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The impact of Brexit on the pharmaceutical industry

The impact of Brexit on the pharmaceutical industry

The impact of Brexit on the pharmaceutical industry

04.07.2016 BE law

Following the Brexit referendum, the UK should, in principle, notify its decision in the coming months to withdraw from the EU as provided by Article 50 of the Treaty on the European Union. According to Article 50, the Treaties will cease to apply to the UK from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification—unless the European Council, in agreement with the UK, decides to extend this period unanimously.

As far as the pharmaceutical industry is concerned, pricing and reimbursement of medicinal products will not be affected in the other Member States as this is a matter of national competence. However, the Brexit will have many consequences for the pharmaceutical industry, including:

  • EMA location;
  • Effect of UK marketing authorizations from both a regulatory and IP (i.e., SPC) standpoint;
  • Impact on pharmaceutical patents in the context of the Unitary Patent (UP) and the Unified Patent Court (UPC);
  • Loss of influence from the UK in the context of future EU legislative developments.  
  1. The first point is the most trivial and relates to the fact that in an EU pharmaceutical environment where product approval increasingly requires the use of the centralized procedure, maintaining the European Medicines Agency in London seems to be an extremely difficult challenge at first sight, to say the least.
     
  2. The second point relates to the effect that UK marketing authorizations will have, notably in the context of the SPC. Before the UK withdrawal becomes effective, the rights triggered by or the effect of a UK marketing authorization (e.g., when the first EU marketing authorization required in the context of the SPC was granted by the MHRA) will remain unchanged in all the Member States of the European Union.  However, one will have to clarify how these rights would or could be maintained after the withdrawal of the UK becomes effective. It is certainly conceivable that the effect of the previous UK marketing authorizations will be maintained from both a regulatory and an SPC standpoint.

    More importantly, one should decide on what role and effect of the marketing authorizations granted by the MHRA after the UK withdrawal has become effective. The withdrawal agreement might stipulate a situation that is similar to what applies in the context of the EEA (with Norway, Iceland and Lichtenstein). Then a UK marketing authorization can still be the trigger of the calculation of the SPC duration while the centralized marketing authorizations granted by the European Commission would be recognized in the UK, etc.  But other systems are possible, e.g., Swiss marketing authorizations are currently granted independently of EU ones.
     
  3. With regard to pharmaceutical patents, the London branch of the Unified Patent Court (UPC) was supposed to tackle all pharmaceutical patent disputes covered by the Unitary Patent (UP). This encompasses also SPC, Bolar exemptions, and experimental use exemptions. Therefore, the survival or the delay in the effective entry into force of the UPC as well as its location is now becoming a question to be tackled.
     
  4. Last but not least, it will be far more difficult for the UK to influence EU legislative developments like it has today. The innovative pharmaceutical industry will lose an efficient ally in an increasingly difficult political environment. And this happens at the very moment the European Commission has initiated an in-depth review of the SPC system in which the role of other incentives (e.g., orphan and data and market exclusivity) will also be reviewed and compared.

    At the same time, the generic industry has now put forward its arguments for the introduction of a manufacturing waiver. Its objective is to allow—before the SPC expiry—the manufacture and stockpiling in the EU of generic products for export and sale in non-EU countries where the originator’s product is not or no longer protected by a patent or a patent-term restoration.

All these developments might ultimately result in a proposal to revise the SPC regulation in a process that should be finalized after the UK withdrawal.

In practical terms, pharmaceutical companies, both R&D-based and generic companies that market biosimilar and improved products, should monitor the foreseeable legislative developments resulting from the Brexit. They should adapt wherever possible and product-by-product their strategy on the basis of a combined regulatory and IP related approach.

 

To read more about Stibbe's Brexit team and other newsletters about the Brexit consequences, please click here.
 

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