30 August 2018

Preparing for a ‘no-deal’ Brexit

The government has recently published a series of ‘Technical Notices’ setting out how businesses should prepare for what the government hopes will be the unlikely scenario of a ‘no-deal’ Brexit. The first 25 notices cover a range of areas, including medical supplies, financial services, nuclear safeguards, farming and workplace rights. In this update we review some of the government’s proposed arrangements in the event of ‘no-deal’ for the exhaustion of IP rights, parallel imports, and the regulation of medicines, medical devices and clinical trials.

Marketing authorisations

The government’s fall-back position is that all Centrally Authorised Products (CAPs) will automatically be converted into UK marketing authorisations by a grandfathering procedure on March 29th 2019. All new marketing authorisation applications will have to be submitted to the Medicines and Healthcare products Regulatory Agency (MHRA) and undergo a national assessment.

The UK will no longer be a part of the EU centralised, mutual recognition and decentralised procedures for new applications. In the event of ‘no-deal’, all applications in progress under these procedures that will have not reached the decision phase will not be valid in the UK. However, the Notice indicates that the MHRA will take EU decisions into account where possible. All existing medicines that are authorised under either the decentralised or mutual recognition procedures before the UK exits the EU will not be affected as they already hold a national UK marketing authorisation.

Generic marketing authorisations and reference products

In the absence of a deal, the MHRA will not have access to the data provided in support of EU approved products. Therefore, any new generic marketing authorisation applications will need to be based on reference products that have already been authorised in the UK. This will undoubtedly be of concern to the generic pharmaceutical industry and health service providers relying on their medicines, in situations where there are no suitable reference products authorised in the UK. Existing marketing authorisations for generic products which are based on a reference product authorised in the EU would remain valid.

Data exclusivity

The Notice does not propose any changes to the data and market exclusivity periods for UK marketing authorisations. The start date of data or market exclusivity will be the date of authorisation in the UK or EU, whichever is earlier. This is a potential concern if a product is authorised in the EU before the UK, as it would result in a shorter period of protection once authorised in the UK. However, this may encourage pharmaceutical companies to make timely marketing authorisations applications in the UK.

Medical devices

In the event of no-deal, the UK will continue to recognise devices approved for the EU market and CE-marked. The UK will comply with all key elements of the Medical Device Regulation (MDR) and the in vitro diagnostic Regulation (IVDR), which will apply in the EU from May 2020 and 2022, respectively. However, formal UK presence at EU committees in respect of devices will end.

Clinical trials

The Medicines for Human Use (Clinical Trials) Regulations will continue to be in force after Brexit but the new EU Clinical Trials Regulation (CTR) 536/2014 will not be in force in March 2019 and so will not be incorporated into UK law under the terms of the EU (Withdrawal) Act 2018. However, the Notice states that in the event of no-deal, the UK will align where possible with the CTR as soon as it comes into force in the EU.

Parallel distribution and imports

Parallel imports of pharmaceuticals based on the concept of exhaustion of intellectual property rights are important to the generics industry and to the provision of healthcare services in both the UK and EU Member States. The guidance states that a no-deal Brexit does not mean that parallel imports of medicines will cease. Under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the UK may choose its own exhaustion regime. Therefore, the Notice states that the UK will unilaterally align to the EU/EEA exhaustion regime to provide continuity in the immediate term for businesses and consumers to ensure that the parallel importation of pharmaceuticals can continue following a no-deal Brexit.

This raises questions as to what will happen in the longer term and the nature of exhaustion regime ultimately adopted by the UK. For example, the International Trademark Association (INTA) has questioned whether the proposal for the UK to unilaterally align to the EU/EEA exhaustion regime would be appropriate if the UK does not remain in the EEA or in some kind of customs union with the EU. If the UK does not remain in either the EEA or a form of customs union with the EU, the UK Trade Marks Act will need to be amended to provide for a national exhaustion regime in the UK. Furthermore, as the proposed alignment will be undertaken unilaterally it does not mean that reciprocity would be given to parallel imports from the UK into the EU.

Data protection

Consistent with the pre-amble to the Notices, the Government appears to be taking a very cautious approach in its planning for a no-deal Brexit. Although the UK Government’s Notices should provide reassurance and practical assistance to businesses in the event of a no-deal Brexit, they do raise unanswered questions and uncertainties. For example, in the field of data protection, it is hard to understand why the government is preparing a technical notice on transfers of personal data when there should be no issues having made the General Data Protection Regulation (GDPR) part of UK law in the 2018 Data Protection Act (DPA). It may be that such a cautious approach has been adopted in this and other areas, in the expectation that the EU will issue a competence recognition of assistance in the ongoing negotiations.

The government’s technical notice concerning medicines, medical devices and clinical trials can be read here.