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Ireland's pharma-chemical sector needs protection from Brexit, says Henry

Out-Law News | 19 Jun 2018 | 3:13 pm | 2 min. read

Ireland's pharmaceutical and chemical businesses need to be shielded from the worst potential impacts of Brexit as a result of the sector's importance to the country's economy, a legal expert has said.

Dublin-based Ann Henry of Pinsent Masons, the law firm behind Out-Law.com, said a new report published by the Irish government highlighted the range of concerns pharma-chemical businesses in Ireland have about the UK's withdrawal from the EU.

The Department of Business, Enterprise, and Innovation (DBEI) asked 169 businesses across 15 sectors in Ireland to report their level of concern regarding the impact Brexit could have on their operations.

In its report, the DBEI said "it is clear that Irish businesses will face significant disruption from Brexit". The department said businesses it surveyed in the pharma-chemical sector "reported an above average level of concern about the impact of Brexit".

The top concern expressed by those businesses was with respect to Brexit's potential impact on their access to talent should existing reciprocal work, living, social and tax arrangements between Ireland and the UK be removed or changed.

The other main concerns of businesses in the sector were about potential restrictions on providing or receiving a service from or to the UK, the imposition of trade tariffs, a lack of mutual recognition of specifications or agreed technical specifications for both exports to the UK and imports from the UK, and the unilateral imposition of new or different product standards by the UK post-Brexit, according to the report.

Henry said: "The IDA in Ireland, which is the public body responsible for attracting in foreign direct investment, describes Ireland as having the ‘pharma factor’. The pharma industry in Ireland has been boosted by a stream of significant new investments in recent years."

"The statistics around Ireland’s pharma sector are impressive: nine of the world’s top 10 pharma companies have operations here; Ireland is the eighth largest producer and the fifth largest exporter of pharmaceuticals globally; 120 pharmaceutical companies have bases in the country; and 33 Irish pharma and biopharma plants are FDA-approved," she said. "Pharma-chemical products make up half the total goods exported from Ireland making the sector critical from an external trade perspective. For all these reasons it is vital that the sector is protected from any negative impact of Brexit."

"Clients in the sector are particularly concerned about divergence in technical specifications and products standards making product authorisation potentially more costly and protracted," Henry said. "In addition, Brexit throws up a raft of intellectual property law related issues such as customs watch notices and the future of the unitary patent and the Unified Patent Court. These are all concerns for the sector, as is the logistics and supply chain disruption Brexit creates for pharmaceutical and chemical businesses in circumstances where the UK has been effectively Ireland's 'bridge' to continental Europe."

The DBEI said it would push for an outcome from UK-EU Brexit negotiations "that preserves the greatest possible freedom to trade across the jurisdictions of the UK and Europe".

According to the report, many businesses in Ireland have not engaged in Brexit scenario planning.

The DBEI said: "Firms across sectors did not appear to be systematically taking action to mitigate the potential impact of Brexit: only half of the sectors were active in this regard, undertaking scenario planning, investigating alternative sources of inputs, reviewing product mix, assessing legal entity status changes and establishing UK companies. The remaining sectors reported few significant preparatory steps at this point."