No Business, Like Brexit Business

Editor’s Note: This article was published in Pharmaceutical Technology Europe’s July 2020 print issue.

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Brexit was formally finalized on 31 January 2020, indicating the departure of the United Kingdom from the European Union. The UK and EU are currently in the transition period of Brexit, set to end on 31 December 2020, during which time negotiations on the future relationship should be taking place.

However, Brexit talks have stalled, mainly as a result of the COVID-19 pandemic that has swept the world and is still a major cause of disruption for many industries, including the bio/pharma industry. In a recent news story from The Independent (1), it was revealed that the UK’s prime minister, Boris Johnson, and the European Commission’s president, Ursula von der Leyen, have agreed to intensify negotiations, so that an outcome, whether that be a deal or no-deal, may be achieved by the end of the 2020.

During the negotiations, many issues will be discussed, with perhaps the most pertinent to the bio/pharma industry including reduced friction trade, mutual recognition of certificates of good manufacturing practice (GMP), clinical trial cooperation, and access to talent-requiring certain allowances for immigrants. To learn more about how post-Brexit changes to immigration may impact the bio/pharma industry and whether there are any practical tips on how companies might be able to prepare for 1 January 2021, Pharmaceutical Technology Europe spoke with Tom Brett Young, partner, VWV law firm, and Peter Gough, vice-president, Pharmaceutical Services, EMEA, NSF Health Sciences.

Immigration changes

PTE: How might changes to the immigration system impact the bio/pharma industry, both in the UK and Europe, post-Brexit?

Brett Young (VWV): The biggest change will undoubtedly be the additional layers of complexity that bio/pharma businesses will need to navigate when employing workers from the other side of the Brexit divide.

Under free movement rules, European Economic Area (EEA) nationals working in the UK and UK nationals working in the EEA must be treated in the same way as citizens of that country (2). From 1 January 2021 the free movement rules will change.

In the UK, EEA nationals will need to hold an appropriate immigration status that enables them to work in the UK. EEA nationals, resident in the UK before 1 January 2021, will be able to apply under the EU Settlement Scheme (3), but those arriving in the UK from that date will need to apply for status that permits them to work. Most people coming to the UK for work will need an employer to sponsor their visa application, although this will only be possible where the role is skilled to level 3 or above on the UK’s Regulated Qualifications Framework (approximately A-Level) (4). This won’t be so much of an issue for EEA nationals coming to fill research, development, technical, and managerial roles in the sector, but for roles which are classified as lower skilled there are likely to be few if any options. UK nationals who want to work in an EEA country will need to satisfy the immigration requirements of that particular country in the same way that someone from outside of the EEA currently does.

In addition to the administrative hurdles employers and EEA nationals will need to overcome, sponsorship and visa applications come at a cost, with fees for UK immigration applications and employer sponsorship running into thousands of pounds.

Another issue will be that business trips by EEA nationals coming to the UK and UK nationals travelling to EEA countries will be governed by the respective immigration rules for visitors. In the UK, this means that some business activities that would have been possible for EEA nationals under free movement rules-such as filling a short-term vacancy and direct selling to the public-will now be prohibited. UK nationals travelling to Schengen zone countries will need to ensure that they adhere to the equivalent visitor rules, including the requirement that they do not spend more than 90 days within a 180-day period in the Schengen zone (5).

Practical provisions

PTE: Are there any practical tips and/or advice on how companies, both in the UK and Europe, can best prepare for a smooth transition on 1 January 2021?

Gough (NSF): I regret to say that at this time we simply do not know what the position will be for medicines moving between the UK and the EU from 1 January 2021, which makes giving specific advice virtually impossible. The trade negotiations between the UK and the EU are on-going and everything depends on the outcome of these talks. Reports are that the sides are still pretty far apart in their positions, so it is hard to know what, if anything, is going to be agreed. The position of Northern Ireland is one of the more contentious issues (i.e., is there going to be virtual border down the North Sea or not?) (6).

The UK government has said that they will not extend the transition period beyond the end of this year so there must remain the possibility of the UK making a no-deal exit. On the other extreme, harmony could breakout and the UK could secure a comprehensive agreement with the EU, but this does not appear to be likely given the present state of the talks.

In the event of there being no trade deal at the end of 2020, the EU has consistently stated that the UK would be treated as any other third country and all of the existing legal provisions that pertain to third countries will apply to medicines being imported from the UK (7).

The UK position on no-deal, as detailed in guidance issued through 2018/2019 (8) was more pragmatic in that it continued to accept testing and qualified person (QP) certification on medicines imported from the EU but would require companies to obtain separate UK marketing authorizations for medicines that were centrally authorized by the EU. This UK guidance was withdrawn after the political deal was concluded and the UK formally left the EU at the end of January 2020. One imagines that the same guidance could simply be re-issued at the end of 2020 in the event of no agreed trade deal. Alternatively, the UK could adopt a ‘tit-for-tat’ approach and mirror the restrictions imposed on medicinal products exported from the UK to the EU. However, this seems unlikely in the short term as it would risk there being shortages of medicines in the UK that the government would not want.

The other issue we face is that of the ability to physically move goods between the UK and the EU from 1 January 2021. Additional customs checks at the border seem to be inevitable and the risk that ports, like Dover, will simply grind to a halt is still real. 

Most companies made detailed provisions for coping with a no-deal exit from the EU in time for the original exit date at the end of March 2019 (e.g., re-routing supply chains, moving the holder of EU marketing authorizations, making arrangements for testing and QP certification of medicinal products to locations within the remaining 27 EU countries).

So, the best advice that I can give companies is to review the contingency plans that they made for the original 29 March 2019 deadline, which have yet to be implemented, to ensure they remain current and ready to be acted upon, if necessary, later this year. For example, the Medicine and Healthcare products Regulatory Agency’s no-deal Brexit guidance introduced a new good distribution practice responsible person for imports (RPi) role (9), so UK distributers need to ensure that they have a suitable person identified for this role should it be needed. As I have said throughout this protracted process; plan for the worst and hope for the best.

References

1. Andrew Woodcock, “UK and EU Agree to Intensify Trade Talks as Prospect of No-Deal Brexit Looms,” independent.co.uk, News Release, 16 June 2020.
2. EC, Directive 2004/38/EC of the European Parliament and of the Council (Brussels, 29 April 2004).
3. UK Government, “Apply to the EU Settlement Scheme (Settled and Pre‑Settled Status),” gov.uk, Guidance [accessed online 22 June 2020].
4. UK Government, “The UK’s Points‑Based Immigration System: Policy Statement,” gov.uk, Policy Paper, 19 Feb. 2020.
5. EC, “Visa Free Travel After Brexit: Council and European Parliament Reach Agreement,” consilium.europa.eu, Press Release, 3 April 2019.
6. UK Government, “The UK’s Approach to the Northern Ireland Protocol,” gov.uk, Policy Paper, 27 May 2020. 
7. EC, Withdrawal of the United Kingdom and EU Rules for Medicinal Products for Human Use and Veterinary Medicinal Products (Brussels, 13 March 2020). 
8. MHRA, “Further Guidance Note on the Regulation of Medicines, Medical Devices, and Clinical Trials if There’s No Brexit Deal,” gov.uk, Guidance, 3 Jan. 2019.
9. MHRA, “Acting as a Responsible Person (Import) After Brexit,” gov.uk, Guidance, 9 Oct. 2019 (withdrawn 13 March 2020).

Article Details

Pharmaceutical Technology Europe
Vol. 32, No. 7
July 2020
Pages: 33–34

Citation 

When referring to this article, please cite it as F. Thomas, “No Business, Like Brexit Business,” Pharmaceutical Technology Europe 32 (7) 2020.