UK Government Issues “No Deal” Brexit Notices for the Food & Beverage Sector

By Brian Kelly, Maree Gallagher, Bart Van Vooren, Katharina Ewert and Caecilia Dance on Posted in Brexit, Food & Beverage, Food & Drug Regulatory

Over the past months, the Government has regularly  posted technical guidance notices on what it calls a “no deal” Brexit, i.e., a scenario in which the UK and the EU will not reach an agreement and the UK will become a third country on 29 March 2019.  The UK Government has now published four notices addressed specifically to UK food and beverage producers outlining its plans for a no-deal Brexit.  The notices emphasise that the Government believes a no-deal scenario is unlikely, and essentially summarise the Government’s policy decision on certain key issues.  Key areas covered by the notices include geographical indications, food labelling and exports of food containing ingredients of animal origin.  These are discussed further below.

Geographical indications (“GIs”)

The Government indicates that it is keen to protect UK products that benefit from a GI, and if no agreement is reached then it intends to set up its own GI scheme.  The Government argues that it will “broadly mirror the EU regime and be no more burdensome to producers”.  Businesses will have to wait until early 2019 for detailed guidance on what it will involve, but the notice confirms the following:

  • The scheme will be compliant with the World Trade Organisation (“WTO”) Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”).
  • All 86 UK GIs currently protected under the EU scheme will automatically be given new UK GI status.
  • The UK would not have to recognise EU GI status anymore.

Producers will need to adjust product packaging/labelling to include the new UK GI logo.

It is unclear whether, following a no-deal Brexit, current UK GIs would still be protected under the EU regime.  The UK Government assumes that existing UK GIs “will continue to be protected by the EU’s GI schemes”, but this is not guaranteed.  If current UK GIs are not protected under the EU regime after 29 March 2019, then UK producers wishing to regain EU GI status will need to submit applications to the European Commission as third country producers.  The notice also highlights that companies should consider applying for EU Collective Marks or EU Certification Marks through the EU Intellectual Property Office (“EUIPO”) or the World International Property Organisation (“WIPO”).

The Government has recently launched a consultation for its proposed GI scheme. Responses may be submitted until 1 November 2018 on the DEFRA website.

Food labelling

The Government’s no-deal Brexit notice on food labelling raises two main issues.

First, labels on products manufactured in the UK would no longer fall within the scope of “EU” as a descriptor of origin.  This applies to both products sold in the UK and the EU.

Second, food products sold in the EU are required to include on the label the name and address of a responsible food business operator (“FBO”) which must be located in an EU Member State, or failing that, the details of the relevant importer.  In case of a no-deal Brexit, food sold in the UK must bear the details of either a UK-based FBO or the UK importer.  Similarly, food sold in the EU-27 must bear the details of an EU FBO or the relevant EU importer.

The Government intends to consult with stakeholders on the wider implications.  There will be a six month transitional period during which companies are still permitted to sell products labelled with an EU FBO.  Similarly, goods already labelled and placed on the market with only an EU FBO address may be sold until stocks run out.

Foods containing products of animal origin

Currently, most foods containing products of animal origin do not require any certification to be exported from the UK to other EU Member States, and vice versa.  However, following a no-deal Brexit, UK producers wishing to export foods containing animal products to the EU would need to obtain an Export Health Certificate (“EHC”) from the Animal and Plant Health Agency (“APHA”); or in Northern Ireland, the Department of Agriculture, Environment and Rural Affairs (“DAERA”).  The Government is working on simplifying the EHC application process and ensuring that there is “enough capacity amongst appropriately trained veterinarians or authorised signatories to approve the additional certificates”.  Stakeholders will be informed of any changes to the existing process.

In addition, in a no-deal Brexit scenario all exports of UK food containing animal products to Member States would have to be inspected and signed off at an (approved) Border Inspection Post within the EU, in order to permit onward travel.  The establishment in the UK from which the food of animal origin is prepared, obtained, or dispatched, must also be included in the list of registered establishments held by the European Commission.

A no-deal scenario therefore poses expensive and time-consuming regulatory hurdles for UK producers of food containing animal products.  Moreover, the EU will need to grant the UK listed third country status, otherwise no exports from the UK to the EU can take place.  The UK Government intends to apply for listed third country status and is confident that the EU will grant it, but the timing for this is uncertain.

Requirements for UK businesses exporting to third countries outside the EU should not change, other than the wording of the documentation which would have to reflect the fact the UK was no longer an EU Member State.  Such changes in wording would have to be agreed with the destination country.  DEFRA “will work to agree updates for all existing EHCs, prioritising the countries to which the UK exports the highest volumes”.

Tariffs and customs duties

The no-deal notices do not directly address tariffs and customs issues relating to food and beverage producers, but the Government has issued general guidance about what tariffs and customs would look like in the event of a no-deal Brexit.  Trade with the EU will be on WTO terms.  Currently the UK is part of the EU’s WTO Schedule of Concessions annexed to the General Agreement on Trade in Goods (“GATT”).  The UK and the EU reached an agreement which proposed that the UK would largely replicate the EU’s GATT Schedule, with tariff-rate quotas (“TRQs”) that largely affect agricultural and food products to be apportioned between the EU and the UK.  A number of WTO Members have challenged this approach, and we can expect to see further development in this area over the coming months.

The general notice highlights that in the case of a no-deal Brexit, the UK would not be able to trade with EU Member States on more favourable terms (than the WTO Schedules) until a separate free trade agreement was implemented.  The EU will therefore require payment of customs duty at the rate under the EU’s Common Customs tariff (“CCT”).  For EU goods imported into the UK, the UK will require a payment of customs duty at the rate set by the UK Government.  HM Treasury is set to establish a new UK trade tariff.

Conclusions

The notices restate the principle of the European Union (Withdrawal) Act 2018 that any existing EU legislation will be transposed into UK domestic law on the day before Brexit.  Government Ministers will then pass Statutory Instruments to address any gaps that might result from the transposition.  These should hopefully bring the required clarity.  Although the Government has indicated in these notices that it thinks a “no deal” scenario is unlikely, producers should ensure that they are well-prepared given the current uncertainty.  In the short term, supply chain disruption is likely to be the most pressing issue for producers, but they will also need to consider how to approach issues around labelling, GIs, and manufacturing standards.  Food and drink producers will need to bear in mind that the UK Government may make unilateral deviations from EU labelling rules, considering for instance the Government’s proposed review of allergen labelling on food products.  Such unilateral deviations would lead to increased costs and be likely to give rise to legal issues in the future.  Food and beverage producers not accustomed to dealing with non-EU/global tariffs will also need to find relevant expertise to help them deal with navigating the complex system of tariffs outside the EU.

Sources

“Producing food products protected by a ‘geographical indication’ if there’s no Brexit deal”

“Producing and labelling food if there’s no Brexit deal”

“Exporting animals and animal products if there’s no Brexit deal”

The Commission’s Proposal on Health Technology Assessment – Will the EU Member States Accept its Mandatory Provisions?

By Lucas Falco on Posted in Food & Drug Regulatory, Medical Devices, Medicinal Products

This article was originally posted on our sister blog Global Policy Watch

Introduction

Health technology assessment (“HTA”) is a multidisciplinary assessment process that seeks to evaluate the added therapeutic value of health technologies (i.e., drugs, certain medical devices, medical treatments including surgical procedures, and measures for disease prevention and diagnosis) based on both clinical and non-clinical elements.  Until now, HTA has strictly fallen in the purview of EU Member States; they have cooperated among themselves in this field for more than 20 years on a purely voluntary basis.  This has led to initiatives such as EUnetHTA, which is a network of national HTA bodies, and its various Joint Actions.  Article 15 of the Cross-Border Healthcare Directive (Directive 2011/24) also provides for that national bodies responsible for HTA should cooperate on a voluntary basis.  Gradually, these various actions have developed common criteria for the performance of HTA at national level.  For example, the last “Joint Action 3” of EUnetHTA seeks to define common assessment methodologies, develop common ICT tools, and conduct and produce joint clinical assessments and HTA reports.

EU Member States have acknowledged the significant role that HTA plays and called on the European Commission to continue to support such initiatives (see, e.g., Council conclusions of December 6, 2014, on innovation for the benefit of patients).  However, in a resolution of March 2, 2017, the European Parliament went a step further and called on the Commission to propose legislation on health technology assessment at the EU level to provide transparent and harmonized criteria to evaluate the added therapeutic value of drugs and other health technologies. Continue Reading

German government has started enforcement of the Nagoya Protocol and reviews compliance of pharmaceutical companies

By Dr. Dr. Adem Koyuncu and Bart Van Vooren on Posted in Food & Beverage, Food & Drug Regulatory, Medicinal Products, Pharmaceutical companies

The “Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization to the Convention on Biological Diversity” is an international agreement which aims at sharing the benefits arising from the utilization of genetic resources in a fair and equitable way. It entered into force on 12 October 2014.

The Nagoya Protocol imposes a complex set of multi-jurisdictional compliance obligations on businesses active in the pharmaceutical, food, cosmetics and other life science sectors. It now has more than 100 contracting parties, including the EU. The key legal source in the EU is Regulation (EU) No. 511/2014 on compliance measures for users from the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization in the Union. Continue Reading

German court allows pharma company public promotional statements about Rx-drug to counter a “shitstorm” – a trend also for the rest of the EU?

By Dr. Dr. Adem Koyuncu on Posted in Competition, Food & Drug Regulatory, Medical Devices, Medicinal Products

By Dr. Dr. Adem Koyuncu, Covington & Burling LLP

In the EU, drug companies are not allowed to publicly promote prescription-only medicines. As courts also apply a broad interpretation of the term “promotional”, nearly all public statements that mention a prescription drug are likely to be qualified as illegal advertising. In certain circumstances, this may be the case even if no drug is mentioned.

But what should a drug company do if false statements about its product are distributed? What is allowed in case of a so-called shitstorm? What can the company do to counter negative public statements about its drugs by HTA bodies or other institutions of the healthcare system?

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Commission publishes draft rules on country of origin/place of provenance indications for primary ingredients

By Lucie Klabackova and Brian Kelly on Posted in Food & Beverage, Food & Drug Regulatory

On 4 January 2018, the European Commission published a draft implementing regulation laying down rules for the application of Article 26(3) of Regulation (EU) N° 1169/2011 of the European Parliament and of the Council on the provision of food information to consumers (“FIC”), as regards the rules for indicating the country of origin or place of provenance of the primary ingredient of a food where different to that given for that food (hereafter “Draft Implementing Regulation”).

Permitted Indications

Article 2 of the Draft Implementing Regulation supplements Article 26(3) of the FIC and sets out different options of indicating the country of origin or the place of provenance of a primary ingredient which is not the same as the given country of origin or the given place of provenance of the food. The options include:

  • A simple indication of “EU”, “non-EU” or “EU and non-EU”;
  • Member State(s) or third country(ies);
  • The country of origin or place of provenance in accordance with specific Union
  • provisions applicable for the primary ingredient(s) as such;
  • Regions or any other geographical area within Member State(s)/third country(ies);
  • FAO fishing areas, sea or freshwater body.

In relation to the last two options, these need to be either defined as such under public international law or well understood by normally informed average consumers. Food business operators (FBOs) also have the option to inform consumers by using the following or similar statement: “(name of the primary ingredient) do/does not originate from (the country of origin or the place of provenance of the food)”.

Presentation Requirements

Additionally, Article 3 lays down presentation requirements for the country of origin or the place of provenance indications and provides that the font size shall not be smaller than the minimum font size under FIC (currently 1.2 mm x-height or 0.9 mm x-height for small packages with the largest surface area of less than 80 cm2). Furthermore, if FBOs choose to provide this indication in words, then the font size needs to be at least 75% of the x-height of the indication of the country of origin or the place of provenance of the food. Indications given in a non-scriptural form shall appear in the same field of vision as the indication of the country of origin or the place of provenance of the food.

Scope and Date of Application

The Draft Implementing Regulation does not apply to protected geographical indications and registered trademarks. Stakeholders have four weeks to provide their views on the Draft Implementing Regulation and the feedback period ends on 1 February 2018. The Draft Implementing Regulation shall apply from 1 April 2019 and the transitional measures allow for foods placed on the market or labelled prior to 1 April 2019 to be marketed until the stocks are exhausted.

AG’s Opinion – Licensed and Unlicensed Medicines May Fall Within the Same Relevant Product Market

By Jennifer Boudet and Miranda Cole on Posted in Competition, Medicinal Products, Pharmaceutical companies

Yesterday’s Opinion from Advocate General Saugmandsgaard Øe (AG) in Hoffmann-La Roche vs Autorità Garante della Concurrenza e del Mercato takes the position that licensed and unlicensed pharmaceutical products used for the same indication may fall within the same relevant product market. The Italian Council of State (ICS) referred a number of questions to the EU Court of Justice (CJEU) in March 2016 in the context of the appeal against the Italian Competition Authority’s (ICA) decision that Roche and Novartis reached an illegal market sharing agreement in the market for ophthalmic drugs for serious vascular eyesight conditions.

Background

Avastin (Genentech’s drug licensed to Roche) was approved for certain oncology indications. However, doctors started prescribing unlicensed Avastin to treat vascular eye conditions. Genentech’s Lucentis (licensed to Novartis), indicated for the treatment of certain vascular eye conditions, used a very similar active ingredient.

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EU Vote on First Borderline Decision Confirms: Cranberry Products Are Not Medical Devices

By Charlotte Ryckman on Posted in Food & Drug Regulatory, Medical Devices, Medicinal Products

This article was originally posted on our sister blog Inside Medical Devices

The EU Regulatory Committee on Medical Devices recently voted in favor of the European Commission’s draft decision on the classification of cranberry products (the “Cranberry Decision”).  In essence, the Cranberry Decision provides that cranberry products intended to prevent or treat cystitis and that have a principal intended action based on proanthocyanidins (“PACs”) do not fall within the definition of medical devices.  The European Commission adopted its draft decision based on Article 13(1)(d) of Directive 93/42/EEC (the “Medical Devices Directive”).

The vote comes more than one year after the Commission prepared a draft decision, in February 2016 (see our analysis of that draft decision here).  The formal adoption and publication of the Cranberry Decision are expected later this summer.  This article first briefly summarizes the regulatory context of EU borderline issues.  It then explains what triggered the decision, analyzes its content, and provides a brief outlook on what is coming next. Continue Reading

Exploring the EU Horizon for Pharma

By Peter Bogaert, Kristof Van Quathem and Lucinda Osborne on Posted in Food & Drug Regulatory, Healthcare system, Privacy & Data Security

The EU pharmaceutical industry landscape is in significant flux. There are many pressures to provide new therapies and to make them available more early and for as many qualifying patients as possible. In that context, the industry model and the role of exclusivity rights as a tool to stimulate innovation are being discussed. At the same time, discovering and developing new products is more complex and requires a collaborative effort. This happens against the background of new rules on medical devices and the protection of personal data, which are, for instance, relevant in assessing clinical effectiveness and relying on real world evidence.

Three members of the Covington European Life Sciences team will be speaking on these topics at the EU Pharmaceutical Law Forum being held in Brussels on 16-18th May. Continue Reading

EU Medical Devices Regulation Series: Potential for Easing Borderline Determinations?

By Charlotte Ryckman on Posted in Medical Devices

This article was originally posted on our sister blog Inside Medical Devices

Earlier this week, in a plenary vote, the EU Parliament endorsed the texts of the Regulation on Medical Devices (the “Regulation”—latest version available here) and the parallel Regulation on In-Vitro Diagnostic Medical Devices (the “IVD Regulation”—latest version available here).  This presents a good opportunity to have a closer look at one of the essential questions of the revision of the medical device rules, namely, whether the scope of the Regulation changes in comparison to that of the main Medical Devices Directive 93/42/EEC (the “Directive”).  We examine below the changes to the definition of a medical device and whether the Regulation affects borderline determinations.

As discussed in our earlier post, the borderline between medical devices, medicinal products, cosmetics and foods or food supplements is often blurred.  The Regulation sheds some additional light on the definition of a medical device and strengthens the Commission’s power in relation to the borderline issues.  Nevertheless, important questions continue to exist, for instance in relation to the pharmacological versus physical (or purely chemical) mode of action of a product. Continue Reading

Italian Council of State Improves Access to Investigational Medicines

By Luca Tosoni on Posted in Food & Drug Regulatory, Medicinal Products

Recently, the Council of State (i.e., the Italian supreme administrative court and consultative body) adopted an important advisory opinion, which allows for improved access to investigational medicines by patients in Italy.  In particular, the Council of State found that patients may be enrolled in compassionate use programmes or supplied with a medicine listed in the so-called 648 List after the product has obtained a marketing authorization, at least until the company starts to commercialize it in Italy.  The latter normally presupposes that the product is classified as subject to reimbursement.

Access to Medicines Not Authorized in Italy

There are de facto two regimes allowing patients to access investigational medicines (i.e., medicines that are not yet authorized in Italy).[1]  The first, applied in most cases, is the compassionate use regime.  The second, used in more exceptional cases, is the so-called 648 regime.  The two regimes may not be applied simultaneously.  Continue Reading

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