Rules on Ownership of Medicinal Product stock distributed in Great Britain

The Brexit transition period ended in 2020, and from 01 January 2021 the import of medicinal products to Great Britain from the EU required pharmaceutical suppliers to employ the services of a Responsible Person for Import or RPi.   Prior to January 2021, it was possible for WDA holders in the EU to supply hospitals and Pharmacies in GB directly from their European distribution hubs. This situation has now substantially changed with the requirement for batches of medicinal products to be received by a WDA holder in the UK in order for the RPi to complete import checks and formally release the batch onto the GB market.

At Pharmalex, we have worked with a number of our European clients who have approached this change in different ways. These approaches have included setting up new wholesale customers in GB to take over distribution of their products, arranging for their existing third-party logistics entity to complete the RPi checks on their behalf and expanding their GB operations into a wholesaling operation with a WDA licence employing an RPi or the services of a contract RPi.  However, what has been somewhat unclear in all the reviews of the guidance in late 2020 is the implications on ownership or title of stock of medicinal products.

On 31 December 2020, the MHRA updated their guidance on “Sourcing medicines for the Great Britain market from an approved country for import or Northern Ireland”.  This guidance contained a crucial section:

“An EEA manufacturer or wholesaler may only supply a licensed medicine to a wholesaler in Great Britain. The sale and supply to an authorised person (hospital, doctor or retailer) must be from a UK licensed wholesaler. If you did not hold a wholesale dealer’s licence before 1 January 2021, in order to wholesale deal medicine, you will need to apply for a wholesale dealer’ licence.”

The critical text here in the second sentence is that both sale and supply must be from a UK based wholesaler.  It has now become apparent that this means, in practical terms, that EU based pharmaceutical companies can no longer have stock held on consignment by their UK based contract 3PL to invoice on their behalf.  They are now expected to either sell the stock to a GB wholesaler or possess a GB based WDA and fully transfer ownership of stock to the GB entity at the point of import into GB.

For many EU based WDA holders who had been selling directly from their EU operational hubs to Hospitals and Pharmacy chains across GB, this now means that they require a GB based WDA holder to clear customs and complete the regulatory import checks and they also have to transfer ownership of the stock to that entity, or another GB based wholesaler, before the stock can be sold on to hospitals or pharmacies.

Many organisations in the EU/EEA chose to adopt a ‘wait-and-see’ approach to Brexit and did not act on transferring title of stock to their GB entities.  If you are an EU/EEA based manufacturer or wholesaler who is now managing RPi importation through a UK 3PL service provider or a UK subsidiary WDA holder, urgent action may be required.   It may be critical to revisit your company’s Brexit contingency planning and ensure that you continue to comply with these revised requirements in the import guidance, i.e. that your organisation is completing both sale and supply from a UK licenced wholesaler.

Be assured that Pharmalex can help; if you are unsure of your responsibilities with regard to Brexit or you require confirmation that your organisation is complying with the new post transition requirements that occurred on 01 January 2021, please do not hesitate to contact us.