The UK government published its White Paper on 12 July 2018, setting out a future trading relationship with the EU, laying the foundation for the future.
The government’s vision with regard to the life sciences industry offers some much needed reassurance to the sector. Indeed, the proposals appear to respond to the recommendations made to government by the House of Commons select committee on how to safeguard the industry from the impact of Brexit.
It remains unclear how this relationship will work in practice or whether a political agreement can be reached with the EU. Indeed, there are certain aspects of the White Paper that would require the EU to show a lot of flexibility.
Nevertheless, we consider the key focus points arising from the White Paper for stakeholders within the industry.
1 Economic partnership
- Free trade area for manufactured goods and common rulebook: The UK government prioritises the establishment of a free trade area for manufactured goods, including medical devices and pharmaceutical products, for frictionless trade at the border. The UK and the EU would maintain a “common rulebook” for all goods, resulting in continued harmonisation with relevant EU rules. This envisages that:
- The UK will seek participation in relevant EU technical committees, taking a role in designing and implementing rules - albeit without formal voting rights - ensuring that UK regulators can continue to contribute their expertise to EU agencies, such as the European Medicines Agency (EMA).
- The British Standards Institution (BSI) would retain its ability to apply the “single standard model”, ensuring consistency between UK and EU standards as well as enabling the UK to continue playing a leading role in the European Standards Organisations globally.
- Manufacturers need only undergo one series of tests if intending to market products both in the UK and EU, covering all relevant compliance activity necessary for products to be sold on both markets. The role of ‘responsible persons’ who interact with authorities during and post-production of certain high risk products, and the role of the qualified person in pharmacovigilance would also feature.
- Facilitated Customs Arrangement (FCA): Proposals for a new FCA would remove the need for customs checks between the UK and EU. The UK would apply the UK’s tariffs and trade policy for goods intended for the UK, and the EU’s tariffs and trade policy for goods intended for the EU. This would (in theory) enable the UK to control its own tariffs for trade with the rest of the world.
- Tariffs and rules of origin: In addition to the FCA, an agreement not to impose tariffs, quotas or routine requirements for rules of origin on any UK-EU trade in goods.
- Market surveillance: The UK intends to maintain its robust programme of risk-based market surveillance and establish cooperation arrangements with EU regulators to ensure that dangerous, non-compliant products do not reach consumers or patients.
2 Active participation in the EMA
In an acknowledgement to the complexities of the regulatory processes for medicinal products, the UK seeks continued active participation in the EMA under new arrangements that would involve making an appropriate financial contribution - again albeit without formal voting rights. It is proposed that:
- All current routes to market medicines remain available, alleviating concerns that the testing and release of medicines would be at risk of delay post-Brexit.
- UK regulators will continue conducting technical work, including acting as ‘leading authority’ for the assessment of medicines, ongoing safety monitoring and the forthcoming EU clinical trials framework.
- The UK will commit to respect the rules under which the EMA operated as well as the remit of the Court of Justice of the European Union (CJEU). As to the latter, if there was a challenge to a decision made by the EMA that affected the UK, this could be resolved by the CJEU.
3 Framework for mobility
It appears clear that the government is keen to preserve labour market flexibility between the UK and the EU – something of particular importance to life sciences, not least to allow international collaboration of scientists.
Whilst the White Paper makes it clear that the free movement of people will end, it offers a number of exceptions aimed at maintaining many of the benefits of cross-border mobility that EU and UK citizens currently enjoy.
The White Paper sets out a mobility framework so that UK and EU citizens can continue to move freely between the UK and EU to visit, study and work. Specifically, it singles out the temporary mobility of scientists and researchers, self-employed professionals, employees providing services.
4 Science and Innovation
In recognition of the vital role played by the UK in pioneering research, the UK proposes a new cooperative accord for science and innovation that provides for UK participation in EU research funding programmes and establishes channels for dialogue between regulators, researchers and experts.
Most notable is the UK’s intention to explore association with existing research programmes, to include Horizon Europe (previously known as ‘Horizon 2020’).
5 Intellectual property (IP)
The UK intends to explore staying in the Unified Patent Court and unitary patent system following its recent ratification of the Unified Patent Court Agreement.
The White Paper appears largely favourable for the life science industry and will be regarded as a step in the right direction. However, stakeholders must not lose sight of the fact that there is no final deal.
Whilst Brussels is making some noises that could be taken as a willingness to compromise, there are also questions about the UK’s proposals. For instance, whilst the type of mobility framework suggested should be feasible to achieve, in practice, the EU may demand greater scope in exchange for market access.
There is also a lack of detail with regard to some of those proposals relevant to the sector – for example, the UK’s arrangements for IP post-Brexit.
It is, however, encouraging to hear Dominic Raab MP, when giving evidence to the Lords’ EU Select Committee on 29 August 2018, stating that there is some precedent for third party membership of EU agencies and that UK membership is currently being negotiated.
Much greater work is required and whatever the final deal, the implications of Brexit will impact across the life sciences ecosystem. Companies within the sector should remain vigilant to the risks to their organisations, but also the opportunities to grow a competitive advantage as the new trading landscape unfolds.