UK: Article 50 – Gearing Up For Brexit In Life Sciences

Last Updated: 25 April 2017
Article by Ronan Langford and Sara Ulrich

Time to act?

Since the UK voted to leave the European Union (EU), some eight months ago, the ongoing debate has been dominated by uncertainty - with limited guidance on how to plan for changes to come. While there has been limited appetite to act in the context of such uncertainty, the Prime Minister's decision to trigger Article 50 has now set the clock ticking.1

Since the UK's vote to leave the EU, Deloitte have run a series of Brexit Labs to understand the implications of Brexit for the life sciences industry.2 This week's blog highlights some of the insights identified, with some practical steps that could be taken in the coming months.

What do we know?

  • the triggering of Article 50 has brought clarity to the potential timeline to the point of exit by initiating the start of the formal two-year negotiation window; however, it is likely that new trading agreements will require a longer negotiation period
  • the UK Government is continuing to work with the UK EU Life Sciences Steering Group, which it established in July 2016, with an overarching objective to determine how to create a world-leading life sciences environment post-Brexit3
  • the Government's 'Plan for Britain', published in February 2017, outlines 12 negotiating objectives for exiting the EU - including making Britain 'one of the best places in the world for science and innovation'. It recognises the fundamental strength of the UK in this field, and expresses a desire to continue to collaborate with Europe on scientific initiatives4
  • in response to the UK setting out its negotiating position, the European Commission has published – the draft European Council (Art. 50) guidelines – which outlines the EU's negotiating position5
  • Deloitte research suggests that Brexit is a third order priority for many EU countries behind domestic political imperatives and continued EU cohesion.

Why plan now despite uncertainty?

Whilst nobody can predict the outcome of the next two years of negotiations, we can be sure that Brexit will require all organisations to take some big decisions. Some will require lengthy and complicated preparations, and for many, there will be advantages in thinking about this sooner rather than later. The key is to preserve decision-space for as long as possible by planning ahead.

Tackling uncertainty: planning for the maximum change

In order to address the uncertainty, the Deloitte Brexit Labs built and explored multiple scenarios with subject matter experts from across our Life Sciences and Healthcare Industry Team.

Our scenarios focussed on the:

  • exit deal
  • UK Government's strategy in response to the exit deal
  • EU's response to the UK Government's strategy
  • resulting impact on the four freedoms of the EU
  • future EU/ UK life sciences regulatory and commercial landscape.

When considering the exit deal, we used the maximum change scenario – using a World Trade Organisation (WTO) exit model – as the starting point, on the basis that if you prepare for the greatest change, implicitly you will cover less disruptive changes.

Some of the key challenges that will potentially impact life sciences organisations under the WTO exit scenario include:

  • some level of change to the regulatory alignment between the European Medicines Agency (EMA) and the Medicines and Healthcare product Regulatory Agency (MHRA) is inevitable; the maximum change would lead to a separate approvals process and separate labelling for the UK market, and difficulties including the UK as a medical trial destination (especially if the UK can no longer access EU systems)
  • the introduction of WTO tariff rates between the UK and the EU
  • an EU Unitary Patent which does not include the UK, and the end of recognition of EU trade marks within the UK; ending parallel trade, increasing costs for brand owners, and introducing infringement risks
  • the loss of free movement of people, impacting cross-border talent acquisition and collaboration, with a particular concern for life sciences R&D
  • a reduction of UK R&D funding (due to exclusion from EU programmes such as Horizon 2020), and a reduction of EU funding (due to lost UK contributions).

So, what practical steps can organisations take now?

The above are just some of the possible impacts; so, what practical steps can organisations take now without regret? We consider that life sciences organisations need to think and plan now, so that if any of these impacts are realised, they would be able to implement mitigation actions at an accelerated pace. Actions include:

  • analyse the impact of separate approvals processes and labelling for the UK
  • develop assessment criteria that can be used on a case-by-case basis if a separate UK approvals process is required, to make cost-efficient launch decisions
  • analyse the impact of WTO tariffs on trade profitability and R&D efficiency, and conduct locational analysis to check if changes to supply chain would lead to savings (and be ready to implement at point of exit)
  • gather information on the organisations national status of current UK and EU workforce and talent pool
  • model the impact of the loss of the free movement of people
  • understand which existing EU R&D funding will be impacted and the possible consequences
  • strengthen existing relationships and identify new potential collaborators.

We have developed an interactive 'Playbook for Life Sciences' which can be used to customise a number of practical steps that organisations can take now. The fundamental premise underpinning this Playbook is that organisations who undertake more in-depth thinking and planning to uncover specific impacts and to create an actionable, timelined mitigation plan will be better prepared for the new world.

Footnotes

1 https://www.planforbritain.gov.uk/news/prime-ministers-letter-donald-tusk-triggering-article-50/?_ga=1.21564091.1687735642.1418210503
2 The Brexit Lab is a Deloitte construct that accelerates and structures the process of identifying and prioritising the possible impacts of Brexit, and helps participants to develop a flexible contingency plan (a timelined plan detailing the actions to take upon the materialisation of key triggers). It brings together the key people from an organisation contemplating the various scenarios with Deloitte subject matter experts, to drive cross-functional, robust thinking.
3 http://www.abpi.org.uk/our-work/uk-eu-life-sciences-transition-programme/Pages/default.aspx
4 https://www.gov.uk/government/publications/the-united-kingdoms-exit-from-and-new-partnership-with-the-european-union-white-paper
5 http://g8fip1kplyr33r3krz5b97d1.wpengine.netdna-cdn.com/wp-content/uploads/2017/03/FullText.pdf

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions