodesign requirements for smartphones and mobile phones

Last year, a new regulation setting out the ecodesign requirements for smartphones, mobile phones other than smartphones, cordless phones and slate tablets was published in the EU Official Journal. This legislation requires, among other things, that devices are able to be effectively repaired and that spare parts should be available to professional repairers or end users, and it introduces requirements to ensure devices are protected from dust and water and are resistant to accidental drops.

The rules will apply from 20 June 2025 and in 2024 manufacturers should ready themselves for these new requirements.  Examples of practical steps businesses could be taking includes communicating with supply chains regarding the requirement for spare parts and thinking about the design of products and how these might be made more durable or more easily repairable.

Energy labelling of smartphones and slate tablets

As detailed in an earlier Regulatory Outlook, the European Commission proposed new rules relating to the energy labelling of smartphones and tablets which have now been published in the EU Official Journal.

Devices that are put onto the Union market will have to display information on their energy efficiency, battery endurance, protection from dust and water, and resistance to accidental drops, as well as displaying a repairability score. These rules will apply from 20 June 2025. In 2024, manufacturers should ensure they will be ready to comply with the new rules when they come into effect. This will include understanding how to calculate repairability scores and ensuring the correct energy efficiency labels are being applied to products in scope of the new rules.

Right to repair – what's next in 2024?

In March 2023, the European Commission proposed the "Right to Repair" Directive to promote sustainability by increasing the repair and reuse of defective products. It introduces obligations for producers to repair goods and amends consumer rights for defective products. As reported in our previous Regulatory Outlook, both the European Parliament and Council of the EU adopted their respective positions at the end of 2023 and we anticipate an agreement will be reached on the final version of the text in early 2024. 

As a reminder, the directive does two things: it amends the rights which consumers have when they are sold defective products to have them repaired; and it creates a new general obligation on “producers” to repair goods. The directive also introduces new obligations on producers to ensure access to spare parts, repair-related information, and tools for independent repairers, remanufacturers, refurbishers and end-users. 

While obligations under the directive will not take effect until at least 2026, throughout 2024 businesses can start taking steps to prepare for the upcoming changes, including: 

• Communicating with their supply chain about upcoming changes and the need for spare parts for older products.
• Ensuring sufficient stock of spare parts for older models.
• Simplifying product design to facilitate third-party repairs.
• Exploring business model opportunities, such as offering more repairs and refurbishments.

See also our recent Eating Compliance for Breakfast webinar recording and relevant slides on the directive.

Single use plastics - tethered caps become a requirement in EU and new UK bans

From 3 July 2024, caps and lids for single use plastic beverage containers, with a capacity up to 3L, must remain attached during use. These are known as "tethered caps" and under the Single Use Plastic Directive (SUPD), Member States must introduce legislation to ensure that only plastic beverage containers with tethered caps are placed on the market from 3 July 2024. Businesses that are within scope of this requirement must, if they have not already done so, ensure that after 3 July 2024 their bottles placed on the EU market have tethered caps as otherwise they could face enforcement action from Member States.

In the UK, businesses should remember that  a ban on further single-use plastic items in England came into force on 1 October 2023. The regulations ban the supply of single-use plastic cutlery, balloon sticks, and expanded and foamed extruded polystyrene food and drinks containers. The regulation also bans the supply of single-use plastic plates, trays and bowls to the end-user in England. This ban does not apply to the supply of a single-use plastic plate, tray or bowl that is packaging (as defined in regulation 3 of the Packaging (Essential Requirements) Regulations 2015). For example, this would include a bowl pre-filled with food before sale or a bowl filled with food at the counter of a takeaway.

Will Deposit Return Schemes in the UK be delayed further in 2024?

Over the past couple of years there have been numerous issues and delays with the implementation of deposit return schemes (DRS) across the UK. Scotland was set to introduce its DRS in August 2023, but due to the UK government's refusal to agree to a full exclusion from the Internal Market Act (it would not allow glass to be included in the Scottish DRS), the Scottish government announced that its DRS would be delayed until at least October 2025; the same time as  all the other DRS across the UK are due to be implemented.

However, as previously reported, there was recent speculation that the implementation of England, Wales and Northern Ireland DRS would be delayed until 2026; since then, there have not been any further developments. With both Scotland and Wales wanting to include glass within scope of their schemes, we anticipate that in 2024 discussions will continue between the governments to come to an agreement on whether the schemes will differ in scope with some including glass, and others not.

In the EU, DRS are being set up across the union as a result of a combination of the extended producer responsibility obligations under the Packaging and Packaging Waste Directive, the SUPD and other local and national laws. Businesses located within EU Member States must be alert to where DRS are being set up, or are already established, and ensure they are aware of their obligations under these schemes to remain compliant.

Sustainable batteries

The EU Sustainable Batteries Regulation 2023/1542 will start to apply from 18 February 2024 except for certain provisions relating to:

• treatment and recycling, which will continue to apply until 31 December 2025;
• labelling, which will continue to apply until 18 August 2026; and
• the removal of waste batteries and accumulators, which will continue to apply until 18 February 2027.

The new EU regulation introduces a range of new rules for all operators in the supply chain covering every type of battery placed on the EU market, from portable batteries to industrial batteries. New requirements include:

• Implementing battery due diligence policies. These obligations do not apply to those businesses which do not exceed €40 million in the previous financial year.
• To promote the EU's vision of a circular economy and high quality recycling, the regulation ensures the removability and replaceability of portable batteries and LMT batteries (batteries for light means of transport).
• From 18 February 2027, batteries must be marked with a QR code.
• Introduction of battery passports for LMT batteries, electric vehicle batteries and selected industrial batteries to increase traceability of batteries lifecycle.

With the new EU batteries regulation starting to apply in 2024, those businesses affected need to understand what the new rules require of them and the actions they need to take to ensure compliance. It will also be important to have a due diligence system in place that can track not just what is in batteries, but all products used in the supply chain, as more due diligence requirements are being introduced across numerous pieces of EU legislation.

In the UK, the government has now published the UK batteries strategy. Within this it outlines that the Department for Environment, Food and Rural Affairs (Defra) will be publishing a consultation and call for evidence "as early as possible in 2024" which will focus on increasing collection rates for batteries and encouraging best practice in end-of-life management of all battery types. It further adds that Defra will work with the "whole supply chain to consider regulation for the entire eco-system."

The report outlines that responses to the call for evidence suggested establishing battery passports, which would mirror that of the new EU battery regulation, in order to provide better traceability of batteries. However the government has not explicitly said it will introduce battery passports; rather, it  has just stated the following: "Technology will have a key role in facilitating green trade. For example, digital trade will be important, as data on a battery pack’s historical performance and cycles will remove barriers to their efficient repair, reuse, and repurposing by re-manufacturing businesses, reducing environmental damage. In the EU, a Battery Passport will become a mandatory requirement by 2026 to support sustainable battery life cycles, with other regions likely to follow. 

We will continue to strike the right balance, when developing our international trade policy, between attracting domestic value add in the battery supply chain and making it easy and economical for businesses to import critical battery inputs."

With the UK government aware that other regions are likely to follow the EU's decision to implement battery passports, it will be interesting to see whether it decides to follow suit or not, and we expect more information to be published in 2024 following the consultation.

Packaging and Packaging Waste Regulation

At the end of last year, both the European Parliament and the Council of the EU adopted their negotiating positions on the proposal for a regulation on a new packaging and packaging waste regulation.

As detailed in our previous Regulatory Outlook, changes made by the European Parliament included removing the requirement that single-use plastic or composite packaging for foods and beverages filled consumed on premises cannot be used from 1 January 2030. They also introduced provisions banning the use of PFAS and Bisphenol A in food contact packaging. The Council's amendments include, among others, clarifying that packaging is considered recyclable when designed for material recycling and ensuring implementation of DRS in Member States by 2029 for at least 90% annually of single-use plastic bottles and metal beverage containers. Unlike the Parliament, the Council has included the restrictions on single-use plastic packaging for food and beverages.

Reports suggest that the Council's objective is to close negotiations before the end of February 2024. Any provisional agreement reached in trialogues is informal and has therefore to be approved by the formal procedures applicable to the European Parliament and the Council under the Ordinary Legislative Procedure. We expect the institutions to reach an agreement on the final version of the regulation after this. Although we are still waiting for the final version, the regulation will introduce a vast range of new obligations which businesses should start to understand the impact of on them.

Will the EU impose further restrictions on endocrine disruptors?

The EU's Chemicals Strategy for Sustainability calls for "consolidation and simplification" of the regulatory framework in regard to endocrine disruptors. In 2023, as part of this, we saw the European Commission adopt new measures to help push forward that aim, in particular with regard to toy safety whereby the adopted proposal for a Regulation of the European Parliament and of the Council on the safety of toys introduces new requirements to prohibit the use of chemicals that are endocrine disruptors. We anticipate that in 2024, in order to fulfil the objective of the chemical strategy, the Commission will take further steps to prohibit the use of the endocrine disruptors in other products, in addition to toys.

PFAS in the UK and the EU

Over the past year, both the UK and the EU have been looking into restricting PFAS (poly and per- fluoroalkyl substances).

In early 2023, the  European Chemicals Agency (ECHA) announced details of a proposal which would restrict around 10,000 PFAS. The restriction will be on the manufacture, placing on the market and use of PFAS. A consultation was launched on the proposal and closed in September 2023. We expect the EU to provide further updates in 2024.

In the UK, as previously reported, in 2023 the Health and Safety Executive (HSE) published a Regulatory Management Option Analysis (RMOA). The HSE outlined that next steps/recommendations would be set out in the UK REACH Work Programme for 2023-2024, which we are currently still awaiting. We are also currently waiting on the government's UK Chemicals Strategy, which is due to be published early 2024. Therefore we anticipate that the government's chemical strategy will shed light on what steps it intends to take to restrict PFAS, which will be provided by the HSE's work programme.

The difference between the UK and EU's approach is that the EU's approach looks to regulate PFAS as a group, whereas the UK does not yet have any plans for such broad scope regulation.

Further, in the HSE report, the UK has adopted a narrower definition of PFAS than the EU used within its REACH restriction proposals. As a result, the HSE report has hundreds of substances in scope, whereas the number of chemicals in scope in the EU's proposal was in the tens of thousands. With both the UK and EU expecting to take further steps in 2024, businesses should keep on top of these developments as well as ensuring they understand the different requirements that could be introduced in the EU and UK.

If you missed our recent Eating Compliance for Breakfast on PFAS, you can find the recording here and the slides here.

UK EPR – remember to collect and report your data!

As reported in an earlier Regulatory Outlook, the extended producer responsibility (EPR) scheme for packaging has been pushed back to October 2025. In 2024 we therefore anticipate the government to provide further information on the scheme, especially now that the EPR scheme administrator has been appointed. However, with a general election on the cards for 2024, it would not be surprising if EPR is pushed down the agenda. 

In 2024, businesses within scope of the EPR must continue to collect and report their data; the government's guidance outlines who is in scope and when the reporting deadlines are. For large organisations in England, the first reporting period was on 1 October 2023, for the period January to June 2023. The next reporting deadline for large organisations is 1 April 2024 for data collected for July to December 2023. The government has stated that no enforcement action will be taken for late submission if businesses data is submitted by 31 May 2024, but every effort should be made to submit this data on time. 

EU deforestation-free products regulation set to come into force

Please see ESG.

Lifesciences and healthcare products

Consultation outcome on GB Veterinary Medicines Regulations to be published

The consultation on the Veterinary Medicines Regulations 2013 closed on 31 March 2023. While an update was provided in June 2023 that the consultation report was due to be released in September 2023, it has still not yet been published. We expect that it will be published in early 2024 and we will be keen to see which of the proposals will be taken forward.

In the meantime, manufacturers of veterinary medicines should keep an eye out on any updates which may lead to new requirements (such as more onerous record keeping for traceability purposes) and also further opportunities to innovate (such as the potential of using pictograms/QR codes on product labelling). For more, please see our Insight.

UK veterinary services under CMA scrutiny – next steps of the investigation

We previously reported that the Competition and Markets Authority (CMA) launched an investigation into the provision of veterinary services in the UK for household pets, including pricing, how prescriptions and medications are sold, chain practices, and out-of-hours options. We understand that the CMA will provide an update on the next steps of its investigation in 2024.

Companies that provide veterinary services should keep an eye on the update, and also be particularly mindful for their commercial strategies for 2024 (and how this may affect end consumers) in light of the CMA's increased interest and scrutiny in this area.  

A 'smokefree generation' and more restrictions on vapes in the UK?

It has been clear that the current government is keen to cut down on the number of people who use cigarettes and vapes, particularly the younger generation. It was announced, in October 2023, that the government plans to introduce a new law to prevent anyone born on or after 1 January 2009 from being legally sold tobacco products.

The government has also recognised the importance of balancing the need to protect children (who are increasingly using vapes) and supporting adult smokers who use vapes as a tool to quit smoking. As a result, the government held a consultation on proposed restrictions in relation to youth vaping, which closed on 6 December 2023. We expect there to be updates and proposals regarding laws and guidance relating to vaping and smoking products to be announced in 2024.

Tobacco manufacturers should keep an eye on the consultation responses, and also remain vigilant as to the use of their products by youths. There is a clear trend showing a clampdown on underage vaping, and tobacco manufacturers should reflect on their current practices and take this time to consider any opportunities to ensure that their products are targeted to (and only used by) adults. Based on the consultation proposals, this could include measures such as restricting the flavours and descriptions of vapes, as well as the point-of-sale displays in retail outlets so that they do not appeal to children.

UK's new International Recognition Procedure goes live

The Medicines and Healthcare products Regulatory Agency (MHRA) has announced that as of 1 January 2024, the EC Decision Reliance Procedure (ECDRP) will be replaced by the new International Recognition procedure (IRP). 

The IRP aims to take into account the expertise and decision-making of trusted regulatory partners for the benefit of UK patients, meaning that medicinal products that are successfully placed on the market in certain trusted jurisdictions will then be able to access the UK market more quickly. The trusted "reference regulator" countries are: Australia, Canada, Switzerland, Singapore, Japan, the US and the EU.

Pharmaceutical manufacturers should seriously consider the IRP as part of their wider commercial strategy plans in 2024, particularly where they have global portfolios and may have identified any initial jurisdictions in which to launch their product, before applying for equivalent recognition to get their product onto the UK market. However, care should also be taken of the two different recognition routes under IRP (and the varying associated timelines) and that despite the intentions of the IRP, the MHRA still maintains sovereignty and retains the right to reject applications where the evidence provided is insufficiently robust.

The MHRA have an online eligibility checker tool which can be accessed here and guidance on IRP can be found here. For businesses looking to place new medicines on the UK market in 2024, the tool will provide helpful guidance as to what route they will need to follow in order to do so.

EU orphan drugs reform

In April 2023, the European Commission published its proposal to introduce a new regulation to govern orphan medicines, which will repeal previous orphan medicine regulations. The aim of the reform is to "ensure that patients across the EU have timely and equitable access to medicine". At the end of 2023, the proposal has been considered in the first reading by the Council of the European Union, we expect this to move up to be considered by the European Parliament in 2024.

For pharmaceutical manufacturers intending to produce orphan drugs, or hoping to produce generics or biosimilars based on the originator medicine, we suggest keeping an eye on the orphan drugs reform taking place in the EU and considering how the new proposals may affect aspects of the product journey such as market exclusivity periods and the timings around when an application for market authorisation can be submitted for similar products.

MHRA AI regulatory sandbox ('AI-Airlock') to launch April 2024

As reported in our previous Regulatory Outlook, the MHRA has published plans to launch a "regulatory sandbox", known as the AI-Airlock in April 2024. It aims to provide a regulator-monitored virtual area for developers to generate robust evidence for their advanced technologies. With the date now becoming more imminent, we expect a further update from the MHRA shortly to provide further information on how manufacturers will be able to take advantage of the sandbox.

For manufacturers who are hoping to develop AI healthcare, this appears to be an exciting opportunity to better understand the real-word viability of their devices, and also benefit from the UK's "world-leading mechanism to assist in safe development and deployment of software and AI medical devices". With various international recognition procedures, manufacturers may also wish to consider the UK as a market to streamline their route to market for AI medical devices.

New voluntary scheme and statutory scheme for branded medicines comes into force

The 2019 voluntary scheme for branded medicines pricing and access (VPAS) expired at the end of 2023, and has now been replaced by the new voluntary scheme for branded medicines, pricing, access and growth (VPAG). Based on the published text (outlined in the summary heads of agreement released last November), there will be several significant changes introduced in the new scheme – such as a new method of calculating rebates based on whether a medicine is classified as a "newer" or "older" medicine.  There are also potentially further changes possible, with reviews due to take place in autumn 2025 and spring 2027 by the Department of Health and Social Care (DHSC), NHS England and the Association of the British Pharmaceutical Industry (ABPI).

Separately, the statutory scheme for branded medicines is also due to be further updated in early 2024, to "maintain equivalence with the final version of VPAG". More recently, the government published the consultation outcome into the review of the statutory scheme with key points raised that the government intends to:

• continue to operate the statutory scheme in a way that is "broadly commercially equivalent" to the voluntary scheme;
• set amended payment percentages for 2024 to 2026 based on an allowed growth rate that has been increased to 2%;
• implement an exemption from payment for medicines containing a new active substance for 36 months after marketing authorisation in the statutory scheme;
• include exemptions from payment for exceptional central procurements and centrally procured vaccines;
• not implement the proposals for a life cycle adjustment in the statutory scheme on 1 January 2024. The response notes that the government intends to consult on alternative proposals aligned to those agreed in the 2024 VPAG for setting statutory scheme payment percentages in a way that differentiates between medicines at different stages in the product life cycle; and
• apply the statutory scheme to all biological medicines, whether or not they are branded, in order to provide clarity as to whether the statutory scheme applies to all biological medicines.

Pharmaceutical companies hoping to sell medicines to the UK NHS should closely review the final text versions of VPAG and the statutory scheme (along with any further amendments in early 2024) to understand the financial consequences for joining each of the schemes.

Medical device reform in the UK

The MHRA ran a consultation on the future of medical device regulations in 2021, in which the government responded outlining its intention to amend the regulatory framework for medical devices. On 9 January, the MHRA set out its 'roadmap' for the implementation of new regulations which are "designed to deliver greater international harmonisation, with more patient-centred, proportionate requirements for medical devices which are responsive to technological advances". The timeline outlines the key action points taken between 2021 and 2023, as well as numerous stakeholder discussions that will take place throughout 2024, with plans for priority measures to be in place this year and future core regulations to be introduced during 2025.  

ABPI and PMCPA consult on changes to the pharmaceutical industry code of practice

The Association of the British Pharmaceutical Industry (ABPI) and the Prescription Medicines Code of Practice Authority (PMCPA) have launched a consultation on the ABPI Code of Practice for the pharmaceutical industry. The consultation is seeking views on proposed changes to the code such as including the use of QR codes to access "Prescribing Information" from printed materials, as well as changes to the constitution and procedure of the PMCPA, including changes to the complaints process.

Dr Amit Aggarwal, Executive Director of Medical Affairs at the ABPI said: “This consultation aims to tighten up and simplify some elements of the Code itself, while strengthening the powers of the PMCPA as a robust and efficient regulator. The use of QR codes on printed materials as an option to access prescribing information is an example of the continuous process of modernising the Code, which will give healthcare professionals greater ease of reference to essential and up-to-date information for their work."

The consultation closes 29 February, after which the 2024 Code will be published in Q2 2024 to come into force three months after publication date. The current 2021 ABPI Code of Practice will remain in force until then. Manufacturers should keep an eye on any updates and be prepared to update their 2024 strategy and relevant practices to ensure compliance with the latest industry standards where possible.

CMA to support pharmaceutical companies working together on access to combination therapies

The UK Competition and Markets Authority (CMA) has published a statement confirming that it will support pharmaceutical companies working together specifically on making combination therapies available to NHS patients in the UK.

The statement clarifies that it will not prioritise enforcement action against medicine manufacturers when the parties have implemented a specific "negotiation framework" and are engaging in good faith. The APHI has welcomed this statement stating: "It is a major step forward for the many patients who need and deserve access to these ground-breaking therapies. It is a world-first and a great example of the UK setting the standard for other health systems faced with similar challenges. The ABPI will continue to work with NICE and NHS England on further steps to support access to combination therapies.”

For those companies working together to bring to market combination therapies, this statement that the CMA will not be taking action against these practices will be welcomed. At the same time, companies should be mindful of the statement and the conditions that are required to avoid investigation by the CMA.