- Motion to Approve
- 4:44 pm
- Moved by
- That the draft Regulations laid before the House on 28 November 2018 be approved. Debated in Grand Committee on 14 January.
- My Lords, as with the previous instrument, this was the subject of a wide-ranging debate in Grand Committee on 14 January. Again, I wrote to noble Lords who spoke in that debate to respond to the points raised, and also placed a copy of my six and a half-page letter in the Library. Since the Grand Committee debate, I have held further helpful and constructive meetings with the BioIndustry Association and the ABPI. Let me make it clear that I value those regular contacts and the insight that they bring on behalf of this important industry. I will continue to have discussions with representatives from industry and hear their perspectives as we move forward. As Life Sciences Minister within the department, my door is always open.In my discussions with the life sciences sector, it has made clear the value and importance of supplementary protection certificates—SPCs—to the industry, and its concerns about the potential for those valuable IP rights to be affected by a no-deal exit. I hear and understand that. The only intention of this instrument is to fix what would break and to do so in a way that preserves the current operation of the law. We are considered to have one of the strongest IP systems in the world and the Government remain fully committed to maintaining that position. That is why we are preserving the status quo so far as possible in a no-deal exit. It is right that we continue to prepare for a no-deal scenario as long as that remains a possible outcome.One issue raised in Grand Committee, and addressed in my letter, dealt with the approach taken to consultation on this instrument. In my meetings with industry bodies, we had discussions on this point and on why the usual wide engagement by the IPO was not possible on this occasion. The withdrawal Act established the policy direction which this instrument follows: to preserve the existing law at the point of exit and maintain the status quo as far as possible, ensuring a smooth transition for business. As the Government’s consultation principles make clear, a consultation on a policy which is not changing would not be of benefit. Nevertheless, the IPO wanted to ensure that the drafting of the instrument achieved its aims, by getting external views. Therefore, it was decided, consistent with the constraints in place, to carry out a confidential technical review of the drafting. In addition to providing valuable feedback on the drafting, the participants also raised wider concerns, including on the issue of the SPC term.
- My Lords, I raised several concerns about this SI in Grand Committee, as the Minister recognised. As he knows, these were the result of briefings from the BIA and the ABPI, with which I am glad to say he has had further meetings. However, since his meetings both these organisations have provided me with further briefing about their continuing concerns.Before turning to these concerns, I will briefly place them in the wider context of the damage done by Brexit—and the Government’s conduct of it—to our highly successful life sciences industry. This damage could make Nissan and Sunderland look like small beer if we are not careful. From the Prime Minister down, the Government have shown a poor appreciation of the damage being done to this sector: the loss of the EU medicines regulator from the UK; the loss of investment opportunities in the UK; the missed opportunities for collaborative international joint research, development projects and clinical trials; the drain from the UK of talented overseas scientists; and the likely loss of a growing amount of our own homegrown scientific talent.To this litany of casual vandalism the Government have now added a statutory instrument which, if it were used in the case of our exiting the EU with no deal, would reduce the protection of exclusive intellectual property. The problem is caused by the SI’s approach to supplementary protection certificates—SPCs—which are a key part of the intellectual property protection framework for pharmaceutical research. SPCs are intended to give a period of exclusivity from inherent risks in the development of new pharmaceutical products. But the industry’s trade bodies—both the BIA and the ABPI—are convinced that, in the real world that they occupy, the SPCs as structured in this SI are fundamentally flawed.In their view—the exact opposite of the Minister’s—this flaw reduces the period of exclusivity for drugs authorised in the UK, because the start of the period for exclusivity in the UK is backdated to a drug’s earlier authorisation in the EU. They are losing a bit of their exclusivity period. The chief executive of the ABPI put this extremely well:
- My Lords, the noble Lord, Lord Warner, has expressed the impact on the life sciences industry extremely effectively and eloquently, and I do not wish to repeat anything of what he said. Quite apart from the damning quote from the chief executive, Mike Thompson, the key sentence that I saw in the ABPI’s briefing was:“The signal the Government has sent to global pharmaceutical companies large and small is that the UK will be less committed to IP protection after Brexit than it has been to date”.For a major industry to consider that seems extremely damning.As the noble Lord, Lord Warner, pointed out, the Minister said that it is correct to raise these issues and he is keen to start exploring them, so there is some intention now to have some consultation post the SI rather than proper consultation before it. I think we are looking forward to hearing a bit more of a concrete proposal from the Minister with regard to what precisely is planned.The Minister’s six and a half-page letter, as we must now call it, dealt with the question of participation in the unified patent court, as set out in the White Paper last autumn. I made the point in Committee that if the UP convention is ratified by Germany and comes into force ahead of our exit date, the UK will need to work out how to remain a member of the UPC or withdraw from the systems, which could have significant impacts on business. In that context, I questioned in Committee whether the UK will have to acknowledge the supremacy of EU law and the ECJ as part of the signing up process. In his letter, the Minister advises that,“when ruling on domestic cases, UK courts will not be bound to follow decisions of the UPC, or rulings of the European Court of Justice applied by the UPC”.The last time we discussed this SI, I brandished a 39-page opinion on the subject, so I am rather baffled by the advice that the IPO and the Minister have received in those circumstances, if we have signed up to the unified patent court agreement. I would very much like to hear a bit more clarification on that subject from the Minister.
- My Lords, this is another good debate on these issues. I will not fall out with the Minister about the length of his letter—we can brag about size elsewhere if we wish to—but it came out of my printer at eight pages. I leave that curious intellectual puzzle to him to sort out. Maybe there were other issues that had to be added in.The Minister could well have dealt with other matters, including various aspects of whether the Silhouette case would apply in this area of the law; one of the points raised in the correspondence was the question of whether Silhouette, which applies to one aspect of our intellectual property, in fact has resonance through its relationship to the other aspects of the IP world and will also be applied. However, that may be for the future.The noble Lord, Lord Clement-Jones, is right to raise questions about the unified patent court, which could change the game here. If the Minister is minded to confirm any of the points raised by the noble Lord, can he also confirm that premises for the unified patent court have been acquired in London? Are they fully available and ready to be moved into? We are expecting the courts to be operational very shortly, but it would be useful to have confirmation that this is still the case.
- 5:00 pm
- The issues have been well rehearsed. I am grateful to the noble Lord, Lord Warner, for continuing to press as to exactly what issues were raised by the consultation that did not happen, by the people who were not consulted and by the organisations which should have been consulted in order for us to have a better understanding of how this would play when the SI is made. It again raises the question of how consultation is done when there is a significant change in the law.
- This is the first of the two intellectual property SIs over which the Government have exercised their judgment to try to assist future negotiations and debates by finding an asymmetric solution. I will come back to this in the next SI. We should not take at face value the view that this would roll forward the exact situation that existed prior to our leaving on a no-deal arrangement. There are changes being made. They may be good and sensible, but they have not been subject to the sort of consultation and debate nor to the costings that would have been appropriate were this an ordinary situation.
- My Lords, I want to follow the remarks of the noble Lord, Lord Warner. It is deeply unsatisfactory that the only way we can know the interests of those most intimately affected is if an individual Member of your Lordships’ House relates conversations that they have had to this House. In Grand Committee, the noble Lord, Lord Warner, told us about conversations that he had had but which had not been published because there had been no formal consultation.The Minister said that he has met relevant stakeholders. We are grateful for that. I hope that, in his reply, he will clarify the issue about the duration of SPCs, particularly for the benefit of those of us who do not follow the detail of what is at stake. I take the noble Lord, Lord Warner, to be saying that a substantive change in the duration of SPCs will take place as a result of these regulations and that this will have a major impact on the industry concerned because of the protection of intellectual property. So this is not, as we have been told all along, a technical issue about rolling over existing regulations. It is a substantive change. This has never been clearly brought out in our proceedings.
- Just to be clear, the industry is saying that, because of the way in which the Government have drafted this SI, the period of exclusivity will be less than it would have been in the past. So there is a material change in the financial benefit through the period of protection that was previously given. The industry is worried not just about that aspect but about the signal it gives about whether the Government are going to move away from a gold-standard intellectual property framework. They are worried that this is the first step in this particular direction.
- I understand the significant point that the noble Lord makes.None of this came out in the Explanatory Memorandum’s summary of the non-existent consultation and secret discussions that took place. The only reason this has come before your Lordships is because of the successive conversations which the noble Lord, Lord Warner, has had with the industry. His point seems entirely reasonable. The industry is concerned as to what this means for the wider protection of intellectual property and the big impact it might have on investment in a crucial national industry. This is not a technical issue; it is fundamental. We were not alerted—in any part of the process leading to these regulations coming before the House—about any of these issues.The Minister said that, since the Grand Committee debate, he has conducted discussions with industry representatives. We should be grateful that, by calling attention to the lack of consultation, this encouraged the Government to engage in more formal consultation after the instrument was laid. In my day, good government involved consulting about instruments before they were laid, not afterwards. The noble Lord, Lord Warner, and I were in the ancien régime when there was Cabinet Office guidance on 12 weeks’ consultation and publication of consultation results to which the Government gave reasonable responses. In this national emergency, all this no longer applies.I should be grateful if the Minister could bring out precisely—because it is important that we have it in Hansard—what is the substantive change in respect of SPCs and what is in fact at stake in terms of the lesser protection that will be available for crucial intellectual property in the industry. It is still not clear to me from the remarks of the noble Lord, Lord Warner, but since he is doing such a good job of responding to the debate, he may be able to tell us the scale of the impact that this is likely to have. Are we talking about minor changes, because it is calculating differences in dates at which patents were granted, as I understand it, and whether European and UK patents are granted at different times under the new regime? I should be grateful if the Minister could say more and clarify more.
- My Lords, first, I repeat that we do not want to move away from the gold standard of IP that we have. Secondly, I make it quite clear that I regularly meet the two organisations referred to, the BIA and the Association of the British Pharmaceutical Industry. The chief executives of both those organisations sit on our Life Sciences Industrial Strategy Implementation Board, so I see them both regularly. I hope that we have a very good relationship and that full and frank discussion is always possible between me and them and between them and the department more generally.
- I just want to be clear to the Minister. What representatives of the industry are telling me in the letters and briefings they have sent is that they have interpreted the Government’s behaviour as meaning that they think that the Government is signalling that we are moving away from a gold standard of intellectual property protection.The reason they say that is that, in this particular case, we will now have two regulators—when we come out of the EMEA, we will have a UK and an EU regulator for pharmaceutical products. I cannot put it any more clearly than this. They are saying that, if you apply for authorisation of a drug under the UK regulator, the period of exclusivity should start from the date of authorisation; it should start not from any authorisation that may have been given by the EU regulator at an earlier date for the drug to be introduced in the EU but from the authorisation when the drug is authorised in the UK. I do not think that I can be clearer than that. There is clearly a fundamental difference of view between the industry and the Government on this issue. No amount of fine words from the Minister is going to conceal that.
- My Lords, if the noble Lord, Lord Warner, will allow me, I was trying to say that, first, I want to continue discussions with them and we will do that. I do not believe that we are as far apart as the noble Lord is suggesting; nor do I believe that we are undermining the gold standard in IP that we wish it to achieve.We do not want to do anything to undermine our large and successful pharmaceutical industry. It is one of the jewels in the crown, and has a turnover of £41.8 billion. I remind the noble Lord that it has seen a large amount of investment in research, particularly since 2016, and considerable new investment from abroad—again, since 2016. This is an industry that is flourishing and will continue to flourish. We believe that the level of investment within that industry that is supported by the SPC system, which ensures that British businesses are compensated for the period of patent loss protection while requesting market authorisation, is very important. Making sure that our law continues to work is therefore important.The noble Lord, Lord Warner, says that there is a flaw in the SI: he says that there is a policy change. There was considerable debate on the issue in Committee. As I said previously, I do not share the view that there is a policy change here. This instrument keeps in place the existing calculation of SPC duration. At present, it is calculated from the first market authorisation in the EEA, which includes the UK. The instrument ensures that the exact position remains in place after exit and the calculation is the same. It is precisely this kind of deficiency that the withdrawal Act gave Ministers powers to affect.The noble Lords, Lord Warner and Lord Adonis, then talked about the industry and said that it wants something different. The BIA and the other organisations representing pharmaceutical innovators would prefer the legislation to be changed so that the term of an SPC would be calculated based on only a UK market authorisation. They argue that the exit may lead to industry launching new pharmaceutical products later in the UK and that they may receive later market authorisation than in the rest of the EEA. That would give a period of SPC exclusivity for a longer period than under current laws. I can see why they argue that point: it is perfectly legitimate that they should do so. However, it would be a significant policy change, affecting the whole of the pharmaceutical industry and the NHS. I do not believe that it would meet the Government’s commitment to avoid a cliff edge for businesses by maintaining the status quo, which is what we are seeking to do, on exit day.
- My Lords, how can it be a unified patent unless there is unified set of jurisprudence to cover it?