Brexit: Life Sciences implications

This article is part of our Brexit series and sets out the implications of Brexit on the UK Life Sciences industry. Now that the transition period has come to an end Life Sciences businesses will be affected by many of the implications identified throughout this series and, in particular, in our note on the English Intellectual Property law implications of Brexit and Brexit: Medical Devices Implications. For an explanation of the finalised Withdrawal Agreement, please see here.

What is the current position and how are medicinal products and crop protection dealt with in the TCA?

The effects of Brexit on the Life Sciences sector are substantial. This is because, as a third party to the EU, the UK no longer has access to many of the benefits of the EU system, such as the centralised procedure for market authorisations (MAs), the EU portal for clinical trials and the Pharmacovigilance database. There is no further mutual recognition of crop protection product marketing applications.

Medicinal Products

Medicinal Products are covered in Annex TBT-2 in the TCA (the “Medicinal Products Annex”), which applies to all medicinal products listed in its Annex C, including human and veterinary products and ATMPs.

A Working Group on Medicinal Products is to be established to facilitate mutual consultation so that the EU and the UK can work together to implement agreed international guidelines, to monitor and review implementation of the Medicinal Products Annex, and to check how it is operating. Disputes arising out of the Medicinal Products Annex will, however, fall outside of the TCA’s disputes mechanism; it is hoped that the structure of the Working Group will suffice for dealing with disputes or blips arising out of the implementation of the Medicinal Products Annex and the development of the parties’ relationship post-Brexit. The TCA provides that any changes to either the UK or the EU’s regulation regime should be on 60 days’ notice and be subject to discussion.

There are provisions which will affect the medicinal products industry included in the IP section (Title V) of the TCA. They include:

1. the treatment of regulatory data protection:
   
   • a requirement to ensure that commercially confidential information submitted to obtain an MA is protected against disclosure to third parties in the absence of an overriding public interest, and that steps are taken to ensure the data is protected from unfair commercial use;
   • that regulatory protections will be “for a limited period of time to be determined by domestic law”, so that each of the UK and the EU may determine the length of such regulatory exclusivities under their own regulatory regimes; and
     
     
2. SPCs – as set out below.
   
   Research
   
   There is good news for research and development activities in the UK - the TCA provides that as long as the UK continues to make financial contributions, the UK will continue participating in EU programmes, including the EU’s research and innovation funding programme, Horizon Europe, and, perhaps in the light of the COVID-19 pandemic, there is express provision for UK / EU cooperation on “serious cross-border threat[s] to health”.
   
   Crop Protection Products
   
   From 1 January 2021, an independent pesticides regulatory regime has been in operation in Great Britain (England, Scotland and Wales) and new decisions taken under the EU regime will not apply in Great Britain. This includes active substance and maximum residue level (MRL) decisions and any new EU plant protection product (PPP) legislation.
   
   The Health and Safety Executive (HSE) will remain the national regulator for the whole of the UK, on behalf of the UK government and the devolved administrations.
   
   Under the terms of the Withdrawal Agreement and Northern Ireland Protocol, EU PPP legislation continues to apply in Northern Ireland and as such unfettered access for qualifying Northern Ireland goods moving to the rest of the UK market is agreed.
   
   New authorisations or amendments under both the GB and EU pesticides regimes may be required in order to gain access to GB, NI and EU markets. This may be a common application where there is no divergence between the two regimes. Future applications for renewal of current authorisations and approvals may also need to be made under both the GB and EU pesticides regimes.
   
   All relevant EU law in relation to the regulation of plant protection products has been retained in GB law and retains the same official titles, for example Regulation (EC) 1107/2009, whereas Northern Ireland will continue to be subject to existing EU law.
   
   The laws for Great Britain and Northern Ireland have identical titles, but they may have some differences in requirements for duty holders, over time.
   All existing active substance approvals, PPP authorisations and MRLs continue to be valid in Great Britain and existing PPP authorisations remain valid until their current expiry date.
   
   Active substance approvals due to expire before December 2023 have been extended for three years to allow time to plan and implement the GB review programme.
   
   Great Britain sets MRLs based on its own assessments but all existing (EU) MRLs remain valid until they are amended. Applicants will need to continue to meet any existing conditions under the new GB pesticide regime.
   
   MRLs in Great Britain and the EU may start to diverge over time – indeed the UK Government has already announced the approval for use of neonicotinoid thiamethoxam, a pesticide said to be toxic to insects which was banned by the EU - so businesses producing food for export or trading in food produce should consider the requirements in their target market.
   
   Applicants for new active substance approvals, PPP authorisations and MRLs in Great Britain need to continue to submit applications to HSE in the same format. There will be no changes in data requirements or format for supporting information for new applications.
   
   No further mutual recognition applications can be accepted under the GB PPP regime. Any ongoing evaluations will be continued to a GB only decision. Where there is no divergence with EU conditions of authorisations, a GB and NI authorisation may be issued.
   
   EU mutual recognition applications can continue to be considered for Northern Ireland.
   
   What issues may the Life Sciences sector face following Brexit?
   
   Legislation
   
   The Life Sciences sector is one of the most highly regulated and globally harmonised industry sectors, especially in terms of the development of pharmaceutical products. A large amount of UK regulation has originated from its membership of the EU in the form of Directives or Regulations. In the case of Directives (e.g. Directive 2001/83/EC governing medicinal products), these have been implemented into national law and will therefore remain in place (subject to amendment). Regulations, in contrast, are directly applicable in the UK without the need for national implementation and therefore, as from the end of the transition period, the EU Regulations no longer apply. The EU Withdrawal Act should be effective in buffering the effect of a lapse in applicability of Regulations; it is intended to incorporate existing Regulations (subject to amendments) into UK law so that the vacuum left if a Regulation were to just cease to apply is filled.
   
   There is no reason why the UK Government could not enact further equivalent rules into UK law. However, the UK Government appears to have decided that it will no longer align itself with European law and is therefore likely to distance its future legislation from European laws.
   
   The administrative burden of life sciences companies has increased, and will continue to increase, significantly because regulatory requirements, for example clinical trial authorisations and MA applications, now need to be obtained under a new and different legal framework. Life Science companies also need to keep abreast of changes to the GB/NI legislation as the relationship between the UK and the EU develops, and as the effect of the NI protocol is monitored and possibly amended.
   
   Clinical Trials
   
   The new Clinical Trials Regulation 536/2014 was adopted on 16 June 2014 but has not yet been implemented (it was expected to be in force some time during 2020, but a new date has been given for the system it runs on to go live in December 2021 [1]). The new Regulation provides for a single application for clinical trials across the EU (through a single portal) with an associated EU wide database. This Regulation will apply to clinical trials for medicinal products but not in the UK.
   
   Now the UK has left the EU, it is no longer able to take part in the European regulatory network for clinical trials, and regulatory responsibilities have transferred to the Medicines & Healthcare Products Regulatory Agency (MHRA). The UK government guidance [2]  set out the latest position in relation to clinical trials now that the transition period has ended. Unfortunately, the guidance does not address the status of existing approvals for clinical trials or whether the UK will seek to align with the EU Clinical Trials Regulation. Further guidance is anticipated.
   
   Now that the transition period has come to an end, the sponsor or legal representative of a clinical trial must be in the UK or country in an approved country list (which for now includes the EU/EEA countries). For ongoing trials, the UK will accept a sponsor or legal representative established in the EU/EEA, and no amendment submission to the MHRA will be required. Where the sponsor is from the rest of the world, and the legal representative is established in the UK and there are sites elsewhere in the EU/EEA, the sponsor will need to assign an EU/EEA legal representative for these EU/EEA sites.
   Additional questions will also arise in relation to data protection (in particular clinical trial data and personal data) currently falling under the EU General Data Protection Regulation which should be borne in mind but is beyond the scope of this article. These discussions are beyond the scope of this article. More detailed advice may be found here.
   
   Marketing Authorisations
   
   The majority of MAs in Europe are applied for under the decentralised procedure (national) or the centralised procedure (EU wide); each application process is determined by Directive 2001/83/EC. The UK is no longer part of the EEA and has therefore established a new system for independent MA approval through the MHRA, whose workload has increased considerably (although they have lost their EMA responsibilities). The MHRA will carry out all functions currently done at the EU level, including the making of decisions on applications, variations and renewals.
   
   Pharmaceutical companies whose presence and activities are exclusively in the UK will not be able to use the centralised procedure to seek MAs, unless action has been taken to transfer key operations and activities to an EEA Member State and that they use an EEA base for applications and compliance. Other rights, such as the EU support for small and medium enterprises, the “minor use minor species” status for veterinary medicines and the qualification as an orphan medicinal products [3]  has also been lost. However, the MHRA will offer incentives in the form of market exclusivity and full or partial refunds for MA fees to encourage the development of orphan medicinal products. Waiver from scientific advice fees will also be available for UK based SMEs (see guidance here).
   
   Conversely, pharmaceutical companies also need to consider UK activities and presence if they are currently based in the non-UK EU and EEA – they will need to apply for separate UK MAs, although existing MAs on centrally authorised products (i.e. those in existence at the end of the transition period) have, pursuant to the Human Medicines Regulations (Amendment etc.)(EU Exit) Regulations 2019) been converted from EU to UK MAs, as if they were granted on the date the corresponding EU MA was granted. The MHRA will require the provision of essential baseline data to be submitted electronically – there will be a one year period of grace after the end of the transition period for companies to comply with this requirement.
   
   The MHRA has taken over the renewal process for MAs granted through mutual recognition or decentralised procedures which were underway at the end of the transition period.
   
   If nothing else, having to apply for MAs in the UK as well as the EU will add to the regulatory burden, increase barriers to the market and costs for the life sciences industry. As mentioned above, the MHRA has found that its workload has increased commensurately as the centralised procedures are dismantled, and indeed as companies seek clarity about the new regulatory regime.
   
   Quality Assurance and Product Safety
   
   Quality assurance processes have to have been transferred from the UK (or at least replicated in the EU) in line with current EU good manufacturing practices in order to ensure products can be sold in the EU. All EEA located manufacturers and importers of medicines need to hold a manufacturing authorisation; the EMA determined that all MA holders must have had by 1 January 2020 batch testing facilities in the EEA and completed all necessary regulatory submissions.
   
   Even with the UK not being part of the EEA after Brexit, UK manufacturers can continue to export products to the EEA, although the cost of importing into the EU has increased as the EU imposes additional requirements and inspections on non-EU imports. While mutual recognition of regulatory approvals has not been agreed, in the light of the stated aim of the Medicinal Products Annex to “facilitate availability of medicines, promote public health and protect high levels of consumer and environmental protection in respect of medicinal products”, the Annex provides for:

• the mutual recognition of Good Manufacturing Practice (GMP) inspections and certificates, meaning that manufacturing facilities do not need to undergo separate UK and EU inspections;
• the individual inspection, on notice, by the EU or UK of each other’s facilities; and
• the suspension of the mutual recognition arrangements.
  
  Furthermore, uniform product safety laws, as applied currently across the EU (e.g. the General Product Safety Directive (2001/95/EC)), are likely (but not a given, as the UK government can publish their own national standards) to continue post Brexit in common with those of the EU and globally so as to maintain the competitiveness of UK goods and suppliers. If a product is subject to a specific provision in retained EU law, then these will continue to apply to that product. The Product Safety and Metrology etc. (Amendment etc.) (EU Exit) Regulations 2019 came into force on exit day and amended the General Product Safety Regulations 2005. Please note that there is divergence in the rules for uniform product safety laws in Northern Ireland.
  
  R&D and Funding
  
  The EU has provided funding and coordinates research collaborations through funding programmes such as the Innovative Medicines Initiative and Horizon 2020; UK based researchers were among the largest beneficiaries of those programmes.
  
  As mentioned above, although the UK is no longer part of the EEA following Brexit, but in accordance with the terms of the TCA, UK researchers will remain eligible for European research funding. In exchange for a contribution to the EU budget, they will join the forthcoming Horizon Europe research program, which will spend €85 billion over the next 7 years. While at first sight, this is good news, the UK will have no influence over how that money is spent and furthermore, since the contributions are calculated on the basis of GDP, there is a fear that in due course this involvement may be deemed too costly.
  
  It has been feared that UK based research facilities would see the loss of talented researchers to research facilities in the EU, but so far this has not happened to too great extent and the UK remains an attractive centre for research with its excellent universities and science parks. The UK Government has undertaken to replace lost funding and perhaps to seek to establish bilateral agreements with other nations in order to access other funding/collaboration options.
  
  Pharmacovigilance
  
  The EU pharmacovigilance system is coordinated by the EMA. UK companies will therefore need to revise their pharmacovigilance reporting system, as a single person cannot perform the pharmacovigilance function for the EU and the UK, as the appropriately qualified person should reside and operate in the EU. In the UK, the MHRA will continue to be responsible for pharmacovigilance and the Government has published its guidance on the exceptions and changes to the EU Good Vigilance Practices [4]. UK and non-UK Individual Case Safety Reports (ISCRs) in the UK will now be submitted via the new MHRA Gateway or ISCR Submissions portal. For products placed on the market in Northern Ireland, ISCRs need to be submitted to the EudraVigilance database according to EU requirements. In general, the MHRA will continue to accept reports and submissions in EU formats but may request additional information or later prescribe its own required format.
  
  Regulatory Authorities
  
  The EMA which was previously based in London moved to Amsterdam. With the UK not being part of the EEA after Brexit, the EMA and MHRA will be significantly affected. The MHRA has stated their need to increase employee numbers to carry out the regulatory work, which would have previously been handled by the EMA. In addition, where previously the EMA cooperated with the ICH, FDA, Japanese PMDA and other competent authorities, the MHRA will now need to negotiate its own cooperation agreements to replace those agreed by the EMA.
  
  There will be further, hopefully more minor, impacts made to other UK agencies (e.g. NICE) that are beyond the scope of this article although there is an article on theNICE website [5] in which they say that they will be working with the MHRA.
  
  Exhaustion of rights
  
  Interestingly, as regards exhaustion of intellectual property rights, the UK government has in the Intellectual Property (Exhaustion of Rights)(EU Exit) Regulations 2019 (the SI) an asymmetric regional exhaustion.
  
  In summary, the SI provides that the present system of EEA-wide exhaustion will be retained to the furthest extent possible. Following the end of the transition period, rights in goods put on the market in the EEA will be exhausted in the UK but, absent to any agreement with the EU, there will be no such reciprocity for goods put on the market in the UK; putting the goods on the market in the UK will not exhaust the IP rights in the EEA.
  
  Therefore, although owners of UK IP rights will not be able to prevent parallel imports from the EEA, as the UK will no longer be a Member State, owners of rights in the EEA will be able to prevent parallel imports from the UK. The UK Intellectual Property Office's (UKIPO) guidelines on exhaustion and parallel trade post Brexit, therefore stress the need for parallel importers to review whether they will need the EEA-based IP rights holder's permission to export goods to the EEA.
  
  More detail can be found here.
  
  Specific Impacts on Intellectual Property Rights
  
  Patents
  
  Patents will to a great extent continue as before - patents covering the UK will continue to be granted both by the UKIPO and the European Patent Office (EPO). Applications for patents can be filed directly with the UKIPO or EPO or can be made pursuant to an international patent application filed under the Patent Cooperation Treaty. Neither the UKIPO, nor the EPO, is an EU institution; therefore their operation will be unaffected by Brexit.
  
  The UK will continue to be one of the 38 contracting states to the European Patent Convention, which is the international treaty that established the EPO. Applicants will continue to be able to file their applications with the EPO and, on grant, request validation in the UK and other countries of interest.
  
  The standing of granted patents will also be unaffected by Brexit. Following grant and validation in the UK, European patents have – and will continue to have – exactly the same legal effect in the UK as national patents granted by the UKIPO.
  
  Furthermore, the UK will remain a member of the Paris Convention, which supports IP protection around the world. Applicants who have filed for patent protection in the UK will still be able to subsequently claim the priority of that application for a patent registration in other countries and vice versa.
  References to the EU in patent licences will need to be carefully reviewed, both in relation to existing licences and new ones.
  
  Unitary Patent System
  
  The new EU patent regime was intended to provide patentees with the option to apply for a single pan-EU Unitary Patent (UP) covering most of the EU. It would also create the Unified Patent Court (UPC) to hear and determine patent disputes on an EU-wide basis. The UK has chosen not to participate in the UPC system, which it appears, after some German constitutional bumps in the road will continue without the UK.
  
  For more information see here.
  
  SPCs
  
  The additional protection afforded to patentees by Supplementary Protection Certificates (SPCs) has been part of UK law by virtue of two EU Regulations. By virtue of the Patents (Amendment) (EU Exit) Regulations 2019, all EU SPC law was transposed into UK national law, but to make this retained EU legislation work in practice some processes have had to change.
  
  During the transition period, the UK’s SPC regime was unaffected so UK SPCs granted before the transition period expired will remain valid, on the same term. Furthermore, in accordance with the Withdrawal Agreement, all pending SPC applications filed in the UK before 31st December 2020 will continue in the same way regardless of Brexit, and will provide the same rights once granted.
  
  The position has changed now that the transition period has ended; while the UK’s SPC regime remains largely unchanged, and many of the processes for applying for an SPC will remain the same, applicants for new SPC applications filed from 1st January 2021 will require (as before), a UK patent granted by the EPO or the UKIPO, and a MA valid in the UK. New SPC applications filed from 1st January 2021 can therefore be based on either:
  
  
• existing EMA authorisations, if the product has already been authorised by the EMA before 2021 and that EMA MA has become a UK MA by virtue of the grandfathering which was introduced to ensure that authorised products remained on the UK market; or
  
  
• MAs granted by the UK’s MHRA.
  
  From the end of the transition period, since Northern Ireland is continuing to be aligned with the EU in relation to medicinal products post-Brexit, UK MAs may have one or two of three different territorial scopes. This means there will be three types of MAs that apply within the UK:
  
  
• MAs for Northern Ireland (NI) granted as part of the EMA’s centralised procedure;
  
  
• MAs for England, Scotland and Wales (Great Britain or GB), granted by the MHRA; or
  
  
• UK MAs valid across the whole UK (where based on grandfathered EMA MAs).
  
  It may be that applicants end up with multiple MAs – a Great Britain MA and a NI MA.
  
  New legislation has had to be introduced (Supplementary Protection Certificates (Amendment) (EU Exit) Regulations 2020), to replicate as far as possible, a regime as familiar as possible to the previous regime. It is intended that an SPC may be granted if there is an MA which allows the product to be sold anywhere within the UK, but such an MA must fulfil the same requirements as in the current system – i.e. it must be valid for placing the product on the market and must be the first such authorisation for its particular territory.
  
  Community rights
  
  EU Trade Marks (EUTMs) and Registered and Unregistered Community Designs no longer have effect in the UK. The UK Government has provided that with effect from the end of the transition period the UK will automatically create a comparable UK trade mark for every registered EUTM, at no charge. The same will apply for Registered Community Designs (RCDs). However, this will not apply to pending EUTM applications, so companies with pending applications should apply to register a comparable UK trade mark in the 9 months after exit day to benefit from the same filing date as the related EUTM application.
  
  Unregistered Community Designs (UCDs) are being treated in a similar manner with those in effect before the end of the transition period having become supplementary rights from 1 January 2021, granting them protection for the remainder of their term. UCDs will now only secure a right at first disclosure where they are disclosed, those disclosed first in the UK will secure the new UK supplementary right while those disclosed first in the EU will secure the UCD right.
  
  Therefore, there is technically no need for companies with existing EUTM and RCD registrations to refile for equivalent registrations in the UK, as comparable UK registrations have arisen automatically. However, for new filings, companies are advised to dual-file in the EU and UK. As stated above, this is because EUTM applications which were pending at the end of the transition period will need to be re-filed in the UK anyway. For UCDs it may be appropriate in some cases to simultaneously disclose designs in the UK and EU to try to obtain protection across both jurisdictions. Rights owners should also review the following:
  
  
• Whether they have any ongoing proceedings before the EUIPO based on a UK right: actions which are only based on UK rights as these will have automatically closed; and parallel actions against the new comparable UK trade mark will need to be brought.
  
  
• Whether their existing EUTM legal representatives will remain entitled to represent them before the EUIPO after Brexit. Bird & Bird will be able to represent clients before both the UK and the EU IPOs.
  
  
• Their broader enforcement strategy: a new pan-EU injunction will not now cover the UK and will not be available in the UK, meaning both EU and UK proceedings will need to be brought to cover all of Europe.
  
  
• Whether they have an EU customs notice (“Application for Action”) in place which was filed via UK Customs: these will fall away and need to be renewed/re-filed via one of the remaining EU countries. A UK filing will also be needed.
  
  
• Whether they have hardware businesses affected by parallel imports between the UK and continental Europe: the ability for trade mark owners to prevent imports from one territory to the other will differ depending which way the goods are going.
  
  
• References to the EU in brand licence agreements will need to be considered.
  
  
• Whether they have a UK address for service: new applications to the UKIPO now require an address for service in the UK, Gibraltar or Channel Islands. Additionally, from 1 January 2024, any new proceedings launched in connection with UK rights granted on the basis of pre-existing EU rights will also require an address for service in the UK.

[1] https://www.ema.europa.eu/en/human-regulatory/research-development/clinical-trials/clinical-trial-regulation

[2] https://www.gov.uk/guidance/registration-of-clinical-trials-for-investigational-medicinal-products-and-publication-of-summary-results and https://www.gov.uk/guidance/guidance-on-substantial-amendments-to-a-clinical-trial

[3] https://www.gov.uk/guidance/how-the-mhra-will-manage-orphan-medicinal-products-from-1-january-2021-in-great-britain-gb

[4] https://www.gov.uk/government/publications/guidance-on-pharmacovigilance-procedures-in-the-event-from-1-january-2021/updated-guidance-on-pharmacovigilance-procedures#:~:text=The%20MHRA%20will%20retain%20responsibility,is%20England%2C%20Wales%20and%20Scotland.

[5] https://www.nice.org.uk/news/article/nice-is-getting-ready-for-the-end-of-the-transition-period-after-brexit