The Trade and Cooperation Agreement and its impact on IP, Pharma and Medical Devices

The final Brexit agreement, the Trade and Cooperation Agreement (the “TCA”) was agreed between the UK and the EU on 24 December 2020. Within this agreement are provisions that set out the standards expected to be recognised (mutually) between the EU and the UK in relation to intellectual property (including SPCs and trade secrets). There are some provisions concerning pharmaceutical regulation and product standards, but overall there is a lack of mutual recognition, with the consequence that, for both pharmaceuticals and medical devices, there are now effectively two separate regimes for the EU and the UK.

Intellectual Property

The provisions on IP match or exceed those for IP set out in the various treaties to which the UK and EU have acceded (such as WIPO, WTO and TRIPS agreements).  These IP standards are to be maintained as a minimum. The cited objectives and scope in relation to intellectual property (see Title V) indicate the aims behind these provisions which are to:

(a) facilitate the production, provision and commercialisation of innovative and creative products and services between [the UK and the EU] by reducing distortions and impediments to such trade, thereby contributing to a more sustainable and inclusive economy; and

(b) ensure an adequate and effective level of protection and enforcement of intellectual property rights.

The provisions are intended to “complement and further specify the rights and obligations of each [of the UK and the EU] under the TRIPS Agreement and other international treaties in the field of intellectual property to which they are parties” and do not “preclude either [the UK or the EU] from introducing more extensive protection and enforcement of intellectual property rights than required under [this section of the TCA] provided that such protection and enforcement does not contravene [those provisions]”. However, there are aspects of current UK and EU IP law, such as the dilution provisions in trade mark law, to which the agreement does not refer, instead referring to the Paris Convention provisions on the protection of well known marks. Whether this will be a point of future divergence remains to be seen.

Both the UK and the EU also have the ability to develop their own exhaustion regimes. The provisions on geographical indications (“GIs”) indicate that a mutual future scheme has not be agreed although a review clause on GIs has, which provides that the UK and EU may (if both parties agree it is in their interests) use reasonable endeavours to agree rules for the protection and domestic enforcement of their GIs.

The UK Government’s Summary document that accompanies the TCA (see here) states that the agreement “includes mechanisms for cooperation and exchange of information on IP issues of mutual interest” and “retains regulatory flexibility for each [of the UK and the EU], enabling the UK to develop an IP system in line with [its] domestic priorities“, thus enabling the UK to diverge where it so requires.

We have already commented on the changes to the UK IP regime in the firm’s guide to Brexit here (see the IP section).

The Regulation of Medical Devices and Medicinal Products

Medical devices: The TCA has a chapter (4) (under Trade – Title I) on eliminating unnecessary technical barriers to trade which deals with conformity of standards. However, this only provides for an approach under which each party can agree that its standards bodies (including those relating to medical devices) will conform with international standards and will work together to influence those and to “foster bilateral cooperation with the standardising bodies of the other Party“.

For medical devices, it had been hoped that there would be at least mutual recognition of conformity assessment under which each of the EU and the UK would recognise the other’s certification bodies. However, as things stand, although Great Britain will continue to accept CE marked medical devices until 30 June 2023 those devices certified by the UK and marked as UKCA (standing for UK Conformity Assessed, as discussed in more detail in our post here), will not mutually recognised by the EU.

Medicinal Products: For medicinal products there is a dedicated annex in the TCA, Annex TBT-2 – Medicinal Products (the “Medicinal Products Annex”), which applies to all medicinal products listed in its Annex C, namely:

  • marketed medicinal products for human or veterinary use, including marketed biological and immunological products for human and veterinary use,
  • advanced therapy medicinal products,
  • active pharmaceutical ingredients for human or veterinary use,
  • investigational medicinal products,

with this list being subject to amended by the UK-EU Partnership Council (the main governing body for the agreement and supplementing agreements).

The aim of the Medicinal Product Annex is to “facilitate availability of medicines, promote public health and protect high levels of consumer and environmental protection in respect of medicinal products”.  To help achieve this aim, the Annex provides for:

  • the mutual recognition of Good Manufacturing Practice (“GMP”) inspections and certificates, meaning that manufacturing facilities do not need to undergo separate UK and EU inspections;
  • the individual inspection, on notice, by the EU or UK of each other’s facilities); and
  • for the suspension of the mutual recognition arrangements.

Further, the TCA also states that the EU and the UK should work together to implement agreed international guidelines and that any changes to either the UK or the EU’s regulation regime should be on 60 days’ notice and be subject to discussion by a Working Group on Medicinal Products, which will be established to enable mutual consultation. This Working Group on Medicinal Products will be under supervision of the Trade Specialised Committee on Technical Barriers to Trade, and will monitor and review implementation and ensure the proper functioning of the Medicinal Products Annex. It is noteworthy that the Medicinal Products Annex is specifically excluded from the TCA’s disputes mechanism, however, through its role in facilitating discussions and functioning as an appropriate forum for issues relating to Medicinal Products, it is hoped that it will be a sufficient mechanism to deal with any concerns.

When considering the confidentiality of information supporting applications for marketing authorisations (“MAs”), regulatory protection of pharmaceutical products, and Supplementary Protection Certificates (“SPC”) it is noteworthy that this is not included in the Medicinal Products Annex, but is included in the IP section (Title V) of the TCA.

  • In relation to regulatory data protection generally, the TCA requires that both the UK and the EU ensure that commercially confidential information submitted to obtain an MA is protected against disclosure to third parties, unless there is an overriding public interest or steps are taken to ensure the data is protected from unfair commercial use.
  • For the regulatory protections of data and market exclusivity, the TCA provides that, subject to any international agreement to which both the EU and the UK are party, and without prejudice to any additional periods of protection which either party may wish to provide for in its domestic law, these regulatory protections will be “for a limited period of time to be determined by domestic law”. This allows each of the UK and the EU to determine the length of such regulatory exclusivities under their own regulatory regimes.
  • For SPCs, the TCA records the agreement of both the UK and the EU to provide for further patent protection to compensate for the impact of regulatory administrative procedures but, again, the length of time is not stipulated.

The effect of these provisions is that they provide some comfort that these valuable forms of protection for medicinal products will be maintained by both the UK and the EU.

For detailed commentary on the new regulatory position for Pharma in the UK, and the impact on IP rights generally, see our series of posts on the HSF Intellectual Property Notes blog here.

Other provisions relevant to the pharmaceutical and medical device industry

The TCA also has provisions relating to the UK’s continued participation in EU programmes and on UK / EU cooperation on “serious cross-border threat[s] to health that are relevant for the pharmaceutical industry.

  • Subject to the UK making financial contributions, Part 5 of the TCA includes agreement on the UK’s continued participation in EU programmes, including the EU’s research and innovation funding programme, Horizon Europe.
  • UK / EU cooperation on serious cross-border threat[s] to health is covered by the TCA including agreement between the UK and the EU on emergency relief in relation to importation requirements, tax and road transport exemptions, and agreement to cooperate in relation to international health security systems.

Future developments

Although tariff free and quota-free trade has been agreed, there is little mutual recognition of regulatory provisions. This may not be the end of negotiations, with automatic reviews every 5 years written into the TCA and termination possible on 12 months’ notice.  See the HSF Brexit blog for further information, and our initial comments here.

Key contacts and authors

Jonathan Turnbull

Jonathan Turnbull
Partner, London
+44 20 7466 2174

Rachel Montagnon

Rachel Montagnon
Professional Support Consultant, London
+44 20 7466 2217

George McCubbin

George McCubbin
Senior Associate, London
+44 20 7466 2764

Priyanka Madan

Priyanka Madan
Associate - London
+44 20 7466 2986

The Italian medicines agency AIFA opens a public consultation on the draft guidelines for the preparation of the dossier supporting a price and reimbursement application

This is the last step before the implementation of the new procedure for the price and reimbursement negotiation set out in the Decree on price and reimbursement negotiation of 2 August 2019.

The Italian Medicines Agency (AIFA) has launched a one week public consultation, closing 30 September 2020, on the draft “Guidelines for the preparation of the Dossier supporting the price and reimbursement application” (the Guidelines), i.e. draft guidelines that set out, in practice, the information and documentation that pharmaceutical companies will now be required to submit before AIFA to support their price and reimbursement applications.

The Guidelines under consultation

The Guidelines under the consultation implement the long-awaited Decree of 2 August 2019 issued by the Ministry of Health and the Ministry of Economy and Finance (Decree on price and reimbursement negotiation) that updates the previous system introduced almost 20 years ago by Decree no. 3/2001 of the Inter-ministerial Committee for Economic Planning (CIPE) and set out new rules and procedures for to be followed by the MA holder before AIFA to receive a reimbursement status for their product and to negotiate the price as reimbursed by the National Healthcare System (NHS).

This public consultation is the final step before the implementation of the new legal framework. The Decree on price and reimbursement negotiation will  come into force at the end of the public consultation and at the end October 2020, AIFA will release the final version of the Guidelines.

The new procedure for the negotiation with AIFA on price and reimbursement 

To summarise, under the new procedure set out by the Decree on price and reimbursement negotiation, there will be a unique 180-day procedure for the negotiation of the price/reimbursement which applies to all medicinal products for which an MA has been granted, either through a national, decentralised, centralised or mutual-recognition procedure. The price negotiated with AIFA will generally remain in effect for 24 months and will be subject to renewal for a further 24 months, unless the MA holder or AIFA propose amendments to the terms of the agreement prior to the revised term of 60 days before its expiry. Otherwise the price agreed will remain valid for a further 24 months.

AIFA will be entitled to start the procedure, without any input from the MA holder, if:

(i) the price of the product has never been negotiated with AIFA;

(ii) if the previous negotiation failed hence the product has been put among the not-reimbursed medicinal product (i.e. in Class C); and

(iii) most importantly, if the reimbursement of the product has a significant impact on the NHS expenditure or the lack of reimbursement has an adverse impact on the possibility to prescribe the medicinal product at issue.

Pursuant to the Decree on price and reimbursement negotiation,  AIFA can also trigger a price revision where there is a medium-term change in the market that could lead to an excessive increase in the level of use of the drug or could make the cost of the drug excessive compared to existing alternative medicines. AIFA can commence the pricing review procedure also in the event there is new evidence on the efficacy and safety of the drug showing a substantial reduction in the clinical benefits estimated at the time of negotiation, as well as in the event of a clear shortage of the drug on the Italian market.

In all other cases, the price and reimbursement negotiation will be left to the initiative of the MA holder who is required to submit a Dossier with documents and information which are specified by the Guidelines under consultation. The final decision of AIFA will ultimately depend on the information and documentation which the applicant MA holder will be able to submit.

For example, the revised procedure entails a preliminary phase before the Technical and Scientific Committee (CTS) that must give an opinion on the “added clinical value” of the product with respect to the available treatment or the therapeutic alternatives that are taken as a benchmark – the so called “comparator medicinal products”.

This CTS assessment is crucial. Indeed, if the CTS is not satisfied, it may introduce limitations regarding reimbursement and/or give a negative opinion. In this case, the product will automatically be put in the “class C” category for non-reimbursed products unless the MA holder sets the same price or lower level than that of the cheapest comparator medicinal product, or it is able to demonstrate a specific advantage for the NHS.

The assessment is carried out on the basis of any previous evaluations made at EU level, following a meeting with the MA holder (named “scoping meeting”) if needed, but ultimately and mainly on the basis of the information disclosed in the Dossier.

The draft Guidelines under consultation detail the documents to be included in the Dossier, the MA holder must disclose specific information, some of which may be extremely confidential. For example, the MA holder must disclose the price or discount obtained in another Member State. Such information may be disclosed only if it is covered by a NdA agreement.  The identity of the counterparty and the expiry date of the agreement must nevertheless be disclosed.

The MA holder does not have the option to refuse disclosure of the requested information, even if commercially relevant or confidential.

Moreover, according to the negotiation procedure, when the CTS assessment is positive, the negotiation progresses before the Price and Reimbursement Committee (CPR) for final agreement on price and reimbursement which takes into account some fixed criteria, including the sales volumes, any public R&D subsidy received and/or ad hoc discount granted to the NHS. The outcome of this phase also largely depends on the information disclosed by the company.

Pursuant to the draft Guidelines under consultation, in order to support its price and reimbursement application during this phase, the MA holder must disclose some highly confidential information: for example, specific annual reports regarding sales data, revenues and marketing expenses. Moreover, with respect to public R&D subsidy, the MA holder must specify the total amount received, if there are any IP rights arising from said R&D activity (even if not related to the product at issue) and if so, the patent details such as the number patent and the identity of the patent owner.  Moreover, the MA holder must provide information on any pending patent rights protecting the product. In this case, the information to be disclosed under the consultation draft of the Guidelines is of an even more sensitive nature: for each “patent right that is relevant for the market exclusivity of the medicinal product at issue”, the MA holder must disclose, in addition to general information such as expiry date, also information potentially confidential, such as any patent licence or any action pending or settled regarding this right.

Last call for companies and stakeholders to comment

If these draft Guidelines are implemented, in conducting its assessment and ultimately in setting the price and reimbursement , AIFA will rely heavily on the extensive and often confidential or commercially sensitive information that will need to be submitted by the MA holder in the dossier. The importance of the current public consultation opened up by AIFA is therefore clear. This is the last occasion for companies and stakeholders to negotiate the documents and information that AIFA would be entitled to request and, ultimately, to safeguard the companies’ confidential and commercially sensitive information.

For more information on AIFA’s public consultation or on the price and reimbursement procedure set out by Decree of 2 August 2019, do not hesitate to contact the authors.

Authors

Laura Orlando

Laura Orlando
Partner, Milan
+39 02 0068 1351

Martina Maffei

Martina Maffei
Senior Associate, Milan
+39 0236021388

 

 

 

Update on medicines and medical devices regulation in the EU and the UK and the impact of COVID-19

Two important pieces of medicines and medical devices regulation are currently pending in the UK and the European Union: in the UK, the Medicines and Medical Devices Bill (the UK Bill), and in the EU, the Medical Devices Regulation (the EU Regulation on Medical Devices). COVID-19 has also had an impact, with the EU Regulation on Medical Devices, which was due to start to apply to medical devices on 26 May 2020, having its date of application postponed by the EU for one year, until 26 May 2021, so as to avoid any extra burden on manufacturers during the current pandemic.

The UK Bill

The UK is currently in a transition period following Brexit, which ends on 31 December 2020. During this period medicines and medical device regulation will remain aligned with the EU. However, following the transition period, the UK will not be able to update its regulatory schemes for medicines and medical devices – as it currently relies on legislation such as the European Communities Act 1972 for amendments. The UK Bill therefore delegates powers to update the existing regulatory frameworks across three areas: human medicines, veterinary medicines and medical devices.

The UK Bill was introduced into the UK House of Commons on 13 February 2020 and, although it was passed at second reading on 2 March 2020, further progress has been postponed in light of the Covid-19 pandemic. It is proposed that, when the Public Bill Committee reconvenes, it reports back on the UK Bill by 11 June 2020.The aims of the UK Bill are fourfold:

  1. Providing means to depart from EU rules and regulations in the future;
  2. Ensuring that the regulations can be easily amended through delegated powers without having to bring a new bill before the House of Commons ever time a revision is desired, allowing the regulations to be flexible and responsible;
  3. Strengthening patient safety by strengthening the Medicines and Healthcare Products Regulatory Agency (MHRA), the agency that regulates medicines and medical devices in the UK, including providing it with powers that were not available under the EU such as the registration of medical devices; and
  4. Striking the balance between patient safety and capturing the benefits of innovation, including through the conduct of clinical trials in the UK.

During the second reading, the UK Secretary of State for Health and Social Care, Rt Hon Matt Hancock, suggested that the new rules and regulations could include:

  • Requiring a digital version of product information leaflets for human medicines;
  • Removing the barriers to hub-and-spoke dispensing for smaller independent pharmacies;
  • Permitting prescribing by healthcare professionals such as paramedics and midwives;
  • Creating a compulsory register of medical devices in the UK; and
  • Granting the MHRA power to disclose safety concerns about a medical device to the public.

The EU Regulation on Medical Devices

In April 2017, the EU Regulation on Medical Devices was adopted (Regulation 2017/745 on medical devices), which, together with Regulation (EU) 2017/746 on in vitro diagnostic medical devices, will replace the two existing directives that have been in place for over 25 years, the Medical Devices Directive and the Active Implantable Medical Devices Directive. Although the EU Regulation on Medical Devices was supposed to start to apply to medical devices later this month, its application has been postponed by one year until 26 May 2021, as adopted by the European Parliament on 17 April 2020, so as not to distract from the Covid-19 relief effort. The effective date of the in vitro diagnostic medical devices regulation (2017/746) remains 26 May 2022.

The EU Regulation on Medical Devices aims to improve the safety, transparency and traceability of the regulatory system presently in place in the EU, along with ensuring that it can quickly respond to changes in the field of medical devices.

Key changes that will be brought about by the EU Regulation on Medical Devices include the creation of a broader European database on medical devices (Eudamed), which will contain different modules on actors, Unique Device Identification (UDI) and devices, notified bodies and certificates, vigilance, clinical investigations, performance studies, and market surveillance. Under the new UDI system, a unique identifier will be assigned to and marked on devices, which will improve the traceability of devices, reduce medical errors and fight against falsified devices.

Authors

George McCubbin

George McCubbin
Associate (Australia)
+44 20 7466 2764

Jonathan Turnbull

Jonathan Turnbull
Partner
+44 20 7466 2174