Out-Law / Your Daily Need-To-Know

EU-UK trade: life sciences companies face dual regime

Out-Law Analysis | 08 Jan 2021 | 4:41 pm | 4 min. read

Additional regulatory hurdles now apply to manufacturers of medicines and medical devices that want to place products on both the EU and UK markets in spite of the recent agreement of a new EU-UK trade deal.

Despite industry calls for mutual recognition of regulatory standards to be provided for under the new trading arrangements, there are only limited provisions to this effect. This means pharmaceutical companies and medical device manufacturers now face a dual set of requirements in some areas. Here we take a look in more detail at what the new trade deal means for life sciences companies.

General provisions

Trade between EU member states and the UK is now governed by the EU-UK Trade and Cooperation Agreement, which took effect after the Brexit transition period expired on 31 December 2020. The agreement contains a number of general provisions on regulation and regulatory practice.

The agreement, for instance, enables both the EU and UK to determine distinct approaches to good regulatory practices. It preserves their ability to set their own regulatory framework and achieve their own particular regulatory outcome.

When setting new regulatory measures, both the EU and UK must, at least annually, disclose planned major regulatory measures that they reasonably expect to propose or adopt within a year, conduct a public consultation on them, and endeavour to consult each other on proposals to introduce significant changes to technical regulations or inspection procedures. 

The agreement allows parties to engage in regulatory cooperation activities on voluntary basis, and also provides for cooperation to foster the introduction of internationally agreed standards.

Both the EU and UK must give notice to the other of changes to existing regulatory frameworks and look to international standards as a starting point for new regulation. Where either side decides to deviate from international standards, justification must be given to other party.

Medicinal products

In practice, concrete provisions around mutual recognition of regulatory standards relevant to medicinal products are contained within a short Annex to the agreement. This provides for:

  • Agreement to recognise Good Manufacturing Practice (GMP) inspections carried out by either party and official GMP documents issued by either party, though official documents could be rejected by the other party under certain circumstances;
  • Both parties to provide notice before changing GMP requirements and commit to engage within the Working Group on Medicinal Product when a change to GMP requirements would impact the other party’s ability to recognise inspections or accept GMP documents;
  • Mandatory consultation with each other on changes to technical regulations and inspection procedures.

The mutual recognition provided for in the agreement is beneficial for manufacturers, who will not need duplicative inspections in relation to, for example, manufacturing sites in Europe that are manufacturing medicinal products intended to be placed on the UK market.

Whilst this recognition of GMP inspections and related documents issued is good news for manufacturers of medicinal products, the mutual recognition agreement between the parties does not go as far as industry had pressed for.

For example, the agreement does not provide for mutual recognition of batch testing and release activity, meaning that manufacturers will need to undertake these activities in a duplicative manner. If the product is manufactured in the UK and to be placed on the market in Europe, the importer will need to undertake batch testing and release in Europe in addition to those activities having been undertaken prior to release of the product into the UK market, on top of their other import activities. 

Medical devices

In relation to medical devices, there are no provisions in the agreement for mutual recognition of standards. This means manufacturers will need to navigate both the EU and UK regimes in order to place their products on the market in both jurisdictions.

Other relevant provisions for life sciences

Regulatory data protection

Under the agreement, both the UK and EU must provide a period of data protection in relation to data submitted to support an application for marketing authorisation for a medicinal product. This is known as regulatory data protection. It stops the clinical trial data relied on by the originator for the purpose of obtaining a marketing authorisation being relied on by another manufacturer in obtaining their own marketing authorisation during the period it applies.

The provisions on regulatory data protection reflect the current position in both EU legislation and the amended Human Medicines Regulations in the UK. It is also in accordance with international practice protecting data submitted for marketing authorisation applications. 

The agreement is not specific on how long such period of protection should be, however, currently regulatory data protection applies for eight years for medicinal products in both the EU and UK.

Intellectual property rights

The agreement contains broad provisions in relation to intellectual property (IP). Of particular interest to life sciences companies, it provides that supplementary protection certificates (SPCs) should be provided by each party to the agreement to compensate for time lost from an effective IP protection period through undertaking administrative procedures necessary to bring medicinal products to market. However, the terms and conditions of such certificates, including their length is for each party to determine. Currently, in Europe, SPCs can extend monopoly rights applicable to medicines for up to a further five years following the expiry of the basic patent for that medicine.

In relation to exhaustion of IP rights, each party is free to determine its own position. At present, the exhaustion of rights is imbalanced.

The UK has initially elected to recognise that the first placing of products on the market in the European Economic Area (EEA), and not just within the UK market, will exhaust the IP rights in those products. This means that those IP rights cannot then prevent the subsequent sale of those products in the UK. However, the EU position does not mirror this, meaning that businesses that place their products on the UK market will not be considered to have exhausted the IP rights for those products and will be able to rely on those IP rights to prevent the resale of those goods on the EU market. The UK is due to consult on what the UK permanent position should be concerning exhaustion of rights in early 2021.