By Giuliana Miglierini

While the position of the UK with respect to the participation to Horizon Europe (HE) is still pending, the British government has announced its new Pioneer plan aimed to provide a domestic alternative framework for research and innovation.

The plan is deemed to “protect and support UK science, research, technology and innovation (SRTI) sectors, should association to Horizon Europe on fair and appropriate terms not be possible”.

The planned total budget for investment (£14.6 billion up to 2030) corresponds to the same amount the UK government would have allocated to participation of the country in Horizon Europe. According to UK science and technology minister Michelle Donelan, the government is still committed to pursue HE association but “We must ensure we have an ambitious alternative ready to go should we need it,” she said.

This means the Pioneer plan might be activated in case of failure of the still ongoing negotiations with the European Commission. The plan has been specifically developed to provide a robust reference framework supporting UK’s Science, Research, Innovation and Technology (UKSRTI) network, and it is complementary to other, already existing R&D incentives. It shall also integrate with other relevant pieces of legislation in the field of research and innovation.

Four key pillars to boost UK’s research

Four different strategic lines of action have been considered in order to build a comprehensive approach for R&D and innovation. The publication of the plan is also a message from the UK government to the EU Commission, to mark the position of the country as a ‘science and technology superpower’ in the case that UK would be unable to join Horizon Europe.

The four key areas of action identified by the Pioneer plan are the attraction of talents, innovation, global collaboration and infrastructures.

Pioneer Talent is a programme aimed at attracting both domestic and international talents to run their research in the UK. The estimated investment amounts to up £2 billion by 2027/28. According to the plan, the new programme should be delivered in partnership with UKRI and the UK’s National Academies. A new set of doctorates, fellowships and professorships would be available through Pioneer Discovery, an investigator-led research programme, set up to provide grants of longer duration, higher level and flexibility compared to HE. The framework would also provide support for specialised leadership training, international mobility, entrepreneurship and commercialization of results. According to the plan, Pioneer Discovery would make available each year up to 800 studentships, 370 international fellowships and 260 early-, mid- and late-career stage fellowships and awards.

Pioneer Innovation would invest in the creation of partnerships between all actors involved in business-led innovation across sectors and technologies, including research bodies, industry and the third sector. The planned investment is up to £3.5 billion by 2027/28, targeted to a selected number of ambitious programmes aimed to sustain the transformative effort towards new models of collaboration.

Funding of the selected projects might vary from short- to medium- and long-term, and it would be based on quick-start catalyst programmes, challenge prizes and Eureka actions. Health innovations, green industrial growth, resilient UK, and transformative technologies are the identified priorities. Pioneer Innovation should allow for fast-track commercialisation and deployment of new technologies and innovations.

Pioneer Global aims to build broaden international SRTI collaboration beyond the EU, funded with a planned budget of £3.8 billion by 2027/28. The programme should focus on bilateral, minilateral (small groups of countries collaborating on specific, urgent global challenges) and multilateral collaborations (i.e influencing standards and increasing reliance on global supply chains). Global technology transfer should also be addressed. Discovery-driven bottom-up collaborations with researchers around the globe should drive the funding of activities.

For collaboration to European research programmes, the indication coming from the plan is to make reference to funding for all eligible consortia for Third Country Participation in Horizon Europe until 31 March 2025. News on how to address this issue after that date is expected to be released by the UK government in October 2024.

Pioneer Infrastructure is the programme aimed at building a completely renewed, once-in-a-generation network of world-class national and international high-quality R&D infrastructure andlab facilities supporting the previous lines of action. The planned investment is up to £1.7 billion by 2027/28, with the final goal to fully exploit the potential of UK’s Public Sector Research Establishments (PSREs), universities, institutes, national labs and research organisations.

The pending negotiation for participation to HE

Despite the commitment of UK government to associate the country to the current European research and innovation programmes, including Horizon Europe, Copernicus and Euratom Research& Training (as established under the Trade and Cooperation Agreement, TCA), negotiations with the European Commission are still ongoing. “But association would need to be on the basis of a good deal for the UK’s researchers, businesses and taxpayers”, is written in the Pioneer plan.

According to the document, the UK government has maintained active investments during the two-years delay, committing over £1 billion through the Horizon Europe Guarantee, and £684million of direct funding to UK Science and Research, Fusion and Earth Observation. Launched in November 2021, the Horizon Europe Guarantee should remain active up to the end of June 2023; grants issued by the UKRI up to the end of February 2023 amounted to more than £882 million.

One of the last interventions in support to the closure of the negotiation came from the director of the Francis Crick Institute and Nobel Laureate Paul Nurse, during a hearing at the House of Commons science and technology committee (see here more on Science & Business).

According to Mr. Nurse, the Pioneer plan would turn to send mixed messages, and the British academic community might be not enough protected from the risk of being excluded from HE due to the yet unclear commitment of the government to positively close negotiations.

An editorial signed by Science’s Editor-in-Chief H. Holden Thorp also summarises the sentiment of the chief executive of UK Research and Innovation (UKRI) Ottoline Leyser on the long-waited definition of the adhesion procedure to Horizon Europe. “I’ve been pleasantly surprised by how much wide press interest there’s been in the UK’s association to Horizon Europe,” she said to Thorp, “and I think it signals a much wider, very positive trend of real and deep interest in research and innovation across the UK system.”

The association to Horizon Europe should had closed in March 2023, after the signature of the Windsor Framework agreement by PM Rishi Sunak and President Ursula von der Leyen. Among open issues is the UK’s financial contribution to HE, even if according to the European Commission the country should not be requested to pay the full association fee for the two years it has been excluded from the research programme.

The Windsor Framework political agreement in principle signed on 27 February 2023 focuses mainly on customs requirements for goods entering Northern Ireland (NI) from Great Britain, a fundamental passage to ensure NI’s unique access to the EU single market. Two decisions related to the operative phase of the Windsor Framework were adopted by the European Council on 21March 2023, respectively establishing the EU’s position in the Joint Committee and the Joint Consultative Working Group set up under the EU-UK Withdrawal Agreement.

by Giuliana Miglierini

In a world undergoing a deep transformation, economic exchanges between different countries are fundamental to sustain the economic viability. Robust trade agreements are critical, for example, to ensure the continuity of supply of active ingredients (APIs) and excipients for the pharmaceutical sector. The opposite is also true, as many EU’s pharmaceutical productions are exported to the US and other countries.

While the European Union has a combined pool of about 130 trade agreements, the UK is negotiating a new free trade agreement (FTA) with India. EFPIA has published its data on the expected impact of a TRIPS waiver extension to Covid-19 therapeutics and diagnostics, a possibility under discussion at the World Trade Organisation (WTO).

The European Union is still well positioned

According to the European Parliament, in 2020 the EU positioned second for export of goods after China (15% vs 18%, respectively), and third for imports (13%, vs US 16% and China 14%). The EU’s trade balance increased from €192 billion in 2019 to €217 billion in 2020.

The EU has trade agreements in place with 77 countries. Some other 24 are pending and 5 under negotiation; some other 24 are waiting final adoption/ratification. Among the latest ones is the approval of the EU-UK trade and cooperation agreement in April 2021, and the adoption of the one with Vietnam in February 2020. The EU also signed the Comprehensive Economic Trade Agreement (Ceta) with Canada (still waiting for final ratification by some EU countries); the EUJapan Economic Partnership came into force on 1 February 2019. The free trade agreement with New Zealand (June 2022) is waiting final approval, as well as that with Latin America’s Mercosur countries.

The EU-US Trade and Technology Council launched in June 2021 is a forum for joint discussions on global trade, economic and technology issues. Negotiating mandates have been also approved by the EU Council to reach an agreement with the US on eliminating tariffs for industrial goods and mutual recognition of conformity assessment.

There is still no free trade agreement in place with China, while a comprehensive EU-China investment agreement is under discussion. Negotiations are ongoing with Australia and Mexico, in this last case to renew the EU-Mexico Global Agreement of June 2016.

Trade agreements are an important tool to ensure goods imported in the EU are manufactured using the same quality standards in force in Europe, thus acting to prevent some effects of competition from extra-EU countries. International trades greatly contribute also to the viability of the job market; data from the EU Parliament show that Germany leads this ranking with 6.8 million jobs supported by exports to non-EU countries, followed by France (2.8 mln) and Italy (2.7 mln).

There is not just one type of trade agreement, they can greatly differ by final objective and facilitating measures. Some examples are the reduction or elimination of import/export tariffs, the establishment of a customs union, or the setting of joint customs tariffs for imports. On the business side, other measures may support foreign investments as well as the resolution of disputes related to them. This is the typical case, for example, of the patent litigations often occurring in the pharmaceutical sector.

Negotiations ongoing between the UK and India

The new position of the United Kingdom as an independent country led the Government in January 2022 to start working to a free trade agreement with India. According to the document discussing the UK’s strategic approach to the deal, bilateral trading relationship with India amounted to £23.3 billion in 2019; the estimated impact for UK exports resulting from the FTA is to reach up to £16.7 billion by 2035.

The negotiations are focusing on the reduction of barriers to trade in goods; the removal of tariffs and the provision of a greater legal certainty are expected to benefit UK’s exporters, among which is also the pharmaceutical industry.

The interconnection of the respective financial markets may benefit from new opportunities of collaboration thanks to the easing of cross-border friction and a better regulatory alignment. India is also very advanced in digital innovation, a field where the FTA may support new models of commercial ventures in emerging techs, artificial intelligence, and cybersecurity. The Life Sciences and pharmaceutical sectors shall benefit of a higher quality interdisciplinary research, thanks to the establishment of joint processes.

“This negotiation is one of the most important that Britain could strike for life sciences and would provide an opportunity to boost access to innovative medicines and vaccines for patients in India”, said Claire Machin, Executive Director, International Policy at ABPI. The UK imported medicinal and pharmaceutical products from India in 2021 for a total of £533.8 million (7.5% of all imports from India); exports to India were around £137.7 million.

The Association of the British Pharmaceutical Industry is also among the eleven major cross-sector business groups that in August 2022 wrote an open letter to the UK’s Secretary of State for International Trade to urge the Government “to hold out for a commercially meaningful and comprehensive deal”, as it is deemed important the negotiations shall lead to a balanced outcome.

EFPIA’s analysis of Covid-19 TRIPS waivers

Following the adoption of a TRIPS waiver on Covid-19 vaccines by WTO members in July 2022, discussions started also about the possibility to extend the waiver to Covid-19 therapeutics and diagnostics.

At the end of September, EFPIA published a factsheet to present data on the current access to Covid-19 therapeutics and the possible impact expected from the waiver extension. The recommendation for WTO members is to reject TRIPS waiver to “focus on removing trade and regulatory barriers, strengthen the health workforce, increase public awareness regarding treatments, improve logistics processes for treatments, and scale up innovation through voluntary licensing”.

According to EFPIA, data indicates there is no supply shortage of therapies to treat Covid-19; testing is also declining since January 2022, thus leading to a lower precision in the demand for treatments.

The pharmaceutical industry has signed 138 voluntary licensing agreements since 25 February 2020 (63 of which in 2022) to provide access to treatments in low- and lower-middle-income countries. TRIPS waiver leading to compulsory licensing (CL) may pose several issues compared to voluntary licensing (VL), according to EFPIA. This is the case, for example, of the obligation to report adverse events which is in place for VL but not always for CL products. Counterfeiting may also occur should the treatments not be included in the Medicines Patent Pool undergoing WHO pre-qualification, suggests the factsheet.

More than 135,000 patented technologies are still in the R&D phase and may be negatively impacted should a TRIPS waiver been approved, said EFPIA. This number includes not only medicinal products or diagnostics, but also other industrial sectors like chemicals and machinery. The impact on other therapeutic areas should be also considered, as many products are undergoing repurposing and parallel development for several indications, as well as multi-purpose manufacturing technologies development.

The estimated impact of a 3-year Covid-19 waiver on pharmaceutical R&D would be particularly significant for high income countries, which would suffer a -28% drop in value of patent protection and -25% drop in R&D of pharma/biotech products. The upper-middle-income countries would be also affected (-11% patents’ value, -10% drop in R&D, respectively); estimates for lower-medium-income countries are -3% for patents value and -2% drop in R&D. Only low-income countries would be not impacted by the waiver, according to EFPIA.

by Giuliana Miglierini

After ten years of debate, a new era in the field of European public procurement is opening: negotiators from the French Presidency of the European Council and the European Parliament reached a provisional agreement on 14 March 2022 on the draft regulation establishing the new International Procurement Instrument (IPI). The tool aims to achieving a true reciprocity in access to international public procurement markets.

“Currently, European procurement is broadly open to companies from third countries, but European companies do not always have reciprocal access to public procurement in those countries. This new European instrument will equip the EU with credible leverage to open up our partners’ public procurement to our companies and will enable us to right that imbalance and defend our companies against these discriminatory practices. Today’s well-balanced agreement is a historic step in implementing an open, sustainable and firm trade policy”, commented Franck Riester, French Trade minister.

The agreed draft text is based on the second, amended proposal of a regulation adopted by the EU Commission on 29 January 2016, after the failure of the first version dated 21 March 2012. The mandate to negotiate for the European Council was approved on 2 June 2021. Further steps are now needed before the final adoption of the IPI regulation, including finalisation of the text at the technical level, approval by the EU’s Permanent Representatives Committee, and final vote by the Parliament and Council. Guidelines are also expected from the EU Commission to facilitate the application of the new regulation.

How IPI will work

Public procurement accounts for 15 to 20% of global GDP (data EU Commission). Historically, there is an unbalance in access to public procurement markets, with European companies often experiencing significant barriers to enter third countries.

The mechanism foreseen by the IPI tool requires the Commission to carry out a transparent investigation on bids made by extra-EU companies wanting to participate to public procurement tenders in the EU, should EU companies be subject to serious and recurring barriers to access the third country’s public procurement practices. The concerned country will be invited to participate to the investigative procedure, in the form of consultation. Should it decline the invitation, reciprocal measures will be applied by the EU to restrict the access of the third country’s companies to European public procurement market. More in detail, restrictions of access may take the form of a price penalty (up to 100%, if only price is taken into account), a reduced score (max. 50% score adjustment), or exclusion from the tendering procedures.

Once adopted by the European Council and Parliament, the IPI regulation will only apply to cases for which an international public procurement agreement between the third country and the EU is not in place, or where such agreement does not include commitments to open up markets for the goods or services under consideration. Furthermore, it won’t be possible for the Commission to investigate the practices of least-developed countries which benefit from the “everything but arms” arrangement, a provision intended to encourage the sustainable growth in lowincome countries.

Negotiators also established a limit value for the application of the new procurement procedures, i.e. an estimated value equal to or above €15 million excluding VAT for works and concessions, and ≥ €5 million for goods and services. Some strict conditions have been also set for member countries to request exemption from IPI measures for a limited list of local contracting authorities. To this instance, negotiators from the EU Parliament obtained the reduction to only two possible exceptions whereby an authority seeking tenderers in member states can opt out of IPI measures. Big contracting authorities, for example city halls of large towns or the central government, will always have to apply the new rules. Local contracting authorities will only be exempted from the IPI if they represent fewer than 50,000 people. Contracting authorities must always apply IPI for a percentage of annual overall tender value of 80%.

The investigation of bids received from third countries shall consider also social, environmental and labour requirements. Successful tenderers following within the field of IPI’s application will be subject to additional obligations, so to avoid circumvention of the new rules; for example, it shall be precluded to subcontract more than 50% of the total value of the contract. “This puts an end to the long list of prominent examples in which third-country bidders win illustrious public contracts across the EU while their home markets are de facto off limits for EU bidders. The agreement is effective while limiting the administrative burden to a minimum.”, said the EU Parliament’s Rapporteur Daniel Caspary.

Some reasons to overcome current barriers

A more detailed overview of the drafting process that led to the proposed IPI regulation is available in the Briefing document prepared by the European Parliamentary Research Service.

 Previous steps aimed to better support access of European companies to international public procurement markets are represented by the 2014 revised Government Procurement Agreement (GPA) signed at the World Trade Organization (WTO) and various bilateral free trade agreements (FTA), such as the government procurement chapter of the EU-Japan Economic Partnership Agreement (EPA). According to the EU Parliament, these actions led only to mixed results, as many emerging economies may prove reluctant to join the GPA or to open their public procurement markets to the EU bilaterally. Also first line players such as the United States may see public procurement as a legitimate tool to promote domestic production or employment (e.g. the US Buy American Act).

The IPI’s drafting process was resumed in 2019, following concerns about the competitiveness of the European industry vs China, as detailed in the Franco-German manifesto for a European industrial policy. The adoption of the IPI was also among the targets established by the new industrial strategy for Europe, published by the European Commission in March 2020.

According to the Briefing document, in 2016 the EU average for public procurement expenditure was about 13.4%, compared to 16.2% in Japan and 9.4% in the US. Netherlands, Finland and Sweden were the EU countries with the highest levels of public procurement, Ireland, Cyprus and Portugal those with the lowest.

Data also show that in 2018 the value of public procurement of goods, services and works European markets open de jure to bidders from GPA signatories (e.g. Australia, Canada, Japan and the US) amounted to €352 billion (over a total value of €2 trillion). While not having yet joined the GPA, according to the Commission other countries such as Brazil, China, India and Turkey have increased their protectionist measures. These trends points to half of the global procurement market being currently closed to foreign bidders: an important target to be tackled by the IPI regulation, as improved access might more than double EU procurement exports (currently estimated in €10 billion).

Among the main barriers used by third countries to prevent access of European companies to public procurement, the Briefing document mentions the lack of transparency (no online publication of notices or fragmented procedures), a requirement for national establishment such as joint ventures (China, Indonesia) or local establishment (Brazil, Indonesia), local origin requirements (India 50%, Indonesia 50%), the “buy Chinese” policy, etc.