UK-Switzerland pharma dispute threatens trade deal talks

A dispute over pharmaceutical intellectual property rules is threatening to slow trade negotiations between the United Kingdom and Switzerland, with concerns in London that Swiss demands could lead to higher costs for the National Health Service, according to sources familiar with the talks cited by POLITICO.

The two countries launched negotiations in 2023 on an enhanced free trade agreement, with a tenth round of discussions held earlier this month. However, progress is now at risk due to a long-standing disagreement over protections for pharmaceutical patents.

At the centre of the dispute is the use of Supplementary Protection Certificates (SPCs), which extend patent protection for medicines beyond the standard 20-year term. Such systems are already in place in the UK, Switzerland and the European Union.

Swiss negotiators are pushing for these protections to be explicitly included in the new trade agreement, effectively locking in current intellectual property standards. Supporters argue that this would provide long-term certainty for investors and prevent future weakening of patent protections.

The UK government, however, has resisted the proposal, reflecting divisions within its own departments. According to industry sources, the Department of Health and Social Care is leading opposition, warning that longer exclusivity periods could delay the entry of cheaper generic medicines and increase costs for the NHS.

In contrast, the Department for Business and Trade and the Office for Life Sciences are said to be more supportive of the pharmaceutical sector’s position, arguing that stronger protections would help incentivize innovation and investment.

The disagreement has caused frustration among Swiss negotiators and industry stakeholders. One source familiar with the discussions described the reaction as “very angry,” adding that the UK’s reluctance to formalize existing protections in the agreement risks undermining a traditionally close partnership on intellectual property.

“The UK and Switzerland have always been partners internationally on promoting innovation and strong IP rights,” the source said. “For the UK to turn around to Switzerland and say: ‘Even though this is law already, we’re not willing to write it into the FTA,’ is like abandoning your best buddy.”

The same source warned that failing to guarantee these protections could reduce incentives for pharmaceutical companies to launch new medicines in the UK market, as shorter exclusivity periods may limit their ability to recover research and development costs.

The issue is further complicated by ongoing reforms in the European Union. EU institutions, including the European Parliament and the Council of the EU, are working on a new pharmaceutical package aimed at updating market exclusivity rules, streamlining regulation and requiring companies to make drugs available across member states.

Brussels is also considering additional measures that could extend patent protections for European biotech medicines. These developments are being closely watched in London, amid concerns that any reduction in EU protections could prompt the UK to adjust its own regime to remain competitive, particularly in the generics sector.

“The EU is changing its IP rights,” a source noted. “So the suspicion is that, if the EU reduces their protections, then the UK might want the flexibility to do the same.”

In a statement following the latest round of talks, the Department for Business and Trade said the government would only sign agreements aligned with national interests, including safeguarding high standards and protecting the NHS.

Critics of stronger patent protections have urged the government to hold its position. Nick Dearden of Global Justice Now argued that tighter intellectual property rules would increase medicine costs and strengthen the influence of large pharmaceutical companies.

“Over the last 12 months, Britain has been held over a barrel by drug monopolies empowered by [US President] Donald Trump’s corporate trade agenda,” he said, adding that the UK has already agreed to increase spending on medicines.

In December, the UK committed to raising National Health Service spending on new drugs as part of an agreement linked to securing tariff-free access to the US market.

By Tamilla Hasanova