Life sciences A to Z - N is for No Deal Brexit

Life sciences A to Z - N is for No Deal Brexit

Life Sciences A to Z - N is for No Deal Brexit

Contractual relationships in the life sciences sector

With no sign as yet of a successfully negotiated Free Trade Agreement (FTA) with the EU and time rapidly running out to in which to agree one, there remains an increasingly likely possibility that the UK will leave the transition period on “no deal” terms.  

If this is the case, some of the key implications for businesses in the life sciences sector would be as follows:

  1. Mutual Recognition – as discussed in our previous article (link here), the negotiation of a Mutual Recognition Agreement (MRA) is inexorably linked to the wider FTA negotiations with the EU. The “no deal” position would mean inter alia no mutual recognition of Good Manufacturing Practice (GMP) inspections, batch testing results and limits to information sharing.
     
  2. Trade – many pharmaceutical products and their constituent elements will attract tariffs on import and export when trading with the EU. Trading on World Trade Organisation (WTO) rules will increase the possibility of disputes, trade wars and generally greater uncertainty.
     
  3. Customs procedures – trade in goods will be subject to a multitude of customs declarations, including those relating to origin, safety and value. This will increase costs for businesses at the border and lead to delays in transit of goods, which initially after 1 January 2021 have the potential to be significant.
     
  4. Export Controls – the need to comply with two regulatory regimes in relation to the export of controlled substances will increase the regulatory and financial burden for businesses in the highly regulated life sciences industry.
     
  5. Regulatory Regimes – dual regulatory systems in the UK and EU will mean duplicated costs in registration, assessment and authorisation procedures. Regulatory divergence in the future will likely exacerbate this position.
     
  6. Talent – with decreased market access, the UK’s position as a life sciences hub in the EU could diminish, and businesses may find it harder to attract overseas talent owing to tighter immigration controls.

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