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Veterinary Medicines and Animals and Animal Products (Examination of Residues and Maximum Residue Limits) (Amendment etc.) (EU Exit) Regulations 2019
27 February 2019
Volume 796

Considered in Grand Committee

Moved by

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That the Grand Committee do consider the Veterinary Medicines and Animals and Animal Products (Examination of Residues and Maximum Residue Limits) (Amendment etc.) (EU Exit) Regulations 2019.

Relevant document: 14th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee A)

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My Lords, veterinary medicines are tightly regulated here in the United Kingdom and in Europe. They are essential for the treatment of animals and ensuring animal welfare but can also present a risk to human health and the environment. If misused, they can affect human health directly or may enter the natural environment, causing long-lasting damage. The UK’s existing Veterinary Medicines Regulations 2013 set out the requirements on the manufacture, authorisation, supply, possession and administration of veterinary medicines in the UK.

Separately, the surveillance of residues from veterinary medicines in animal produce is an important safeguard to provide assurance that any meat, eggs or milk consumed is free from harmful residues of medicines used in animals. The Animals and Animal Products (Examination for Residues and Maximum Residue Limits) (England and Scotland) Regulations 2015 provide for a surveillance programme for residues in England and Scotland. These regulations adopt the level of permissible residues set by the EU and also prohibit the use of certain substances as growth promoters. As residues surveillance is a devolved matter, there is equivalent secondary legislation covering Wales and Northern Ireland.

The Government share the British public’s high regard for animal welfare and the need for safe and effective veterinary medicines. These regulations address technical deficiencies in our veterinary medicines legislation to ensure that it continues to operate effectively when we leave. They will ensure that the legal framework continues to provide an effective regime for the regulation of veterinary medicines through which we can safeguard the well-being of our animals. The instrument does not diminish the high standards in the established veterinary medicines and residues surveillance regimes. I emphasise that the amendments in this instrument are to ensure operability and that the high safety standards we have in place will continue. I particularly emphasise, given the reference in the Explanatory Memorandum to some concerns, that these regulations—I repeat this on the record—are for nothing other than to retain the high safety standards that we all desire and must have in this country.

The UK’s regulator, the Veterinary Medicines Directorate, is already established as one of the leading regulators in Europe for veterinary medicines and will continue to lead on the international stage. The current legislation is designed to work in the context of EU membership. Some elements will therefore not work sensibly in a national context. Part 3 of this instrument amends the existing national legislation. For example, the mutual recognition provisions for medicine approvals between member states are no longer relevant. Similarly, approvals of generic marketing authorisations rely on the sharing of information between member states, and cannot continue to operate in the same way. Minor corrections are also made to the text to address references concerning EU membership which are no longer accurate or appropriate.

The instrument introduces a change in relation to the location of holders of marketing authorisations for veterinary medicines, which is needed as a consequence of leaving. Marketing authorisation holders must be established in the UK. As set out in the Explanatory Memorandum, this may result in a small increase in cost to those marketing authorisation holders currently based outside the United Kingdom. This is necessary to ensure that there are appropriate regulatory controls to ensure full compliance with UK law and standards, and that all marketing authorisation holders are treated equally. It is vital that marketing authorisation holders can be held accountable for their products, and these regulations provide for that.

Part 4 of the regulations sets out the necessary amendments to retained EU regulations. Regulation 470/09 sets out how maximum residue limits for substances used as veterinary medicines are set. MRLs are the maximum safe limit of a particular substance in produce from animals. These limits are used to establish withdrawal periods—the period that must elapse after the last administration of a medicine before produce from that animal may enter the food chain.

The Government have proactively engaged with the animal health industry to ensure that the regulatory regime continues to function effectively after exit day. I have met the veterinary pharmaceutical industry association, the National Office of Animal Health, on a number of occasions as part of our extensive engagement. Officials from the Veterinary Medicines Directorate continue to hold regular meetings with key industry representatives. Industry has welcomed our proactive and continued engagement with them. We have also worked comprehensively with the devolved Administrations on this instrument where it relates to devolved matters, and they have given their consent to this instrument being made on a UK-wide basis.

The Government are committed to ensuring continued levels of protection for human and animal health, as well as making it straightforward for businesses to put products on the market; and ensuring UK businesses and individuals can continue to access a range of veterinary medicines. This instrument will help to maintain the established veterinary medicines and residues surveillance regimes, and ensure that an effective regulatory framework for veterinary medicines is in place. It remedies deficiencies in the law to enable that operability and I beg to move.

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My Lords, I thank the Minister for his explicit and clear explanation of these regulations. I have very little quibble with them, but just a few points. As he emphasised, a significant change is to require the holders of market authorisations to be registered in the UK. This will impose a small burden. About £100 was estimated in the Explanatory Memorandum, which seems extremely reasonable and justified, because this measure is required to bring the market authorisation holders under UK legal jurisdiction. That is clearly extremely important to protect animal health and public safety.

The monitoring of residues, to which the Minister referred, is extremely important. As he mentioned, it is devolved. Can he tell us which processes are, or will be, in place between the devolved authorities in the UK to ensure that we maintain consistent levels and standards, so as not unduly to interfere with internal trade within the UK? I was going to ask the Minister about the concerns raised by your Lordships’ Secondary Legislation Scrutiny Committee in relation to the lowering of standards, but I accept his assurance that those concerns are unfounded.

Finally, I make a plea to the Minister, which I am sure he will fully understand. These regulations will significantly increase workload for the regulatory departments in our pharmaceutical companies, which form an important industry in the UK. I ask him to ensure that at least some degree of understanding and flexibility applies to the government agencies responsible for interacting with those companies. All in all, however, this is a very satisfactory SI.

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I congratulate my noble friend the Minister on introducing this SI. I am not a vet but an associate fellow of the British Veterinary Association, and I am grateful for the briefing it has given me for today’s purposes. I want to press the Minister on the question of the potential cost. Historic and current approvals will obviously remain in place, but can he put my mind at rest on what the future cost will be? Can he also assure the Committee that the SI before us this afternoon will not potentially raise a barrier to trade?

In particular, I understand that the previous harmonisation and mutual recognition of products will not necessarily go forward. It is good that we are being nice about products coming this way, but will the Minister ensure that those going the other way will be equally assured? I understand that reciprocity will not be guaranteed in the event of no deal. I do not disapprove of the SI; I understand the absolute need for it, and welcome it. But what is happening to ensure reciprocity going forward?

Can my noble friend also give a hint to the Committee—this could be in the SI; I might have missed it—of what the cost would be of placing a veterinary product from the UK across the EU? That would be most helpful to know, as I understand that there will potentially be additional costs going forward. Could this lead to some companies, which might otherwise have chosen to establish themselves in the UK, choosing not to do so? This is one of the concerns that was expressed by the Secondary Legislation Scrutiny Committee Sub-Committee A, as it could mean a reduction in the number of veterinary medicines being available after exit. I assume this is something that the SI deals with. There are two sides to the coin. One is that a new product is going to cost more to be placed in another EU member state, or potentially an EEA country, even in spite of this. The flip side is that a company that may have wished to place itself in the UK may have second thoughts about doing so. Will this cover the situation if there is no deal, as the statutory instrument before us will presumably replace what would have been a transition period?

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My Lords, as a tenderfoot in no-deal SIs, I seem to have landed on my feet in a comparatively soft zone. No one I have received briefing from thinks that this, unto itself, is a bad thing. That seems to be the general consensus. Although there are going to be small rising costs—and as we have just heard, there is always the danger that we will be going into a world that is not as good for trade as Europe as it was before—that probably comes with the territory. We will have to accept that, if this SI comes into being; that is the reality of what we have here.

My only question is—and the briefest of thumbnail sketches is all I would require—what would be the alternative? Some idea about what might be happening or what might be the other way might put in context whether this is necessary at the moment. Most of the time, everybody says it is good, but if we do not do this, what else would be available? We had a brief look at the briefing meeting which the noble Lord very kindly arranged. A little hint at what else is available might let us stare a little closer into this pool of reality that comes with these documents.

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My Lords, I declare an interest as I have horses. One issue of particular concern relates to the deletion of the requirement to retest horses entering the UK for disease when initial test results are inconclusive. The omission of this requirement suggests diseased horses will potentially be allowed to enter the UK without adequate care or protection for other animals and human health after the UK leaves the EU. Does this mean that we—

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May I help the noble Baroness? I have a slight feeling that this might be in tune with the next SI, on the animal products and arrangements, rather than veterinary medicines, but I may have got that wrong.

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I had 2019.

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They are all 2019.

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Just to make it easy.

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This may well come into the trade and animal-related products SI.

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I will repeat it then.

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Thank you for the forward notice.

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My Lords, I thank the Minister for his introduction to this SI and his helpful briefing beforehand and all noble Lords who have spoken. As the EM set out, this is an important issue for animal welfare, the safety of treated animals, the people handling the medicines, consumers and the environment. It is important that we get the regulation of veterinary medicines right for the future. We know, for example, that the overuse of antibiotics in animals is contributing to a developing public health crisis, as resistance and immunity to their impact becomes more widespread. It is very important that we are able to continue to harness the best and latest scientific advice to control the use of veterinary medicines.

The EM also made it clear that a partner SI will set the future maximum residue limits. Unfortunately we do not have before us today. We have debated why that happens on many occasions, and I will not repeat those arguments.

Both the Lords and Commons Scrutiny Committees recommended that this SI should be upgraded from a negative to an affirmative procedure. They did so for two reasons, which I would like to explore in more detail. First, they had concerns about the new requirement on holders of marketing authorisations for veterinary medicines to be based in the UK. The Minister has already explained in a little detail why this is necessary. The Explanatory Memorandum states that 90 companies would have to establish a UK base. Can the Minister say whether we have concerns about the quality of any authorisations currently being carried out by these 90 companies? The cost of registering a UK base seems insignificant, but, as the noble Baroness, Lady McIntosh, and others have said, the Scrutiny Committees were concerned that some of the companies would not simply bother to register and would therefore not be able to authorise EU veterinary products being imported to the UK. Can the Minister explain the consequences for animal health if this were to happen? Could there be a shortage of products? Has any risk assessment been carried out to ensure that this will not be the case?

Can the Minister also respond to concerns that if we banned products from EU companies that did not have a base in the UK, the EU could retaliate and ban UK-authorised products in the EU? Can he clarify whether products authorised by UK marketing companies will still be valid in the EU after exit? This is particularly concerning given that mutual batch testing would cease after Brexit. This would mean that additional checks for veterinary medicines manufactured in the UK and exported to the EU would have to apply. Is any dialogue taking place to ensure that these trade issues are resolved? Has an assessment of the risks to UK research and business been carried out?

The EM gives the reason for requiring a UK base as being to facilitate enforcement, as the Minister said. It goes on to say:

“The ability to prosecute a holder in appropriate circumstances is an important deterrent to bad practice”.

Can the Minister explain what these bad practice risks are? Which UK agency would prosecute the companies if bad practice continued to exist? Have there been any prosecutions in recent memory? I am trying to get to the bottom of where that concern really lies.

The Scrutiny Committee also raised concerns about the potential lowering of safety standards in respect of certain amendments. Clearly this is a scenario we would want to avoid at all costs. The SI appears to retain many of the standards currently in operation within the EU. Can the Minister confirm that we will comply with EU regulatory standards or standards at least as stringent as those currently in place?

We will no longer have the checks and balances on standards which the EU offers. Responsibility for some decisions will now be delegated to the Secretary of State. For example, under Paragraph 22, the veterinary medicines regulations are amended to say that before placing an immunological product on the market, written approval must be sought from the Secretary of State. Can the Minister clarify which agency or department will be authorised to give this approval and what scientific evidence will be required?

With regard to applications for new or amended residue limits, page 9 refers to an appropriate authority producing an assessment report with a risk assessment. In this case the appropriate authority is again defined as the Secretary of State, so will he, in effect, be making a recommendation to himself? Can the Minister clarify how the responsibilities will be defined so that there is a separate assessment and decision-making function?

There are several references to exporting countries having,

“equivalent medicines regulation standards to those of the United Kingdom”.

Can the Minister clarify who will determine whether those standards are equivalent?

For the avoidance of doubt, can the Minister state categorically that there is nothing in this SI that would enable the USA to start exporting hormone-injected beef to the UK? He will know that this is a matter of great concern to the British public. I look forward to his response.

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I am most grateful to all noble Lords for their contributions. We will consider another SI which is yet to clear JCSI. I want to put on record that I am fully seized of the point that statutory instruments should be grouped together wherever possible, appropriate and helpful to your Lordships in scrutinising regulations.

Although I mentioned it in my opening remarks deliberately, I emphasise again that this SI is absolutely about continuing existing high standards for veterinary medicines and ensuring that UK businesses and individuals can continue to access as wide a range of veterinary medicines as possible. I specifically reassure the noble Baroness, Lady Jones of Whitchurch, that there is no way that this statutory instrument can do anything to unpick the existing ban on hormone growth promoters, as it is already in UK law. I repeat emphatically that this is not the purpose or intent of these regulations.

A number of your Lordships mentioned the requirement for marketing authorisation holders to be established in the UK, which will result in a small additional cost—there are references to £100 and a further annual fee of £40. We believe it is necessary to ensure the safety and effectiveness of UK medicines and that all companies can be held accountable for the medicines they market. We have endeavoured to make this process as simple and robust as possible. The cost of establishing a UK presence is small compared with the overall cost of developing a medicine and bringing it to market. We do not believe that companies will be discouraged from bringing their products to the UK market. All new companies wishing to market products in the UK may continue to manufacture medicines in Europe and elsewhere, but as a company they must be established here in the UK.

The noble Lord, Lord Addington, is right that we considered alternatives when preparing this in order to provide the same assurance that the products in question are safe and effective. Final manufacturing and product surveillance assurance processes would have been required to take place in the UK under that alternative. That would mean moving manufacturing processes and staff and would certainly have resulted in significant increases in costs to industry. This is why we chose the option that we believe provides the necessary assurances that we would require with the least impact on and cost to business. As the noble Lord, Lord Trees, said, it is a reasonable and proportionate response to what these instruments intended.

My noble friend Lady McIntosh raised the issue of UK companies wishing to market products in the EU. At this stage, the European Medicines Agency has been clear on its expectations. Marketing authorisation holders, final manufacturing certification and post-authorisation surveillance must all be located in the EU. As I have said, our approach has been somewhat different. We have intentionally intended to be pragmatic. We think that is the right way forward. On whether there will be any changes in the arrangements, this is the position as we understand it at the moment. I think this is an area where continuing collaboration is important.

I profoundly agree with the noble Baroness, Lady Jones of Whitchurch, about the imperative of reducing the use of antibiotics in livestock. We must reduce it in humans too. In livestock, there has been a 40% reduction already. We need to go further for all the reasons we understand about animal and human resistance.

On working with industry, there has been considerable engagement with NOAH and the Veterinary Pharmacy Association, and officials from the Veterinary Medicines Directorate are having continuous meetings with key industry representatives. As I have said, industry representatives have said to me that they welcome this continued and proactive engagement.

In response to the noble Baroness, Lady Jones of Whitchurch, I have had no indication from the industry that companies have decided not to continue marketing products in the UK. Indeed, we are a nation with considerable livestock and animal interests as animal lovers. The UK animal medicines market is worth in excess of £645 million per annum. The additional costs which will result from this regulation have been acknowledged by many of those I have spoken to as being very small compared with the extremely high costs of developing and marketing veterinary medicines. The whole point of this statutory instrument is to ensure that this country has the appropriate medicines we need to look after animals.

Bad practice was another point raised by the noble Baroness, Lady Jones of Whitchurch. Broadly speaking, it means operating outside the scope of the regulatory regime. In this context, that would include failing to report adverse reactions to the VMD or changing a product specification without going through the necessary regulatory approvals. I have not been made aware of any examples of such practices, but if I do hear of any, I will write to the noble Baroness and send a copy to all noble Lords who have spoken in the debate. This is an important feature of the necessary regulatory approvals. We should ensure at every turn that if there are adverse reactions or if there is a change in a product specification, the VMD must be informed.

My noble friend Lady McIntosh asked about the cost of placing products in the EU. As I understand it, the reality is that costs will vary across member states. Due to the complexities of the products, member states are able to set their own fees depending on the number of countries involved and the costs incurred by the individual assessment authorities. I cannot give precise figures to assist my noble friend but, again, if I have any further detail, I will be in contact.

This is about bringing these matters back into the national context and ensuring that there is confidence that it is done robustly. The noble Baroness, Lady Jones of Whitchurch, asked about the scrutiny arrangements of Ministers. The Veterinary Medicines Directorate is the UK’s competent authority for veterinary medicines and authorises medicines on behalf of the Secretary of State. There is an established statutory appeal mechanism set out in the Veterinary Medicines Regulations 2013 for anyone who is aggrieved about a decision made under those regulations. This instrument does nothing to reduce or diminish those protections. Regulation 28 of the 2013 regulations provides for an appeal to be made to the Veterinary Products Committee while Regulation 29 provides for an appeal to a person appointed by the Secretary of State to hear the appeal. Once these routes of appeal have been exhausted, the applicant may bring forward judicial review proceedings in respect of the Secretary of State’s final decision.

It is important to emphasise that the VMD is recognised across the EU as having considerable experience and a very strong scientific standing. It is acknowledged across Europe as one of the best-performing national EU regulators. It already undertakes a substantial amount of scientific assessment work, the majority of which takes place at national level, so there is a high degree of continuity. Indeed, the VMD has an excellent reputation not only within Europe, but internationally based on the strength of its scientific and regulatory expertise. The industry across the EU uses VMD as one of the lead agencies because of its reputation for excellence.

On scientific expertise and advice, it is important for me to express that in the national context, we will be well protected. VMD already has considerable expertise, but it also has access to independent advice and can draw on the expertise of the UK’s Veterinary Products Committee. The committee’s membership includes academics with expertise in ecotoxicology, toxicology, the fate of veterinary medicines in the environment and residues in food. In other words, we believe that considerable expertise is already available to us.

The noble Lord, Lord Trees, mentioned consistency. VMD co-ordinates on a UK-wide basis and meets all DAs yearly to set the annual residues control plan to ensure consistency. More generally on all these matters, in the framework and understanding in respecting the devolved arrangements, the common link and common standards, particularly in areas such, as this are well understood by the devolved Administrations. As I said, their engagement was very much alive on this instrument.

My noble friend Lady McIntosh asked about authorisation costs. In the UK, the costs will remain the same. The noble Baroness, Lady Jones of Whitchurch, mentioned product quality. There are no specific concerns about any of the products from holders currently based outside the UK but, clearly, we need to ensure robust assessment to keep animal and human health safe.

Other points were made. On our arrangements and approach, which I described to the noble Lord, Lord Addington, I say to my noble friend Lady McIntosh that we do not wish there to be any barriers to trade. We wish to collaborate and work to ensure that animal medicines are available in this country. In working with NOAH and industry, everyone is seized of the importance of this issue. I will study Hansard because I want to respond to the noble Baroness, Lady Jones, with specific details on mutual batch-testing.

In our arrangements with the EU, we all want a deal that reflects the importance of collaboration. That is precisely because in this country, we have expertise that the Europeans wish to use and we in turn wish to work with them. This is a strong area in which we wish to work collaboratively.

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My specific concern is about whether we have told the EU that we plan to bring in UK-based registration. Is there a danger of some kind of tit-for-tat? What negotiations are taking place with the EU to make sure that it does not retaliate in some way? We all want a good ongoing relationship, but this SI raises specific questions about the consequences.

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I am most grateful to the noble Baroness. The EU knows about our arrangements. The way in which we have set out the market authorisation holders could not be a stronger signal to our European friends that we have found what we think is an appropriate way of ensuring that we have the protections we believe we need. We are not being draconian or difficult; we believe that it is important to have an international trade in good animal medicines. That is what we seek. For those reasons, I will look at Hansard for any other points to address. In the meantime, I commend the regulations to the Committee.

Motion agreed.