Patents (Amendment) (EU Exit) Regulations 2018

Lord Deben Excerpts

Monday 14th January 2019 Grand Committee

[Lord Warner]

I totally agree with the noble Lord and will set out my reasons for doing so in relation to this particular set of regulations. The concerns that the BIA has about this set of regulations relate to paragraph 55, which is all about the number and date of the earliest of any EEA authorisations which lead to the granting of a UK authorisation. The effect of that setting of the date on the supplementary patents certificates, which are the extensions for patents of medicines that provide additional patient life, is to compensate for the period of market exclusivity lost during the essential regulatory approval process. So the market authorisation sets the date for the five-year market exclusivity arrangements that apply to medicines.

This starts to get a bit complicated so I will keep to the wording of my brief. The SPCs can provide up to five years of extra protection, and the precise period of the additional protection is determined using the first regulatory marketing authorisation date currently within the EEA. The amendment to which I have drawn attention, which is set out on page nine of the regulations, would maintain this EEA-wide stipulation for UK supplementary patent certificates despite the medicine covered by the SPC being subject only to a UK market authorisation—that is, it could not be marketed in the UK until approval by the UK-based MHRA. This would have the SPC’s duration aligned with those granted elsewhere in Europe on the basis of first authorisation in the EEA even if the UK authorisation was much later.

In so far as one understands why the Government are doing it this way, it appears that they are seeking to encourage life sciences companies to launch medicines in the UK at the same time as they launch them in the EU/EEA. The BIA fully understands what the intention is; it just does not agree that it will have the effect that the Government think it will. The BIA says that in reality many of its member companies are saying that the regulation is more likely to delay further the launch of a medicine in the UK and is adversely affecting the global reputation of the UK as a location for the life sciences industry.

[Lord Deben (Con)]

Is not the point that the noble Lord is making rather wider than that? He seems to be saying that if either the Government or the body to which he refers are right, this regulation changes the position in which we are. In other words, we do not need to argue whether it would have this effect in one direction or the other; all that we need to argue, to make the point that I think we are all trying to make, is that it is just not good enough to say, “This regulation doesn’t change the situation”. It manifestly changes the situation whether the Government are right or the BIA is right.

[Lord Warner]

The noble Lord is spot on. That is exactly the point that I am making. I want to develop the argument a bit more and relate it to the problems around consultation, or the lack of adequate consultation. I have a lot of respect for the BIA, particularly following my time as a health Minister when I had a lot of contact with it. It is not an excitable group of people who write and complain to the Government at the drop of a hat but a responsible trade body that any Government of any complexion would do well to take notice of. Moreover, the BIA is concerned about the lack of process and consultation on a regulation that will have a huge impact on its sector and on NHS patients:

“A strong intellectual property framework is essential if the UK wishes to have long-term sustained investment in R&D, remain a globally-attractive location for international investment and grow UK companies in the UK”.


I think we are all agreed that those are desirable things. However:

“Due to other regulatory requirements in the event of ‘no deal’, the exclusivity term for a medicine in the UK would be reduced as a result of the Article 3 amendment”,


in these sets of regulations compared to the rest of the EU. The threat of,

“a shortened data exclusivity period has adversely impacted global companies’ views of the UK”.

Companies have told the BIA—here I will quote what they have actually told the BIA—that a product will,

“never be launched in the UK before the EU”.

The UK,

“has moved further down the priority launch market”—

one company has told the BIA that the UK has moved from the first tier to the third-tier launch market for upcoming new products—and that the international reputation of the UK as a place for global pharmaceutical companies to undertake business has been damaged at the very time Brexit is already having an adverse impact on the UK’s global reputation. These are the points that a very responsible trade body is making about this specific set of regulations.

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[Lord Warner]

I am grateful to the noble Lord for his support. I have never been much of a one for taking notice of my own party’s Whips let alone the Government Whips.

The Minister should pause these regulations and conduct a proper consultation before taking them forward. The Government should delay the process until they have heard what the industry has to say about the impact of these regulations on the UK life sciences sector.

[Lord Deben]

My Lords, I am concerned about the consultation element. I am interested in the difference between the wording in this SI and the one that we are going to discuss later. This one says that,

“the Intellectual Property Office held informal discussions with a small group of selected individuals”.

The one that we are going to discuss later says that,

“the Intellectual Property Office held informal discussions with a small group of trusted individuals”.

Does this mean that the selected individuals are not trusted or that the trusted individuals are not selected? This seems like careless drafting, which reveals the fact that there was no proper consultation of any kind.

I say to my noble friend that it is not acceptable to talk about consultation if one of the major bodies concerned was not consulted. It is also not acceptable to talk about consultation when it is informal with selected groups. I run a business and one thing it does is give advice to people. If I said that my advice was based upon a series of people whom I had selected informally, that advice would not be well thought of. I have to say: “These are the people that I have chosen, in order that they should be a broad range, covering all the issues we are dealing with”. I do not select them on any other basis. If my noble friend does not explain on what basis these people were selected, he has to accept that all sides of the House will be other than certain whether it was on the basis of coverage rather than support.

[Baroness Kingsmill]

I take the noble Lord’s point entirely. However, having pointed out the inadequacy of the consultation programme, it also throws into complete disrepute the idea that there was no, or no significant, impact on business or the public sector and they have therefore not bothered to make an impact assessment. When the consultation process has been so manifestly inadequate, it is impossible to say that there has been no impact.

[Lord Deben]

The noble Baroness makes an important point. I want to follow this line because if the consultation itself does not cover the industry, and those others whom you would expect to be covered, it is not likely that the Grand Committee can reasonably expect to accept the concept that there is no effect or problem. We can only do that if we are sure that the consultation has been widespread, properly chosen and the rest. Will my noble friend explain who was consulted with, why some people who are obviously necessary consultees were not consulted, on what basis that choice was made and why these were informal discussions? This is surely a very important SI and there should have been formal discussions.

Secondly, there is a problem in all these SIs which we have to remind the Minister of each time. It is suggested that we can allow these SIs to go through because they are very unlikely actually to be used, because they are based on the principle of a no-deal exit from the European Union. That may be true, but it does not excuse us from ensuring that the SIs are as good as they could be. They might be used, unless the Minister is going to say that they are not going to be. At the moment, they could be used and we have to apply the same intellectual rigour to these as we would to any other SIs.

[Lord Adonis]

The noble Lord is making a powerful point. Did he note the remark made by the Minister in the debate on the last regulation: that the reason why there had not been full and proper consultation on the regulations was because the department was so preoccupied with consulting on and framing arrangements for the Prime Minister’s deal? We are being told that the regulations which we are debating to make provision for no deal, and which the House is expected to approve, are being inadequately consulted on and—as is clear from the remarks of the noble Lord, Lord Warner—inadequately prepared precisely because the Government are so overloaded with making arrangements for the deal. If the Government’s priority is the deal, rather than a no deal, is it not right for them to withdraw these regulations, and the option of no deal? The Minister made the frank admission to the Grand Committee earlier this afternoon that the Government have not had the resources and capacity to conduct proper preparations and consultation for no deal.

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[Lord Deben]

I do not think that I ought to follow the noble Lord down that road because otherwise there will be a complaint that one is somehow not keeping to the fact, but of course what he says is entirely true and I agree with him. However, the point is that we as a Grand Committee must not take any less notice of these SIs on the basis that they might not have to be implemented or indeed even that they probably will not have to be implemented. There are two reasons for that. One is that they could be implemented because that is what we are doing; we are making law. The second reason is the point made by the noble Lord, Lord Warner. In future, even if they were not implemented, in other contexts the fact that we had agreed to them would be used as a mechanism for suggesting that whatever is then being presented is perfectly all right because the Grand Committee of the House of Lords had been through them and they are only repeating them. That is the same kind of argument which says, “We are not actually changing anything”.

That leads me to my third point, which is simply this. If we are unhappy about the nature of the people who were consulted and if we also feel that we ought to know who they were and the circumstances in which the consultation took place, it is also true that we need to question the outcome. It is clear that those who know about it think that this particular SI changes the situation very significantly, but the suggestion is that there are no new obligations or burdens on private, public or third sector bodies and it does not require refamiliarisation—a word which I am fascinated to discover and would ask the Minister to explain what it means in order that I get a measure of it. However, if you get the consultation wrong you then get the outcome wrong and therefore you cannot say that there is no need for an impact assessment. The section on impact assessment is thus also very serious.

I direct the Grand Committee to paragraph 12.2:

“There is no, or no significant, impact on the public sector”.


The fact is that if there is no deal and this has to be implemented, there would be a huge impact on the public sector and that impact would be very expensive.

This is another point that I want to raise with my noble friend. There are no costs in this document. We are not told how much it is going to cost. The way to get around that is to say that it is not going to cost very much so, “we do not have to tell you”. However, one of the falsehoods of the whole Brexit argument is the suggestion that we are somehow going to make money out of it, whereas every time you look at any of these things, you see that the United Kingdom is setting up a system to do what historically has been done effectively on a Europe-wide basis. That all costs money and I want to know, as a Member of this House, how much it will cost. It is not acceptable that because we may not have to do it, we do not have to be told how much it will cost.

[Baroness Kingsmill]

Perhaps I may further the point that the noble Lord is making. We have now established pretty well that the consultation process was at best flawed but much more likely so limited as not to be taken seriously. From that has come the idea that there is no significant impact, which in turn has led to it being said that no specific action is being proposed to minimise regulatory burdens on small businesses. The weakness of the consultation process at the very beginning has worked its way through to saying, “Bad luck for small businesses”, and indeed, I might say, large businesses.

[Lord Deben]

That is absolutely true. It all adds up to my last point, which I feel is the most important point of all. The Government keep on talking about no impact, but of course in this SI they cover up the fundamental impact, which is that the benefit that used to be enjoyed by those to whom this applies because we were part of the European Union will be removed. That is a huge impact. When the Government talk about no impact, they are really saying that, as long as you confine your activities to the United Kingdom, there will be a little arrangement which will, roughly speaking, be the same as the arrangement that we had in the United Kingdom when we were part of the European Union. That is what we are saying.

That is an entirely different situation, because it means that we do not have the advantages which we had before. I know that that is an integral part of Brexit, and it is one of the reasons why I oppose Brexit so strongly. It is unacceptable not to measure those impacts. It is unacceptable to produce an SI which suggests that there are no impacts when you are saying that if we exclude the biggest impact of all, there are no impacts. That is, at the very best, misleading.

I say to my noble friend that anyone in this country who reads this impenetrable stuff as carefully as we have all tried to will realise that there are two hidden falsehoods in the whole activity. The first is: let us pass it because it will never be used. The second is: when we talk about impacts, we will refuse to talk about the impacts which really matter, which are the impacts which disadvantage British people and make us less able to handle competitive situations, deal with our patients and work in the way in which we can at the moment. We, the Government, are not prepared to measure that because then the public might say, “My goodness, this does not sound a very good idea”. So they do not tell them the figures, the costs or the disadvantages, because it would undermine their position.

[Lord Warner]

I am grateful to the noble Lord and agree with every word he said. Rather more elegantly than I, he made the point I was making about the high impact that these changes, if implemented, would have on British people, jobs, access to medicines and so forth.

In this debate, we are making some fairly serious accusations about the Government and their failure to hold a proper consultation. I hope that the noble Lord will join with me in not allowing that debate to include blaming the Civil Service and the IPO, because they are as much victims as everyone else. They are operating in a system which has not properly allowed them to carry out the consultation that they might have made in normal circumstances. I should not like them, reading Hansard, to think that we are accusing them of dereliction of duty. I hope that he will agree.

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[Lord Deben]

I entirely agree, but I add to that list the Minister because, like every other Minister, he has to defend all this nonsense. He has to defend a decision which the Government made. The Minister responsible has resigned because he saw what it meant. This Minister has to defend that. I do not think that is fair on Ministers. I do not think it is fair to say to a Minister: “You have to explain why there was no proper consultation; why when it says impact it means ‘impact (none of the important impacts but just those we have chosen)’ and when it says ‘costs’ it gives none because it excludes all the big costs which really matter. So no one can make any decisions about this, but it is all right because it may never be implemented”. I know it is very unpopular with the Whips and with Ministers but frankly, this Grand Committee has got to draw the attention of the public to the fact that these SIs are based on a wholly improper, wholly wrong concept. They are not just a transition operation. They fundamentally change the way in which many industries are going to operate. They fail to list the real costs, they have not consulted those who know and they have done a cosy little arrangement which this House and this Committee should not accept.

[Lord Adonis]

Before the noble Lord sits down, in the concluding remarks of his extremely powerful speech he referred to part 2 of the Explanatory Memorandum, which is where the Minister makes the appropriateness statement in respect of the scope of the regulations. He noted that the Minister, Sam Gyimah, who made all three statements in respect of the Equality Act 2010, in respect of the regulations being appropriate and in respect of whether they are in order with regard to the legislative powers conferred on the Government by the European Union (Notification of Withdrawal) Act 2017, has since resigned, and because of Brexit, the very policy enshrined in the regulations for which the Minister was giving these authorisation statements.

Further, in his resignation letters and subsequent statements, the Minister has expressed his extremely deep concern about Brexit in principle, and in particular the no-deal Brexit, the very subject of the regulations about which he was making the appropriateness statements which are before the Committee. Would the noble Lord agree that not only is this unprecedented—in my experience and maybe in his—but that it raises a huge concern: should we be proceeding with these regulations at all without either a statement signed by the current Minister and/or Sam Gyimah giving evidence to us on whether the concerns he has expressed about a no-deal Brexit might lead him to review the statements he has made on behalf of the Crown in part 2 of this Explanatory Memorandum?

[Lord Deben]

I do not want to embarrass any Ministers, including the noble Lord who is here. I want to exclude Ministers, both past and present, for a kind of corporate nonsense which the Government have presented and which is supported by a surprising number of people across the Benches. I think this Committee has a responsibility to say to the Minister, “One could not imagine this in any other circumstances. You could not make it up, as you can see when you read the detail”.

I end by coming back to the words I put before the Committee at the beginning. In one case it was “trusted people” and in the other it was “selected people”. It was not just a joke. It was to point out that whoever had to write this stuff knew perfectly well that it did not add up, and that there was no basis for presenting it except that somehow or other, the Government had to find a way of talking about these issues without telling the public the truth about impact, about cost and about the deprivation which this measure would bring to the British people if it were ever implemented.

[Lord Adonis]

My Lords, in my now quite long experience of the House I have found that on most occasions when policies are being tested and explained, amendments are being considered and so on, the difference narrows as debate advances. That difference can be eliminated entirely, sometimes because the explanations given by the Government turn out to meet the concerns, sometimes because the Government themselves move to meet the concerns and sometimes because the concerns are misunderstood. That is the general course. Because our job is to scrutinise there may still be resulting differences, but those differences are narrowed, not expanded.

However, a pattern is now emerging in the consideration by the Grand Committee of these no-deal regulations. In almost every case now, as the debate continues the difference widens, for three reasons. The first is precisely the point that the noble Lord, Lord Deben, has made so eloquently, which is that you are expected to believe, in the words of the White Queen in Alice in Wonderland, six impossible things before breakfast before you even consider these regulations. The first suspension of total disbelief that we are expected to entertain is that, all other things being equal in no deal, these regulations will simply make technical changes to govern the fact that we have left the EU with no deal. The problem is that all other things are not equal. The whole ground has shifted underneath the very activities, and the national interest and the companies, that are at stake.

That could not have been clearer than in the remarks of my noble friend—as I continue to call him; I know he now sits on the Cross Benches but he and I were Ministers together for many years so he will always be my noble friend—Lord Warner. I dare say that my noble friend, whom I hold in extremely high regard, knows this sector better than anyone in the House except possibly my noble friend Lord Darzi. He has huge, detailed knowledge from a long period of time as a Health Minister. My noble friend has reported to the House two issues of extraordinary import. The first is that the impact of the actual changes in these regulations will be profound for the industries concerned and for those who need to use their services. The second is that most of those directly concerned were not consulted at all.

That leads to the second big issue that has now arisen time and again in the Grand Committee: the consultation has been exiguous or non-existent despite the fact that the issues concerned are hugely important. The noble Lord, Lord Deben, who is one of the most forensic debaters in the House, noted to brilliant effect the use of the weasel words in respect of consultation in the Explanatory Memorandum regarding the,

“selected individuals with expertise in the relevant areas”,

who the Intellectual Property Office chose to consult.

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[Lord Adonis]

I think that the Grand Committee will be extremely concerned to have information on this point. If what my noble friend has said is the case, it would be a situation without precedent in my experience: that on matters of significant impact on a major industrial sector, precisely one person in one company has been consulted and the relevant trade bodies were not even given the opportunity to express their views.

[Lord Deben]

What is more, that one person was selected but clearly not trusted.

[Lord Henley]

I was going to leave this to the end and I suspect that any intervention I make will just prolong these proceedings, but for the sake of assisting the noble Lord at this stage, I can assure him that consultation participants on the technical view of the draft instrument included the BIA, the ABPI, the IP Federation, the Chartered Institute of Patent Attorneys, the British Generic Manufacturers Association and the agrochemicals industry.

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[Lord Adonis]

A difference of fact, as my noble friend has just said, between the Minister and my noble friend Lord Warner, who has just pointed out to me that paragraphs 1 and 2 of Regulation 55 specifically concern exclusivity. This is the precise issue which he said should have been consulted on and on which the companies and trade associations concerned say they were not consulted. I simply note that, but this issue needs to be explored more fully before these regulations go to the House itself, as the situation at the moment is clearly unsatisfactory. The Minister, who is deeply honourable in these matters, would not wish this dispute of facts to be unresolved.

[Lord Deben]

Is the noble Lord not being a bit unfair to the Minister? Is the real problem here not the word “informal”? The Minister’s problem is that, if you have a formal consultation, you know precisely who was consulted and on what points. As I said in my own speech, if you have this curious thing called “informal” consultation, no Minister is able to answer these questions because you do not know what was said in any of the discussions. That is what is wrong with this consultation mechanism. The noble Lord is being unfair to the Minister, who can only say what is passed on to him, because this was not formal. There was no formal report, so we have no idea and nor does he.

[Lord Adonis]

The noble Lord makes a very good point. The Minister himself played no part in this process. All he can do is read out messages passed to him by officials. I do not hold him responsible in any way. Nobody was suggesting for a moment that he was personally responsible for engaging in this consultation and has therefore given misleading information to the Grand Committee. The point is that the House needs to know the truth.

I will make one remark on what the noble Lord, Lord Deben, said. He said it is hard to be precise about what happened if conversations took place during informal, as opposed to formal, consultation. However, there is a difference between informal consultation and no consultation whatsoever. The point made by my noble friend Lord Warner is that it appears not that there was informal as opposed to formal consultation, but none whatsoever. No conversations took place between the relevant trade bodies and companies, and the authorities responsible for drawing up these regulations. That is what he said, and it is of huge moment to the House. Using the word “informal” does not excuse these consultations being non-existent, which is the issue before the Grand Committee.

I return to the third thread of concern we have about the whole way in which these statutory instruments are being conducted. First, they depend on us believing the impossible proposition that no deal is not itself going to make a fundamental difference. The second issue we are constantly wrestling with is the inadequate or non-existent consultation. The third is the inability of Ministers to answer the points raised in the debate. That has been a running theme in these discussions. What happens—I dare say this will happen again when the noble Lord, Lord Henley, responds to this debate—is that the Minister restates the case for the statutory instrument that he made at the beginning. He selectively answers one or two points—to give him his due, he has just given a list of organisations that he said were informally consulted; it may or may not be accurate, but we need to establish that—but most of the points raised in the debate are not answered at all by the Minister. To be fair to him, the Minister himself played no part in this consultation and is simply having to read notes given to him by officials, who may themselves have been at some distance from the consultations that took place.

We are then expected to approve these regulations. Because of the inadequate arrangements for the scrutiny of statutory instruments—a point made very eloquently by the noble Lord, Lord Tyler, in earlier debates—we then have no further recourse. We cannot do what happens with primary legislation in this House, which is that we have a Committee stage, we can move amendments and probe the Government further, and the Government are under an obligation to come back to the House with further information. None of that happens. The only recourse we have is to seek to repeat this debate by referring the statutory instrument to the House and hoping—we then have no ability to amend it or to move amendments—that when the Minister comes to make the next speech in the House, he will respond to the points raised in the Grand Committee.

That leads me to an important point about how we handle these statutory instruments when they go to the House. On each of these statutory instruments that we have been debating and doing our best as Members of the Grand Committee to scrutinise, a lot of concerns have been raised but not met by the Government. I see that my noble friend Lord Foulkes is a member of the Liaison Committee and the Procedure Committee. He is a real power in the land in this House. Most of us are never admitted to the inner sanctum of these bodies, but he is. It is extremely important that Ministers write to Members of the House setting out their response to all the issues raised in the Grand Committee before the House comes to debate these regulations, so that we can then properly consider the adequacy of the Government’s further response. Let us consider the vital issue of consultation, which has been raised by my noble friend Lord Warner and on which I do not think the Minister is going to be in much of a position to comment, because he is dependent on notes passed to him by officials who are one stage removed from the consultation anyway. The House would expect a full statement to Members on what happened in the consultation—who was consulted, on what basis, what they said and what the Government’s response was—before this statutory instrument is debated in the House.

We need some mechanism—perhaps it is the Liaison Committee. Perhaps my noble friend Lord Foulkes, who takes on many public responsibilities, should take it upon himself to see that this process is conducted in a timely and adequate fashion before the House debates statutory instruments. I do not know whether my noble friend would be willing to take on that responsibility, but I am volunteering him. Otherwise, he may have a suggestion that we as a Grand Committee can then make for who should undertake this responsibility.