On Thursday 12 July, the UK Government published its much anticipated White Paper setting out its vision of the UK’s future relationship with the EU. At 104 pages long the paper gives a detailed view of the Government’s position as the UK goes into the next round of negotiations with the EU and contains a number of clarifications which will be welcomed by those in the life sciences industry. Here we take a look at the key points of the White Paper from the perspective of the life sciences industry.
Free Trade Area and Common Rulebook for Goods
Over 80 million packs of medicine travel between the UK and EU each month; avoiding disruption to the medicines supply chain is therefore a key concern for both the Government and industry. With medicines, vaccines, active ingredients and biological samples all relying on integrated and secure supply chains and temperature controlled storage, avoiding border delays is crucial. The White Paper addresses this issue by proposing the establishment of a free trade area to ensure frictionless borders and a common rulebook which would mean that manufacturers would only need to undergo one series of tests in either the UK or the EU to place goods in both markets. The proposal includes:
- the phased introduction of a new “facilitated customs arrangement” that would remove the need for customs checks and controls between the UK and the EU;
- an agreement not to impose tariffs, quotas or routine requirements for rules of origin on any UK-EU trade in goods;
- a “common rulebook” which would cover those rules necessary to provide for frictionless borders;
- arrangements covering all of the compliance activity necessary for products to be sold in the UK and EU markets including testing, labelling, manufacturing and quality assurance processes (such as Good Laboratory Practice and Good Manufacturing Practice); and
- bespoke provisions for human and animal medicines including the release of individual batches by a qualified person based in the UK or EU, and the role of the qualified person for pharmacovigilance, responsible for ongoing safety monitoring of potential side effects.
In addition, to ensure that there is no market disruption during the transition to the new free trade area, the UK proposes that:
- all manufactured goods authorisations, approvals, certifications, and any agency activity undertaken under EU law completed before the end of the implementation period, should continue to be recognised as valid in both the UK and the EU; and
- any such processes underway as the UK and the EU transition from the implementation period should be completed under existing rules, with the outcomes respected in full.
Participation in the European Medicines Agency
The European Medicines Agency (EMA) is the EU’s agency responsible for the scientific evaluation, supervision and safety monitoring of medicines in the EU. Amongst other things its role includes evaluating applications for marketing authorisations submitted through the centralised procedure, providing the basis for the authorisation of medicines in Europe. The EMA also continuously monitors and supervises the safety of medicines that have been authorised in the EU. In line with the UK Government’s objective of ensuring products only go through one approval mechanism to access both the UK and EU markets, the White Paper confirms that the Government is seeking continued participation for the UK in the EMA and wants to ensure that all the current routes to market for human and animal medicines remain available. The UK’s proposal includes:
- the UK remaining an “active participant” in the EMA;
- an acknowledgement that the UK will not have voting rights and that participation will involve making appropriate financial contributions;
- an acknowledgement that the UK would respect the remit of the Court of Justice of the European Union (CJEU) such that if there was a challenge to a decision made by the EMA that affected the UK, this could be resolved by the CJEU;
- UK regulators will still able to conduct technical work, including acting as a ‘leading authority’ for the assessment of medicines, participating in other activities like ongoing safety monitoring and the incoming clinical trials framework;
- access for the UK to relevant IT systems to ensure the timely transfer of data between UK and EU authorities.
Research and Innovation
Recognising that the UK is a leader in the advancement of science and innovation, the UK Government has proposed that the UK’s future relationship with the EU includes a science and innovation accord which would include participation in EU research funding programmes. The White Paper highlights Horizon Europe in particular as one of the programmes the UK wishes to continue to participate in. As we explained last month, Horizon Europe has been announced as the successor to Horizon 2020 and has been structured in such a way so as to leave the door open to UK participation following the UK’s exit from the EU (although the scope and nature of that participation of course remains to be negotiated).
The proposed science and innovation accord would also:
- enable continued cooperation through joint participation in networks, infrastructure, policies and agencies (such as the European Reference Networks, which support cooperation and knowledge sharing related to clinical care and research on rare diseases; and INSTRUCT, which promotes innovation in biomedical science by making high-end technologies and methods in structural biology available to users); and
- establish channels for regular dialogue between regulators, researchers and experts.
Mobility of Researchers
The life sciences industry increasingly relies on international collaboration and the UK has long been an attractive location for world leading scientists. Representatives of the research, development and innovation community have therefore stressed the importance of preserving the ability of scientists to move freely between the UK and EU. The White Paper explains that the UK’s future immigration arrangements will set out how people from the EU and elsewhere can apply to come and work in the UK. Importantly, the UK Government has recognised that these future immigration arrangements will be crucial to supporting the UK’s public services, as well as enhancing the UK’s attractiveness for research, development and innovation. Fuller details of the UK’s proposed immigration plans have not been published, however, so whether they will meet the requirements of the R&D community in practice remains to be seen.
It is critical to the life sciences industry to be able to collect and analyse personal data. The transfer of personal data between the UK and EU may be necessary for example as part of a clinical trial, for the use of a biobank or as part of a med-tech service. It should therefore be in the interests of both the UK and the EU to reach an agreement which does not limit the flow of personal data. As the UK will be a “third country” following its exit from the EU, additional measures will need to be put in place to achieve this. The White Paper confirms that the UK will be seeking an adequacy decision which would enable EU businesses and public authorities to transfer personal data to the UK without having to satisfy themselves that sufficient safeguards are in place each time data is transferred. The paper also confirms that the UK will be seeking continued ongoing cooperation between the UK ICO and the EU Data Protection Authorities. The paper states that the UK is ready to begin preliminary discussions on an adequacy assessment so that a data protection agreement is in place by the end of the implementation period at the latest in order to provide the earliest possible reassurance that data flows can continue.
While the White Paper includes a general recognition of the importance of intellectual property rights and the essential role they play in encouraging innovation and creativity, it contains few specifics as to how intellectual property will be treated following the UK’s departure from the EU. One important point however, is confirmation that the Government is exploring participation in the Unified Patent Court and unitary patent system. The UPC and unitary patent system (if introduced) would represent the most important change ever seen in the European patent landscape and will offer a number of benefits to rights holders such as reduced renewal fees for patents and the ability to litigate patents across participating countries in a single forum. Assuming the system goes ahead, continued involvement of the UK would be welcomed by industry as it would extend these benefits to the UK.
While the White Paper has set out the clearest indication to date of the UK Government’s position on the UK’s future relationship with the EU, it is important to remember it is only a negotiating position. It is not clear yet how the EU will react to the proposal, particularly as the UK is seeking to preserve a free trade area for goods while bringing the free movement of people to an end and is therefore proposing to “split” the four freedoms. The EU’s position may become clearer later this week as ministers from the EU27 are meeting on Friday 20 July to discuss the state of play of the Brexit negotiations. Furthermore, the current draft of the White Paper may be impacted by the various UK Parliamentary votes that are scheduled this week on the Customs and Trade Bills that are currently being debated in the House of Commons. Until the UK and EU have agreed a legally binding withdrawal agreement, nothing is certain, including whether there will be a transition period after 29 March 2019. Until then the UK life sciences industry will need to continue to consider all eventualities, including a no deal scenario.