The key facts about regulatory reforms in the UAE. Prepared in association with STA, a leading law firm in the UAE, this is an extract from The Pharma Legal Handbook: UAE, available to purchase here for GBP 75.
1. Are there proposals for reform or significant change to the healthcare system?
On 19 December 2019, the UAE government adopted a new federal law which was to overhaul Law No. 4 of 1983 on the Pharmacy Professional and Pharmaceutical Establishments and Law No. 20 of 1995 on the Drugs and Products. This newly introduced Law No. 8 of 2019 on Medical Products, Pharmacy Profession and Pharmaceutical Establishments (the new Law) has been issued in order to consolidate and update the legal framework under which medical products are placed on the UAE market. The new Law applies to medicines, medical devices and health-related consumer goods. The scope of the new Law is rather expansive; some of the areas that fall under its jurisdiction include:
- product registration and the status of marketing authorization holder
- medicine pricing
- imports, exports, distribution, warehousing and manufacturing
- post-market surveillance, compliance, safety reporting and conscientious product recalls
- product promotion
- licensing requirements for manufacturers, importers, distributors, wholesalers, marketing offices and consulting firms, pharmacies, laboratories and research centers;
- product availability measures
- clinical trials detailing
In this new Law;
- The concept of marketing authorization has been redefined. The terms, “marketing authorization” and “marketing authorization holder” are elucidated upon in the new Law, and the obligations of the authorization holder have been established in no uncertain terms. A new ministerial resolution is expected to set out the rules, conditions and procedures for obtaining a marketing authorization.
- It also is reflective of a move away from distributor-led interventions towards more direct contact and accountability for pharmaceutical, device and consumer companies. This newly-emphasized accountability has been manifested in a new requirement for a marketing authorization holder to appoint one or more qualified persons residing in the UAE. This appointee must have pharmaceutical or medical qualifications and be licensed in the UAE. They will be jointly liable with the marketing authorization holder for compliance with the new Law.
- The new Law states that a marketing authorization holder must necessarily appoint one pharmaceutical establishment as an importer, but is permitted to appoint one or more distributors for the products within the UAE. This is undoubtedly a mammoth departure from the past where import and distribution were both entrusted to one single agent per product; this move certainly underlines the government’s new attraction to liberalization and the safeguarding of competition.
- The new Law explicitly provides that a person who is not a UAE citizen may not start up a pharmaceutical establishment, whether it be for import, distribution or storage purposes. However, exceptions can be granted by a cabinet resolution, which would exempt foreign-owned companies from the UAE citizenship requirements. Furthermore, companies set up in the free zone are not subject to the ownership restriction.
- Another noteworthy point in the new Law is that it has not retained the concept of a scientific office. The law of 1983 had established the concept of a scientific office which was further developed in Ministerial Resolution 1110 of 2016 on Scientific Offices. As a consequence, many global pharmaceutical companies had established a scientific office onshore or in a free zone to support scientific, medical, regulatory, safety and marketing activities under the supervision of a licensed pharmacist. The new Law has introduced the new function of a qualified person appointed by the marketing authorization holder with similar obligations and a more limited concept of a marketing office which is responsible for promoting medical products and following up on the circulation of the products in the UAE. However, the qualified person is a naturalized person, and needs to reside in the UAE.
- The provisions in the new Law on the conduct of clinical trials largely codify existing practices. The UAE Ministry of Health will set up a supreme committee for clinical study ethics. While the day-to-day ethics oversight shall stay the responsibility of the local health regulators, the supreme committee will be responsible for the harmonization of national ethics coordination.
- The new Law emphasizes that medical products subject to price controls cannot be sold at higher prices, and no discounts may be granted.
- Notably, regulatory data protection for innovative medicines have not been codified in law. Instead, the new Law iterates the UAE’s commitment to the international agreements and the law on patent protection. The new provisions read as a confirmation of the patent linkage mechanism currently in place.
- The new Law strictly proscribes pharmacists from substituting or replacing prescribed items, unless the issuant has been consulted. However, the new Law does provide an exception for generic substitution based on implementing regulations, hence providing a basis for further expanding the generics policies.
- Sanctions have been substantially increased. In a serious step up from the old regulations, the new Law is set to impose administrative sanctions without prejudice to additional civil and criminal liability. Administrative sanctions range from warnings, to temporary suspensions of licenses and administrative fines that could be levied as high as Dhs. 1,000,000 for pharmaceutical establishments. Criminal sanctions can be added for breach of specific provisions of the new Law ranging from six months to five years and/or criminal fines that range from AED 50,000 to 500,000. However, counterfeit-related violations will trigger fines up to AED 1,000,000.
2. When are they likely to come into force?
Published in the Official Gazette on 31 December 2019, the new Law officially entered into force on 30 January 2020. However, it must be noted that until new implementing regulations are issued, the implementing regulations under the repealed laws of 1983 and 1995 will remain in effect to the extent that such implementing regulations do not contradict the provisions of the new Law. The timeline set for adopting the implementing regulations is 6 months. The law provides for a transitional period of 1 year which may be extended by the UAE Ministry of Health for up to five years.
It would be prudent for companies to familiarize themselves with the provisions of this new Law and to assess the impact on their business, as well as the opportunities that it extends. The full impact of the new Law is expected to become clearer over time as the executive and other implementing regulations are being adopted.