Brexit Analysis: What does this mean for the life sciences sector? By Sally Shorthose, Partner at Bird & Bird

Brexit Analysis: What does this mean for the life sciences sector? By Sally Shorthose, Partner at Bird & Bird

Notwithstanding the exit of the UK from the EU on 31 January, the Withdrawal Agreement (the ‘WA’) provides that EU law will continue to apply until 31 December 2020, the so called ‘Implementation Period (IP) completion day’. During this transition period the nature of the future EU-UK relationship will be determined, however for the most part it should be ‘business as usual’ for the UK life sciences sector. After IP completion day it is likely that the UK's life sciences regulatory framework will become increasingly de-harmonised from that of the EU.

 

What is the impact of Brexit for the life sciences sector?

The European Union (Withdrawal) Act 2018 as amended by European Union (Withdrawal Agreement) Act 2020 contains provisions whereby directly applicable EU legislation as at IP completion day is converted into UK domestic law. This will provide an initial period of certainty for UK life sciences organisations until the end of the transition period. Subject to any agreed deal, post-IP completion day de-harmonisation between UK and EU regulatory frameworks will have a significant impact for the UK life sciences sector.

 

Marketing authorisations

After IP completion day the UK will no longer be subject to EU law. A new system for independent MA approval through the MHRA will be established to carry out all functions currently done at the EU level. Pharmaceutical companies whose presence and activities are principally in the UK risk losing their MAs granted through the centralised, EU wide procedure, unless action has been taken to transfer key operations and activities to a company based in a EU Member State.

 

Notified Bodies

UK Notified Bodies will lose their status as EU Notified Bodies as of IP completion day and will be removed from the Commission’s information system on notified organisations. Manufacturers who hold a certificate granted by a UK Notified Body prior to the withdrawal date and who plan to continue marketing their devices in the EU market, are advised to consider either applying for a new certificate issued by an EU Notified Body or arranging for a transfer of the file and the corresponding certificate to an EU Notified Body.

 

Circulation of goods placed on the EU market

Quality assurance processes have to have been transferred from the UK (or at least replicated in the EU) before IP completion day in line with current EU goods manufacturing practices in order to ensure products can be sold in the EU and goods can continue to be circulated on the market. All UK-based MA holders must have batch testing facilities in the EEA by 1 January 2021.

 

Market surveillance

The EU pharmacovigilance system is coordinated by the EMA. UK companies will accordingly need to revise their pharmacovigilance reporting system as a single person cannot perform the pharmacovigilance function for the EU and UK as the appropriately qualified person should reside and operate in the EU after IP completion day.

 

UK participation to the European Medicines Agency

As the UK is a third country, the MHRA relationship with the EMA will be significantly different: the MHRA loses its EMA responsibilities and the EMA loses access to the MHRA’s expertise and experience.

 

Supplementary protection certificates (SPCs)

The Patents (Amendment) (EU Exit) Regulations (‘the Patents Regulations’) will come into effect after the transition period and will preserve any SPCs previously applied for under the equivalent EU regulations. SPCs granted under EU regulations however rely on EMA MAs with the ultimate arbiter being the Court of Justice of the EU. For a new post-Brexit UK SPC, a UK patent and a MA granted by the MHRA will be required.

 

Plant variety rights

Community plant variety rights granted two or more months before the end of the transition period will be protected under UK law as a comparable UK right. Applications after this deadline will need to be made separately to the Animal and Plant Health Agency for UK protection, and to the Community Plant Variety Office for EU protection.

 

What does this mean in practice?

The effects are likely to be substantial because as a third party to the EU, the UK will no longer keep access to many of the benefits of the EU system, such as the centralised procedure for MAs, the EU portal for clinical trials and the pharmacovigilance database. The WA should buffer the effect of EU regulations ceasing to apply however businesses should be prepared for divergence from the EU after IP completion day.

For example, exhausted IP rights whether in the UK or the EU before the IP completion day will remain as such It is still uncertain whether the doctrine of exhaustion will continue post IP completion day. The Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2019 will fill this void by retaining the EEA-wide exhaustion system in the UK. Absent any agreement with the EU however, there is no reciprocity for goods put on the UK market—and owners of rights in the EEA will be able to prevent parallel imports from the UK.

The political declaration on the future UK-EU relationship does not refer anymore to 'a trading relationship on goods that is as close as possible'. What are the main consequences for the sector if the UK regulatory framework diverges from that of the EU?​

Should the UK government no longer align itself with European law, the administrative burden for UK Life Sciences companies wishing to operate in both the UK and the EU will increase significantly due to a ‘doubling up’ on regulatory requirements, such as clinical trial authorisations and MA applications.

 

For more information on Brexit, see our Brexit Tools page.

 

Interviewed by Alinda Ohotski.

The views expressed by our Legal Analysis interviewees are not necessarily those of the proprieto

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About the author:
Sally is a partner in the Life Sciences and Intellectual Property Group at Bird & Bird LLP, based in London. She qualified at Herbert Smith and spent a few years in the corporate department there. Before her return to private practice in 2001, she had spent 11 years working in-house in senior roles in the Life Sciences industry, including several years as Legal Director of the Novartis Group in the UK. She now specialises in transactional IP work and life sciences regulatory work. She is the editor of the Kluwer Law publication, the EU Guide to Pharmaceutical Regulatory Law and is a regular speaker internationally on all types of IP and regulatory issues. She leads the Bird & Bird initiative in relation to Brexit matters.