Association of the British Pharmaceutical Industry (ABPI) – Written Evidence (JTN0018)

About the ABPI

The ABPI exists to make the UK the best place in the world to research, develop and use new medicines. We represent companies of all sizes who invest in discovering the medicines of the future.

Our members supply cutting edge treatments that improve and save the lives of millions of people. We work in partnership with Government and the NHS so patients can get new treatments faster and the NHS can plan how much it spends on medicines.

Every day, we partner with organisations in the life sciences community and beyond to transform lives across the UK.

1.    Executive Summary

1.1           The trade negotiations between the UK and Japan provide the opportunity for two leading life science countries to reach an agreement that goes beyond the European Partnership Agreement in terms of life science provisions.

1.2           In 2019, pharmaceutical products were the third highest goods in value terms exported from the UK to Japan[1].

1.3           The ABPI acknowledges the tight timelines to complete these negotiations and share the government’s priority to ensure both the free trade agreement and mutual recognition agreement (MRA) are in place by the end of the Transition Period to provide continuity for UK exporters.

1.4           The ABPI believes there are also opportunities to go beyond the EPA particularly in areas such as intellectual property to ensure that Japan offers UK life science innovators the same level of protection as Japanese life science innovators are afforded in the UK.

2. Introduction

2.1 Life sciences companies are critical for the health of our population, and the success of our economy. Operating across 860 sites in the UK, the pharmaceutical industry invests more than any other sector in R&D in the UK, this was worth £4.5 billion in 2018[2].

2.2 The sector employs 63,000 people across the UK, with 24,000 dedicated to R&D, and[3] is six times more productive than the UK average manufacturers, at £330,000 GVA[4]. It is a critical stabilising sector in a recession hit economy and remains central to any long-term economic recovery centred on innovation, productivity and high-skilled, quality jobs.

2.3 In 2019, the UK exported £23.3Bn worth of pharmaceutical goods, 3.3% (£0.76Bn) of which were to Japan[5] making pharmaceutical products the third highest good in value terms exported from the UK to Japan[6].

2.4 The ABPI welcomes the opportunity to submit this evidence to the House of Lords International Agreements Sub-Committee inquiry on UK - Japan trade negotiations. We have focused our response on the questions most relevant to the life science sector and would be pleased to follow-up with the committee on any relevant issues not addressed by this paper.

Response to questions on context of the negotiations and the UK’s approach

3 (Q1.) Does the Department for International Trade (DIT)’s strategic approach, published on 13 May 2020, set out the right objectives for negotiations?

3.1 In the Department for International Trade’s summary of responses to its consultation, it was noted that the following priorities for the life science industry have been raised:

3.2 Regulation and standards

• the UK should secure mutual recognition of conformity assessment and reduce duplicative regulatory requirements that impede access

3.3 The ABPI was pleased to note the government’s commitment to” seek arrangements to make it easier for UK manufacturers to have their products tested against Japanese rules in the UK before export”. We do believe there is scope to enhance regulatory cooperation on medicines between the UK and Japan by negotiating ‘hooks’ in the agreement for future discussions around regulatory collaboration.

3.4 Intellectual Property:

•                     the duration and scope of Supplementary Protection Certificate (SPC) protection should be in line with UK standards
•                     the term of data and market exclusivity for pharmaceuticals should be extended in Japan, in line with UK standards
•                     provisions to make processes easier for SMEs to be granted patents
•                     the UK should ensure continued membership to the European Patent Convention (EPC), a non-EU agency, and the Unified Patent Court Agreement (UPCA)

3.5 The ABPI was pleased to note the government’s commitment to negotiating provisions that are consistent with the “UK’s existing international obligations, including the European Patent Convention (EPC)” but we are still unclear whether the UK plans to negotiate IP provisions so that Japan offers UK innovators the same level of protection that Japanese innovators are afforded in the UK.

4. (Q3.) Although both countries have expressed their aspiration for reaching a comprehensive FTA before the end of the Brexit transition period, they face significant time constraints Japan has suggested that both sides would need to limit their ambitions in negotiations. In what circumstances might the UK and Japan pursue a limited version of a trade agreement, which covers only a handful of industries, instead of a comprehensive FTA? What areas are most likely to be included in any initial ‘mini-deal’?

4.1 The ABPI membership includes both UK companies exporting to Japan and Japanese companies investing in life science R&D and manufacturing in the UK and so we have a strong interest in the trade negotiations with Japan.

4.2 We share the government’s ambition to ensure both the free trade agreement and mutual recognition agreement (MRA) are in place by the end of the Transition Period to provide continuity for UK exporters. In particular, the MRA is a priority as it would see both sides accept each other’s drug safety testing and inspections before export– alongside any agreement in order to avoid unnecessary duplication, disruption to supply chains or delays to patient access to medicine.

4.3 If possible, there is also the opportunity to further expand on the current MRA to also include investigational medicinal products, an active ingredient or placebo which are imported to be tested or used as a comparator in clinical trials and for the UK and Japan to negotiate ‘hooks’ in the agreement for future discussions around regulatory collaboration

4.4 However, whilst acknowledging the very tight timelines for the completion of negotiations between the UK and Japan, we would like to flag two other areas of priority for our industry. These include:

4.5 Strong intellectual property protection to promote innovation and trade

4.6 In the current EU-Japan FTA, the agreed provision on the treatment of test data in marketing approval procedure (RDP) is:

“Each Party shall prevent applicants for marketing approval for pharmaceutical products which utilise new active pharmaceutical ingredients from relying on or referring to undisclosed test or other data submitted to its competent authority by the first applicant for a certain period of time counted from the date of approval of that application. As of the date of entry into force of this Agreement, such period of time is stipulated as being no less than six years by the relevant laws and regulations of each Party”

4.7 Japan’s system of post-marketing surveillance currently has the effect of providing protection that is similar to eight years of RDP. In the UK RDP means that, after an innovator files for a license, a generic competitor cannot have access to the clinical data on which the licensing application was made, also for eight years. However, in addition to this there is a two year period where generic competitors can rely on the innovator’s data to make their own licensing application, but are not allowed to market their product. An additional (maximum) single year may be granted if the innovator secures a new licensed indication bringing significant clinical benefit to patients compared to existing therapies.

4.8 At a minimum the ABPI calls for the strengthening of RDP in Japan in line with current UK standards.

4.9 We would appreciate the UK government continues with Japan on these issues through the Embassy network supporting the discussions that we know the US and EU are actively engaging on.

28 August 2020