Association of British HealthTech Industries – Written Evidence (UST0017)

 

About ABHI and Reason for Submitting

 

  1. The Association of British HealthTech Industries (ABHI) is the leading health technology industry association in the UK. We are a community of over 280 members, from small UK businesses to large multi-national companies. We champion the use of safe and effective medical devices, diagnostics and digital health technologies. The work of our members improves the health of the nation and the efficiency of the NHS.

 

  1. The health technology (HealthTech) industry makes a vital contribution to economic growth in our country. The industry employs over 127,400 people across 3,860 companies, mostly small and medium sized enterprises (SMEs). Many companies are working closely with universities and research institutions. The industry is generating a turnover of over £24 billion and has achieved employment growth of greater than 5% in recent years. ABHI’s members account for approximately 80% of the value of the sector as measured by sales to the NHS. As the most highly regarded universal healthcare system in the world, the NHS in turn is dependent on technology produced by the industry to enhance the efficiency of services and drive continuous improvement in their delivery. The NHS has grown and developed partly on the basis of the UK’s historic ‘can do’ approach to engineering and problem solving.

 

  1. HealthTech is accordingly an engineering-based industry, characterised by rapid, often iterative product design and development, and a large number of SMEs. It is one of two distinct subsectors of the broader Life Sciences. Future growth and success will mean the HealthTech sector being recognised in its own right. The sector has evidence, regulatory and adoption needs that differ significantly from those of the other, biopharmaceuticals.

 

  1. For the UK HealthTech industry, the US represents largest market in the world, and there is enormous excitement about the opportunities presented by a UK – US FTA. ABHI currently has 30 companies embedded in an innovation accelerator run in conjunction with the Dell Medical School at the University of Texas in Austin. Companies are keen to use Austin as springboard to the wider US market and see the FTA as a positive step.

 

  1. HealthTech is a truly internationally owned industry, although a significant number of major actors have their global headquarters in the US. The majority of these companies have a significant footprint in the UK and make a major contribution to the health and wealth of our country, serving NHS patients and creating jobs in a key strategic sector.

 

  1. ABHI and AdvaMed, our sister trade association in the US have agreed a joint position on the approach to the negotiations and we are pleased that the Department of International Trade’s strategic approach appears to be consistent with our own. Both AdvaMed and ABHI wish to ensure that any US-UK FTA provides uninterrupted benefits to patients and to economic growth within the medical technology sector. We support our respective governments’ effort to achieve this goal and the goal of free, fair and reciprocal trade between the two countries. The US and UK should exempt each other from any and all current or future export restrictions.      

 

 

  1. The advances in the recent US Mexico Canada Agreement (USMCA) provide a strong foundation to build upon in a US-UK Trade Agreement that can set the highest global standards and establish both countries as world leaders in innovation. We offer some commentary below on the provisions we believe are key to achieving that goal: 

 

  1. Good Regulatory Practices: Key to any FTA is regulation, especially for a sector such as HealthTech that is, quite rightly, subject to very high levels of scrutiny Bilateral commitments would follow important principles on how regulations are developed, including open and transparent practices, advance planning, regulatory impact assessments and retrospective reviews. 

 

  1. Medical Device Annex: We favour the inclusion of a medical device annex, consistent with past US FTAs, to ensure consideration of internationally developed guidance, use of risk-based systems, basing approvals solely on safety and effectiveness, and following reasonable timelines for reviews. Another very helpful element would be the mutual recognition of quality management system audits that conform to the Medical Device Single Audit Programme (MDSAP).

 

 

  1.                     Transparency and Procedural Fairness (TPF): We favour the inclusion of an annex on transparency and procedural fairness that would, again, be consistent with prior trade agreements.

 

  1.                     Technical Barriers to Trade: Ensure that standards and technical regulations are developed in a fair and transparent manner and based on international standards, with non-discriminatory conformity assessment.  Furthermore, we would like to see the establishment of an active Technical Barriers to Trade (TBT) Chapter Committee that will discuss bilateral and third-party specific trade concerns, coordination of regional and multilateral activities, regulatory cooperation, and implementing Good Regulatory Practices

 

  1.                     Tariffs: Establish a zero tariff in medical devices between the US and the UK, this would be consistent with arrangements around the world including WTO tariff rules. 

 

  1.                     Customs and Trade Facilitation: The one consistent issue that we hear raised is the unpredictability of US Customs procedures where consignments, hitherto passing unhindered, are unexpectedly detained with little or no explanation and often held up for long periods. The provision of improved and streamlined customs clearance procedures to facilitate trade would, therefore, be very welcome. This might include increased transparency in import and export licensing procedures and ensuring that, to the greatest extent possible, shipments are released immediately after determining compliance with applicable laws and regulations and provide for new disciplines on timing of release, automation, and use of guarantees. There might also be usefully made provision for automation of import, export, and transit processes, including through supply chain integration, reduced import, export, and transit forms, documents, and formalities, enhanced harmonization of customs data requirements and advance rulings regarding the treatment that will be provided to a good at the time of importation

 

  1.                     (Foreign) Investment: Ensure non-discriminatory treatment of foreign investors; prohibiting local content and other performance requirements. 

 

 

  1.                     Small and Medium-sized Enterprises (SMEs): The HealthTech sector is overwhelmingly SME led and we would encourage any measures aimed specifically at addressing and minimize challenges for SMEs when conducting business internationally. 

 

  1.                     Mutual Recognition Agreement (MRA): Our joint position with AdvaMed set an ambitious goal, namely “MHRA would recognise FDA approvals and approve medical technologies for use in the UK upon proof all conditions of FDA approval have been satisfied.  Similarly, FDA would recognise MHRA approvals and approve medical technologies for use in the US upon proof all conditions of MRHA approval have been satisfied.” We recognise that no FTA involves dropping a regulatory system from another jurisdiction into national legislation. However, there is a trend towards the global harmonisation of standards and we need to think about how we regulate technologies such as those based on AI and deep learning that iterate instantaneously with every piece of information that is added to an algorithm. Our regulators, he Medicines and Healthcare Products Regulatory Agency and the Food and Drug Administration are perhaps the preeminent amongst their peers, and we have informed officials that we would welcome a joint committee for the FDA and MHRA to discuss regulatory cooperation

 

 

  1.                     Digital Trade: The digital health market size will grow by $207.34 billion during 2020-2024. There has been an increasing utilisation of advanced devices in healthcare processes during the COVID-19 pandemic and integration of information systems can improve patient experience, disease management, quality of life and reduce healthcare costs.

 

  1.                     A dedicated digital trade provision within the agreement should allow for the transmission of information across borders to maximise patient benefit and facilitate beneficial medical research and clinical trials whilst still protecting personal privacy.

 

  1.                     We would like the FTA to secure commitments not to impose customs duties on digital products and ensure non-discriminatory treatment of digital products transmitted electronically and guarantee that these products will not face government-sanctioned discrimination based on the nationality or territory in which the product is produced.

 

 

  1.                     We believe that there is the opportunity to establish state-of-the-art rules to ensure that neither country imposes measures that restrict cross-border data flows and do not require the use or installation of local computing facilities or mandating the disclosure of computer source code or algorithms.

 

25 June 2020