How Will the New Brexit Agreement Impact Pharma?

Boris Johnson wanted to move on from Theresa May's Withdrawal Agreement deal. 'No deal' planning was stepped up and he has now managed to reach an agreement with the European Union on a new Withdrawal Agreement - subject to ratification by both sides including the UK's Parliamentary approval.

In fact, the binding part of the deal at this stage is around the terms of the UK's exit from the EU, and other than changes to the Northern Ireland backstop, much of it remains the same as with Theresa May's deal.

So What's Changed?

What has changed is the political declaration for the future relationship between the UK and the EU following the UK's departure from the EU. The declaration is non-binding. It sets out a roadmap for the next stage of talks. It signals an intent to work closely together, although the language differs from the declaration agreed with Theresa May, which had talked of close regulatory alignment. The new language suggests more flexibility for the UK to decide on its rules. It sets out the intention of both sides to negotiate an “ambitious, broad, deep and flexible partnership across trade and economic cooperation."

What Does This Mean for Pharma?

Trade

The parties will look to agree to develop an ambitious, wide-ranging and balanced economic partnership with wider sectoral cooperation where it is in the mutual interest. This will include:

• A free trade area, with 'deep regulatory and customs cooperation.'
• No tariffs, fees, charges or quantitative restrictions.
• Making use of available facilitative arrangements and technologies to minimise customs checks but continuing to respect the integrity of their respective markets and legal orders.

Regulation

• The parties will explore the possibility of cooperation with EU agencies such as the European Medicines Agency (EMA) and the European Chemicals Agency (ECHA).
• The declaration has removed the line (found in the previous iteration) to align 'with Union rules in relevant areas'.

Cooperation With EU Research Programmes

The UK and EU will explore the possibility of continued participation in EU research programmes in areas such as science and innovation. This will require a 'fair and appropriate financial contribution' and 'fair treatment of participants.'

Intellectual Property

Both parties will maintain the freedom to establish their own regimes for the exhaustion of intellectual property rights. However, they will look to establish a mechanism for cooperation and exchange of information on intellectual property issues.

Free Movement of People

• Free movement will end, but the parties will aspire to visa-free travel for short-term visits.
• The parties have agreed to consider conditions for entry and stay for purposes such as research, study, and training.
• Negotiations will consider addressing social security coordination in the light of future movement of persons, which could cover reciprocal healthcare rights.

Comment

The language in the political declaration is still warm and would envisage co-operation between the UK and EU. However, this is not as close as the language in Theresa May's vision. This allows for more divergence, including over regulations and IP exhaustion of rights. Hopefully, there will be close co-operation on regulatory issues including between the EMA and the Medicines and Healthcare products Regulatory Agency. 

Much of this is still up in the air, though. It will depend on whether Parliament gives its approval for the Withdrawal Agreement. Even then, the devil will be in the detail for the future relationship, so there is a long way still to go.

Through PING (Pharmaceutical Industry Network Group), VWV held a sell-out Conference in association with EMIG, on 3 April 2019 on how Brexit has affected the pharma supply chain. We heard about regulatory, research, immigration and trade issues, as well as an interesting and uplifting perspective from a European-based industry speaker. You can read about the event in the Pharma Times and PHARMAfield.

If you are interested in attending future PING Conferences, or have concerns about how Brexit will affect the pharma sector, please contact Paul Gershlick in our Pharmaceuticals and Life Sciences team on 01923 919 320, or complete the form below.