Life Sciences 2021

The new Life Sciences 2021 guide features 19 jurisdictions. The guide provides the latest legal information on challenging the decisions of regulatory bodies; clinical trials; the marketing, manufacturing and distribution of pharmaceuticals and medical devices; pricing; digital healthcare; patents; and developments related to COVID-19.

Last Updated: March 22, 2021

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Authors



Baker McKenzie has one of the largest dedicated global life sciences and healthcare groups in the legal industry, comprising over 800 lawyers in 46 countries. Besides being among the first firms to provide comprehensive industry advice, Baker McKenzie continues to broaden its expertise and enhance its understanding of the global life sciences market by counting former regulatory officials, former in-house counsel from big pharma and medical device companies and lawyers holding higher degrees in scientific fields among its ranks. The breadth and depth of the firm's expertise and experience stretches over the key practices of M&A, tax, compliance, healthcare regulatory, employment, intellectual property, and dispute resolution – – all of which are ranked among the world's leading. Baker McKenzie's lawyers advise clients across the entire healthcare and life sciences ecosystem, from traditional big pharma, medical devices and biotech players to manufacturers, distributors, research institutions, clinical trial bases and health and regulatory authorities.


The COVID-19 pandemic has put public health at the forefront more than ever and has created challenging legal issues for the life sciences industry. The pandemic has mandated government participation and control affecting many areas, including intellectual property. It has also driven licensing and collaboration among industry players, especially in the development of treatments and vaccines and in the production of PPE. It has accelerated and broadened digital transformation within the industry and has disrupted supply chains as never before. A look to the future reveals a promising 2021 for industry-related M&A, as well as increased importance being placed on sustainability. As legal challenges mount in the post-pandemic era, the image of the industry has improved with the development of effective treatments and vaccines across the globe.

Increased Government Participation and Control

Unprecedented demands on healthcare systems forced government participation and control. Governments across the globe have obliged industry and non-industry players to use their manufacturing facilities and know-how to respond to the pandemic. Law firms have advised players outside the industry on legal issues arising when forced to produce ventilators, for example, while advising traditional industry players on the legal risks of sharing IP and trade secrets under forced-manufacturing obligations. Government participation and control has also created uneven negotiating advantages which require rapid, efficient and creative legal advice. 

Intellectual Property Risks

Intellectual property has not escaped the pandemic; indeed, for some it has become a victim. The risk of compulsory licensing is a global concern, as is the expropriation of intellectual property in certain jurisdictions. Social pressure once again has brought attention to pharmaceutical patents and to the idea of free IP and access to medicines. Sharing IP and trade secrets under forced-manufacturing schemes and collaboration agreements is an added threat to intellectual property ownership and exclusivity, which requires sound legal advice and industry knowledge.

Licensing and Collaboration Challenges

Licensing and collaboration in the life sciences industry continues to increase, especially with biotech companies. The urgent need for treatments and vaccines has resulted in negotiating licensing and collaboration agreements with diverse partners in record time. Time-restraints in particular have made negotiations challenging and have resulted in sacrificing essential contractual provisions. Such sacrifices will undoubtedly result in increased litigation in the future.   

Digital Transformation Continues to Play a Leading Role

Digital transformation has played an important role in the life sciences industry for some time, but the pandemic has geometrically increased that role. Legal risks have also increased, since regulatory authorities have not been able to keep up with digital advancements. More than ever, it is essential to have sound and creative legal advice to navigate the transformation. Key areas directly depending on digitalisation include telemedicine, apps and wearables, medical devices, clinical trials, electronic health records, digital delivery systems and patient-monitoring systems, all bringing with them issues of data privacy, especially at the global level. 

The Complexities Surrounding Vaccines

Vaccine development has evolved tremendously, as have the legal issues surrounding the development and implementation of a vaccination programme. The development of a vaccine that once took up to 20 years was resolved literally in days, thanks to prior advances. Research and development depend more on artificial intelligence and real world data, as do clinical trials. As in other areas, negotiations with government entities who purchase the vaccines are uneven and expose companies to compliance risks. Furthermore, in many countries and regions, the seller is obliged to assume unusual liability. The possibility of obliging workers to be vaccinated in order to report to their job opens a realm of legal issues as well.   

Supply - Chain Disruption

Supply chains will never be the same. Resilience and flexibility are essential. Both the pandemic and natural disasters have played havoc with rigid supply chains and have forced the industry to diversify. The current trend is to look to localisation and regionalisation of the supply chain rather than depend on globalisation. In many jurisdictions, changes to the supply chain trigger regulatory issues that can bring short- and mid-term interruption to business. Export restrictions have also played an important role in supply-chain disruption, as have regional trade issues, including Brexit and the China/US situation. Supply-chain disruptions will inevitably increase litigation and trigger a legal analysis of the interpretation of force majeure across the globe. 

A Promising Horizon for M&A

On a brighter note, 2021 is expected to be a good year for M&A across the globe. Mid- to late-stage assets are increasingly attractive. Industry leaders agree that the focus remains largely on bolt-on deals rather than on transformative M&A. While 2020 was a solid year for business development, some deal-making was put off, which could make 2021 a strong year for deals. M&A will continue to see unfamiliar faces and unusual partners entering the life sciences industry as pharmaceutical companies in particular look to rely more on tech partners and even to integrate them into their structure.

Sustainability Gains Importance

Sustainability has gained importance across the industry, as have the legal issues inherent in sustainability targets and reporting. Life science companies prioritise a concrete and measurable commitment to reduce carbon emissions, and many require their legal counsel and business partners to demonstrate a similar commitment. Reducing energy consumption and/or investing in renewable energy resources also resonates with those in the industry. They demand that members of their supply chain commit to limited environmental impact. Industry players are implementing circular economies, emphasising waste management and are monitoring the life-cycle impact of products, from the design phase to environmentally friendly materials and processes, efficient transportation, recycling and reuse. 

Conclusion

Legal issues facing the hyperactive life sciences industry are increasing in number and complexity. In-house counsel expects legal expertise while demanding industry knowledge. Increased government participation raises compliance red flags where outside legal counsel is essential. The pandemic has accelerated the digital transformation of the industry and offered new and creative opportunities for specialised lawyers to connect with their clients, especially on regulatory and data privacy issues. Industry litigation and arbitration are expected to increase because of urgently executed licensing and collaboration agreements and unfulfilled contracts resulting from supply-chain disruptions. 

While not all of the issues discussed herein are exclusive to the life sciences industry, this industry has and will continue to face a myriad of unique challenges, including compliance risks implicit in interacting and negotiating with governments, antitrust issues arising out of captive markets and limited options, an uncertain atmosphere for patent protection, and data privacy and cybersecurity risks. Finally, demanding regulatory regimes which vary from region to region and country to country make the development of multiple vaccines within nine months an astounding achievement and bring the importance and success of the industry to a personal level. 

Authors



Baker McKenzie has one of the largest dedicated global life sciences and healthcare groups in the legal industry, comprising over 800 lawyers in 46 countries. Besides being among the first firms to provide comprehensive industry advice, Baker McKenzie continues to broaden its expertise and enhance its understanding of the global life sciences market by counting former regulatory officials, former in-house counsel from big pharma and medical device companies and lawyers holding higher degrees in scientific fields among its ranks. The breadth and depth of the firm's expertise and experience stretches over the key practices of M&A, tax, compliance, healthcare regulatory, employment, intellectual property, and dispute resolution – – all of which are ranked among the world's leading. Baker McKenzie's lawyers advise clients across the entire healthcare and life sciences ecosystem, from traditional big pharma, medical devices and biotech players to manufacturers, distributors, research institutions, clinical trial bases and health and regulatory authorities.