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New UK-EU Deal - What Does It Mean for Life Sciences?

on Monday, 11 January 2021.

Well, it finally happened. After months of complex negotiations and stand-offs that took Europe to the brink and back, the EU and UK finally agreed a trade and co-operation deal on Christmas Eve.

At more than 1,200 pages long, it is hard to call it a 'thin deal', but that is what it is in many respects. However, at least there is a deal, there are zero tariffs on goods and there is much to build on a spirit of co-operation. Future discussions and ways of working together are a theme within the deal.

With a series of Paragraphs within Articles within Sections within Chapters within Titles within Headings within Parts, not to mention plenty of Annexes and references to other documents and treaties, with a lack of navigational assistance for the reader - this is not for the faint-hearted! So much for light Christmas Day reading!

For a general overview of the legal implications, please see our article, "Brexit - Our New Relationship with the European Union".

But What's in It for Life Sciences?

This is still being worked out, but more continues to become clear. Here is what we have gleaned:

  • Pharma products or medical devices imported or exported between the UK and EU are tariff and quota free.
  • There is a specific Annex TBT-2: Medicinal Products on page 492 which covers good manufacturing practice and the mutual recognition of inspections by the national regulators.
  • Intellectual property rights - There are about 25 pages, and not much has changed, but…
  • Exhaustion of rights, ie the ability to trade products in one place without being stopped by a trade mark owner. There is a rather bland statement that, "This title doesn’t affect the freedom of the parties to determine whether and under what conditions the exhaustion of intellectual property rights applies." However, this is what the Intellectual Property Office interprets the position as:

- The UK for now is unilaterally recognising any products that have been put on the market in the EEA as having been exhausted - ie can be freely sold in the UK.

- Any products that had been put on the market in the UK before the end of the transition period on 31 December 2020 are exhausted as far as the EEA is concerned - ie can be freely sold in the EEA.

- Any products that had been put on the market in the UK after the end of the transition period on 31 December 2020 are not exhausted as far as the EEA is concerned - ie would need to have the rights holder's consent to be sold.

- The IPO plans to consult further on its future exhaustion of rights position in the next few months.

  • Free trade in personal data - temporarily at least. The UK recognises the EU's data protection laws as "adequate", but the EU has not yet done likewise. The signs from the agreement itself and some other statements suggest that this is what is on the cards as long as the UK's data protection laws do not change - but this is far from a done deal. For now, there is a temporary status quo for the next four to six months. For more on this point, please see our article, "Brexit and Data Protection - What Do UK Organisations Need to Do Now?".

What's Missing from This Deal?

  • Any sort of mutual regulatory authority recognition or equivalence.
  • Mutual recognition of batch testing.
  • Mutual recognition of Good Clinical Practice.
  • Information sharing and packaging, labelling and other aspects of regulations on falsified medicines.
  • Properly addressing the Northern Ireland Protocol and how Northern Ireland can remain part of both the UK and the EU's Customs Union and Single Market, including how the UK's regulator, the Medicines and Healthcare products Regulatory Agency, can act as a regulator for that territory - whose products will be subject to a separate regulatory regime.
  • A final position on data protection.
  • A clear position on competition law, although for now the UK and EU systems are in line with each other. There is, however, currently a lack of clarity over whether the EU's competition law hard core restrictions such as around prohibiting sales that create barriers with different EU nations no longer apply to the UK.
  • Clarity over State aid, including the extent to which the UK Government can throw money at UK life sciences projects.

A Building Base

Despite a lot that is not yet clear, there are good reasons to be hopeful. There is a deal when many people predicted there would not be. The mood music is in a totally different place now that has happened, the deal itself has the foundations in the Partnership Council and many different committees that are intended to work together and find common standards and ways of working that will build on this initial deal.

In fact, in the Medicines Products Annex itself, Article 10 Paragraph 2 says: "The Parties shall endeavour to cooperate with a view to strengthening, developing and promoting the adoption and implementation of internationally agreed scientific or technical guidelines including, where feasible, through the presentation of joint initiatives, proposals and approaches in the relevant international organisations and bodies referred to in Article 4."

So, there will be continued discussion, and we hope one day the MHRA and the EMA will return to the close relationship they had before the Brexit process.

In the meantime, though, there is much that gives the UK the freedom to go down a different path if it so chooses, including with relationships with others to the West and East of Europe.

There is potential for regulatory divergence as the laws and practices develop in each of the UK/EU, but for now that seems more theoretical - there is still an appetite for regulatory alignment, but with the flexibility to go down a different route. Who knows what the future will hold if deals with others push the UK in a different path from the EU, but for now this is a good base to build on.

And as we saw in the 2020 PING Conference with leading speakers on Genomics, Personalised Medicine and AI, as well as the UK's leading role in the COVID-19 pandemic response with use of drugs, discovery of vaccines an use of data - there is so much where the UK is leading the way in academia, industry and with the NHS.

We will be exploring these areas further in PING meetings this year.

Coronavirus Legal Advice

If you would be interested in hearing more about the impact of the new relationship between the UK and EU and being invited to attend PING meetings, please contact Paul Gershlick in our Pharmaceuticals & Life Sciences team on 07795 570072, or complete the form below.

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