UK Looks To Modernize Medicines And Medical Device Regulation In The Era Of AI

A landmark program designed to deepen the regulatory partnership between the UK and the U.S., a regulatory ‘sandbox’ for AI as a medical device, evidence-gathering on AI regulation in healthcare, a consultation on a draft Rare Disease Therapies Regulatory Framework and the launch of the largest package of UK clinical trial reforms in over 20 years – Sidley’s Dr. Chris Boyle and Zina Chatzidimitriadou bring you up to date with developments at the UK Medicines and Healthcare products Regulatory Agency (MHRA) in the first half of 2026.

UK MHRA Regulatory Round-up: H1 2026

The UK Medicines and Healthcare products Regulatory Agency (MHRA) has, over the past six months, announced a series of significant regulatory reforms which are set to reshape the UK regulatory landscape for medicines, devices, and clinical trials, with some proposals quite literally extending into orbit.

U.S.-UK Regulatory Alignment: A Transatlantic Partnership

In June 2026, the MHRA and U.S. Food and Drug Administration (FDA) announced a landmark liaison program intended to deepen the regulatory partnership between the two countries, enabling faster, more coordinated approaches to emerging regulatory challenges and decisions across innovative medicines, medical devices, and technologies such as AI. These efforts will be facilitated through the establishment of reciprocal liaison officer roles within each organisation.

This June announcement built on earlier U.S.-UK coordination on medicine pricing. In April 2026, the MHRA and FDA agreed to a landmark pharmaceutical arrangement that secured (i) the first increase in the National Institute for Health and Care Excellence (NICE) Quality-Adjusted Life Years (QALY) threshold in 20 years, (ii) a 25 percent increase in the net price paid by the NHS for prospective new medicines, (iii) a decreased clawback under the current Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG), and (iv) an agreement not to introduce tariffs on pharmaceutical products under the U.S. Section 232 investigation. Additionally, the UK and U.S. have agreed to work toward mutual recognition mechanisms for medical device approvals, designed to accelerate access to innovative health technologies for patients on both sides of the Atlantic, while minimizing duplication.

Companies with transatlantic operations should look for opportunities to take advantage of regulatory recognition and reliance pathways as the liaison program develops.

AI and Emerging Technologies Sandboxes

The MHRA is seeking to establish itself as a global leader in AI regulation, including through two complementary initiatives: the AI Airlock regulatory “sandbox” and the broader National Commission into the Regulation of AI in Healthcare.

The AI Airlock program, launched in spring 2024, was MHRA’s first regulatory “sandbox” for AI as a Medical Device (AIaMD). In April 2026, the MHRA secured further funding up to 2029 to continue and expand the program. Phase 2, which completed in May 2026, involved seven innovators, including AI-enabled ambient voice technology, cancer diagnostics, genetic eye disease detection tool, and weight loss management technology.

The Phase 2 program report, published in June 2026, identified key regulatory challenges including the need for pre-market evidence generation for AI medical devices to be designed with realistic deployment conditions in mind, with post-market monitoring designed and specified from the outset. The report also identified several key challenges, including (i) the fact that the threshold for adequate human oversight can evolve over a device’s lifecycle and may not necessarily be a “fixed” safety control; (ii) the risks that product development leads to excursions outside the product’s intended purpose; and (iii) the challenge of appropriately defining and demonstrating performance thresholds for AI to be clinically meaningful and statistically detectable.

Separately, the MHRA launched a call for evidence on AI regulation in healthcare in December 2025, which closed in February 2026. The findings, published in June 2026, inform the National Commission into the Regulation of AI in Healthcare, which brings together clinicians, regulators, and technology experts to advise on AI regulation. The Commission is expected to report in summer 2026.

In relation to medicines, the MHRA launched an AI sandbox in June 2026 to test how AI can improve medicines’ safety assessment and reduce reliance on animal testing. Up to five AI-driven approaches will be tested, with industry engagement beginning in summer 2026. Alongside this, the MHRA, in partnership with NHS England (London) and the London Health Innovation Networks, announced the London Region I regulatory sandbox, which will enable up to 10 AI-enabled medical device manufacturers to deploy technologies in live clinical settings under MHRA oversight and to generate real-world evidence on safety and effectiveness. MHRA will invite expressions of interest from interested NHS providers and AI medical device manufacturers in July 2026.

Companies developing AIaMD or AI-enabled medicines should engage with the MHRA’s sandbox programs to help shape regulatory expectations and build evidence bases early.

Medical Device Market Access: CE Recognition and Regulatory Reform

The MHRA has undertaken substantial reform of medical device regulations, with particular focus on simplifying access routes while maintaining patient safety.

In February 2026, the MHRA launched a consultation on indefinite recognition of CE-marked medical devices, which ran until April 2026. Approximately 90 percent of medical devices currently used in Great Britain are ‘CE-marked’. The consultation sought views on three key proposals: extending current transitional arrangements for devices certified under the Medical Device Directive, indefinitely recognizing EU Medical Device Regulation and In-vitro Diagnostic Regulation devices, and introducing an international reliance route for devices classified higher under British rules.

In connection with this, in May 2026, the MHRA published draft pre-market regulatory requirements, which it notified to the World Trade Organization. These proposals would introduce an international reliance framework enabling swifter access for devices already approved by Australia, Canada, and the U.S.; require unique device identifiers; mandate implant cards for patients; align in vitro diagnostic classifications with international standards; and strengthen technical documentation requirements. An accompanying stakeholder impact survey was launched with a deadline of June 19, 2026.

Post-market surveillance requirements were strengthened in 2024, with regulations coming into force in June 2025. Manufacturers must now maintain post-market surveillance systems, report serious incidents, conduct field safety corrective actions, and produce periodic safety reviews.

The shift toward international reliance and CE recognition should help accelerate market access in the UK, but manufacturers must ensure compliance with the recent enhanced post-market surveillance obligations and any future changes to UK regulatory requirements.

Rare Disease Therapies

In May 2026, the MHRA opened a consultation on a draft Rare Disease Therapies Regulatory Framework, proposing a new licensing pathway for therapies targeting conditions with a UK prevalence of no more than 1 in 50,000. The framework responds to the difficulty of applying conventional development models which assume large patient populations, validated endpoints, and Phase 3 confirmatory trials to rare diseases, where trials may be impractical or infeasible.

The central feature of the Rare Disease Therapies Framework is a proposed Investigational Marketing Authorisation (IMA): a single authorization combining clinical trial approval with a continuously reviewed marketing authorization, granted on the basis of compelling but limited evidence and subject to structured, ongoing safety and efficacy monitoring.

Of interest to innovators in the rare disease sector, the framework contemplates flexible evidence requirements, including platform data, predictive knowledge, innovative trial designs, real-world evidence, alternative evidence sources, use of new approach methodologies, and other novel sources of data, where proportionate to the therapy’s risks, uncertainties, and the practical constraints of the rare disease setting.

Full implementation of the IMA would require legislative change, and the MHRA has indicated that a formal consultation on the necessary legislation would follow. Notably, the framework is distinct from, and does not alter, orphan designation and orphan market exclusivity, which would continue to operate in parallel.

Clinical Trials

On April 27, 2026, the MHRA and Health Research Authority (HRA) announced the launch of the largest package of UK clinical trial reforms in over 20 years, with the new regulations coming into force on April 28, 2026. The reforms were designed to introduce faster assessment of first-in-human trials and a new category of notifiable, lower-risk trials able to start sooner, while maintaining safety standards. They also embrace newer approaches, including the use of early safety data from overseas studies that meet UK standards and computer model simulations to predict, before testing in patients, how medicines may behave.

A central innovation is the Route B substantial modification pathway, piloted between October 2025 and March 2026 and legally mandated from April 28, 2026, under which eligible modifications that raise no new safety concerns are automatically approved unless the regulator raises concerns within 14 calendar days; during the pilot, applications were processed in an average of seven calendar days.

Alternatives to Animal Testing: New Approach Methodologies

On March 25, 2026, MHRA published guidance setting out its approach to medicines developed using non-animal methods, reflecting a move toward phasing out animal testing. The guidance applies to both Clinical Trial Authorisation and Marketing Authorisation applications and articulates the MHRA’s commitment to the 3Rs principles (to replace, reduce, or refine animal use) while acknowledging that current alternative methods, like animal studies, have limitations in predicting effects in humans.

Notably, by the end of 2026 the MHRA will establish a mechanism allowing companies with a product developed entirely without animal studies to have Module 4 of their Marketing Authorisation application reviewed in advance of a full application, providing a non-binding written opinion to de-risk animal-free development strategies.

The Sky is Not the Limit

On March 5, 2026, the UK announced the first dedicated regulatory pathway for space-manufactured medicines, led by the UK Space Agency with support from the MHRA, the Regulatory Innovation Office, and the Civil Aviation Authority, as part of the government’s £2 billion Life Sciences Sector Plan. The announcement noted that the microgravity environment can improve how biologic drugs form and behave, with potential to enhance the quality, stability, and delivery of complex medicines for conditions including cancer and rare diseases.

In a June 2026 update, the MHRA and UK Space Agency confirmed they are jointly developing a collaborative regulatory roadmap, due to be published in Autumn 2026, which will map each stage of a generic end-to-end in-orbit manufacturing lifecycle against existing UK frameworks, identify areas of overlap or uncertainty, and signpost compliance pathways. The MHRA is encouraging developers to engage early through its Innovation Office and Scientific and Regulatory Advice services.

Conclusion

The MHRA’s regulatory agenda reflects a commitment to modernizing medicines and medical device regulation in the era of AI, with a greater appetite for international reliance and recognition to streamline market access and reduce duplication and regulatory burden. Innovators should consider taking advantage of the pilot schemes and regulatory sandboxes as they become available, to gain valuable regulatory insights; biopharmaceutical and MedTech companies should evaluate their portfolios and pipelines for greater opportunity to leverage existing approvals internationally, and new accelerated regulatory pathways, while being mindful of particular UK regulatory requirements.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.