March 12, 2026

Pharma: Key UK legal developments from 2025

David Bennett, Emily Bottle, Priyanka Madan, Lerryn Martin, Kate Meakin, Alan Montgomery, Veronica Roberts, Natalia Rodriguez Herbert Smith Freehills Kramer + Follow Contact LinkedIn Facebook X Send Embed

In this briefing, experts from multiple practice areas provide an overview of some of the key UK legal developments from 2025 which companies in the pharmaceutical sector should be aware.

Industry updates

UK US trade deal

On 1 December, the UK and US Governments announced a pharmaceutical trade deal (Trade Deal) which included a 0% tariff on the UK's pharmaceutical exports to the US for a minimum of three years. Of significance to many in the industry will have been the commitments agreed in return by the UK Government, which included:

• a reduction in the VPAG payback rate to 15% for 2026 to 2028 (which was 23.5% in 2025 factoring in an R&D investment element);
• an increase in the price at which NICE views drugs and treatments to be cost-effective to between £25k and £35k per “quality-adjusted life year” delivered to patients (with the threshold having ranged between £20k and £30k since 1999) – a development NICE has estimated could support NHS recommendations of an additional 3-5 innovative medicines of new indications each year; and
• a pledge to double the portion of GDP allocated to innovative drugs, from 0.3% to 0.6%, over the next 10 years. The reduction to the VPAG payback rate, in particular, was seen as a welcome development following sustained industry criticism of the decision to maintain the higher rate (and which had contributed to decisions to withdraw UK based investments).

The Trade Deal is a step in the right direction for the UK life sciences industry but, of course, the story does not end there. As discussed further below in the context of the UK's Life Sciences Sector Plan, there remain other issues beyond pricing which need attention in order to maintain the UK's position on the increasingly competitive global stage.

Labour Life sciences strategy

2025 saw the launch of the UK Government's Life Sciences Sector Plan (the Plan) with the sector marked as one of the Government's priority sectors as part of its Modern Industrial Strategy and a key supporting component of the Government's 10 Year Health Plan.

The Plan seeks to address a range of issues recognised as impacting the UK's sector's competitiveness on the global life sciences stage. These include capital and scaling constraints (in particular, weak access to growth capital post-Series B; cautious domestic investor base and poor access to public markets), slow and fragmented commercialisation, clinical trials bottlenecks, data accessibility challenges and regulatory / market access issues.

The Plan focuses on three interconnected pillars: (1) world-class R&D, (2) making the UK an outstanding place to start, grow, scale and invest, and (3) healthcare innovation and NHS reform. It contains a swathe of specific actions as well as individuals specifically allocated with responsibility for each. Six headline actions identified include:

• investing £600 million in a national Health Data Research Service;
• materially reducing clinical trial setup times;
• up to £520 million for advanced life sciences manufacturing;
• streamlining regulation and market access;
• improving and streamlining procurement routes (accelerating NHS adoption of new technologies through an NHS “passport”); and
• industry partnership. In addition to the more detailed metrics set out for each granular action in the Plan, as an over-arching measurement of success, the Plan includes the following targets:

By 2030

• The UK to have more:

  • investment in commercial R&D;
  • scale-up finance raised by Life Sciences business; and
  • Life Sciences FDI, than anywhere else in Europe.

• The UK to be in the top three fastest places in Europe for patient access to medicines / MedTech.
  By 2035

• The UK to have more:

  • investment in commercial R&D;
  • scale-up finance raised by Life Sciences business; and
  • Life Sciences FDI, than any country globally (excluding the US and China). Whilst the Plan represents an opportunity for it, this is not the first time ambitious plans, and targets, have been laid out to boost the UK life sciences sector. Ultimately, success lies in execution and, given the wide range of interlinked elements at play, we expect the industry will keep a watchful eye on the UK's progress in the years to come.

Pharma Regulatory

2025 saw a range of developments in the pharma regulatory space as efforts continue to bolster the UK's position as a leading life sciences hub. As part of its wider contribution to the UK Government’s Life Sciences Sector Plan and 10-Year Health Plan, the MHRA (amongst others) has been focused on ways to improve the speed, efficiency and promotion of innovation resulting in some welcome changes for the industry.

The Medicines for Human Use (Clinical Trials) (Amendment) Regulations 2025

2025 saw the approval of the Medicines for Human Use (Clinical Trials) (Amendment) Regulations 2025 (SI 2025/538) (the Regulations) which, following a 12-month transition period, will come into full effect on 28 April 2026. This represents the first major update of the UK’s clinical trial rules in 20 years with the reforms aimed at strengthening patient safety, speeding up trial approvals, and encouraging innovation.

The Regulations will introduce a more streamlined review process, aiming to cut approval times by around 40%. Based on a single application, the MHRA and Research Ethics Committee will conduct their reviews in parallel and the initial outcome / RFIs (to be raised jointly) must be issued within 30 calendar days (with the deadline for responding to regulator feedback increased from 14 to 60 days to align with international timelines). Some other key changes are aimed at putting patient safety, informed consent, and transparency of trial results at the core, and a requirement to register clinical trials in a public register and to publish results within 12 months (including a summary of results for participants in a format which can be easily understood). Further, the MHRA will also introduce a 14-day assessment route for phase 1 trials, adopting an innovative stepwise approach, restoring a rapid pathway for the earliest testing of new medicines in people – a key draw for global developers deciding where to base their research.

The MHRA has noted that the Regulations are part of its on-going commitment to implement a flexible and risk-proportionate approach to regulation of clinical trials; accelerating patient access without compromising safety and maintaining the UK's competitiveness in the clinical trial market. With the Prime Minister’s target to reduce the time from application to first participant from 250 to 150 days, it will be hoped that the Regulations can deliver and build on the improvements already being seen following implementation of other recent regulatory reforms and new digital platforms. Encouragingly, these saw the MHRA reporting in October that clinical trial approval times have been reduced from an average of 91 days to 41 days and, in January 2026, reporting that clinical trial applications were up 9% January – November 2025 versus the same period in 2024.

Other developments

There were a range of other regulatory developments in 2025, including:

• Various regulatory developments occurred in the field of medical devices, in particular:
  • the Medical Devices Post-Market Surveillance (PMS) Reform (June 2025), which are aimed at stricter obligations on manufacturers to monitor devices on the market;
  • the Medical Devices “Continuity” Amendment (May 2025), which remove the automatic “sunset” (expiry) of four EU-based medical device regulations embedded in UK law, thereby maintaining the status quo and essential safety standards for IVDs, e-labelling, animal-tissue devices, and notified body oversight; and
  • the Government’s July 2025 response to an MHRA consultation on high risk IVDs, which confirms plans to adopt EU Common Specifications for certain Class D in vitro diagnostic devices (e.g. tests for serious infectious diseases) into GB law;
  • the MHRA's Statement of Policy Intent (July 2025) setting out its early thoughts regarding the establishment of an 'Early Access' service for innovative medical devices (initially focused on diagnostic devices, particularly those addressing the NHS's most urgent needs). The Early Access service would look to provide conditional market access prior to full approval where there is unmet clinical need or potential for significant patient benefit.
• The MHRA and National Institute for Health and Care Excellence announced a joint information-sharing agreement aimed at accelerating access to new medicines for NHS patients in England. Under the scheme, pharma companies will be able to register early with both agencies for parallel decision-making on licensing and value. The agencies have noted that this is expected to result in an anticipated reduction in access times of three to six months.
• In November 2025, the MHRA published a policy paper with proposals for a major overhaul to the regulatory framework for rare disease therapies with the aim of making it quicker and easier to get these therapies tested, manufactured and approved in the UK. A public consultation will be conducted during 2026 and a draft of the proposed framework is anticipated to be available by Spring.

Intellectual property

In the UK, a spate of litigation concerning SGLT2 inhibitors for type 2 diabetes led to the loss of AstraZeneca's dapagliflozin patent and SPC protection. The High Court reaffirmed the UK’s strict “plausibility” standard, requiring “reasonable scientific grounds” for the claimed therapeutic effect at patent filing and declining to follow the EPO's more permissive approach post-G2/21.

In related litigation, both the High Court and Court of Appeal considering the circumstances in which interim injunctions should be granted. In the latest judgment from December 2025, concerning Boehringer Ingelheim's SGLT2 inhibitor empagliflozin, the Secretary of State for Health and Social Care intervened to give what was considered by the judge to be "extremely valuable" evidence on the NHS's willingness to restore prices following the successful defence of patent rights post-generic entry. Nevertheless, the judge concluded that there was a substantial risk that Boehringer Ingelheim would not be able to restore its price levels if generic launch occurred, and that Dr Reddy's failure to clear the way before launch favoured the grant of an interim injunction (for more information on this ruling, see our blog post here). Overall, it is clear that UK courts are looking increasingly closely at market dynamics and timing when considering whether interim injunctions should be granted.

There were also a number of decisions concerning SPCs. In a case concerning cladribine, the Court of Appeal confirmed that the grant of SPCs on the basis of second medical use marketing authorisations is precluded. Separately, the High Court considered the SPC manufacturing waiver in a case brought by Regeneron in relation to aflibercept. There has been significant industry commentary in this area, with a number of similar cases brought in national courts across Europe. The UK court, ultimately aligned with the broader interpretation of the waiver adopted by the Dutch and Belgian courts, finding that a manufacturer can rely on the SPC manufacturing waiver even if its notification does not include details of the marketing authorisation in the country of export (e.g. MA number), if these are not yet publicly available. This is an area ripe for further appellate challenge.

In the medical devices sphere, there is ongoing litigation on continuous glucose monitoring systems and devices, with two appeals to the Court of Appeal currently being heard in relation to disputes between Abbott and Dexcom.

Investment activity and M&A

Reflecting global trends, 2025 was a mixed year for biotech investment activity in the UK. According to the BIA's annual report, UK biotech VC funding ended the year down in terms of both deal volume and value (the latter of which was 13.2% down from 2024 at £1.8 billion). Meanwhile, IPOs remained elusive for the third year in a row (although, the UK was not alone in this with only one biotech IPO recorded across the entirety of Europe in 2025).

However, the year ended on a more positive note and Q4 showed signs of recovery and was the best performing quarter in terms of deal volume (22 deals; £441.7 million raised). This was part of a broader theme which saw a mood shift for the sector as investor confidence in the industry's ability to navigate its way through the challenges faced grew (in part, driven by the US most favoured nations deals which eased some of the prevailing uncertainty).

Mirroring another global trend, a dominant feature of UK biotech investment activity in 2025 was that the year's overall deal value was driven by larger rounds. Q1 saw two mega rounds (which ultimately became two of the year's largest investment rounds across the US and Europe), namely:

• AI-driven drug discovery company, Isomorphic Labs' £449 million first external financing round; and
• obesity / cardiometabolic-focused Verdiva Bio's £327 million over-subscribed Series A funding round, which saw investors drawn to its advanced next gen oral and injectable pipeline. Other significant raises for UK companies included Draig Therapeutics, with its pipeline of next gen neuro-focused therapies which raised £107 million across two rounds (Seed and Series A) and CellCentric, a biotech developing inobrodib, an oral, first-in-class small molecule inhibitor of p300/CBP for the treatment of multiple myeloma and other cancers, which raised £90.3 million in a Series C financing. Incidentally, these four companies fall neatly into some of the year's dominant investment trends with neurology, oncology and obesity / cardiometabolic remaining popular therapeutic areas, as well as the trend which sees increasing investment in companies utilising AI.

In terms of M&A highlights, MSD's $10 billion acquisition of respiratory focused Verona Pharma (with its COPD drug, Ohtuveyre, which was approved by the FDA in 2024) was the stand-out deal of the year for UK targets. This was also one of the sector's largest M&A deals globally in 2025 and reflects the broader trend of companies facing significant patent cliffs continuing to look to later stage companies to boost revenue growth. In another significant deal for a UK target, Sanofi acquired London headquartered next gen vaccine biotech, ViceBio, for up to $1.6 billion.

In terms of outlook for 2026, the quality of science and R&D in the UK has been long been a strength and will continue to draw investment and acquisition activity. Yet, global competition remains fierce and this has intensified in recent years with China's meteoric rise as a life sciences innovation hub (which is, itself, impacting global investment activity - noting, for example, that the aforementioned Verdiva Bio's pipeline comprises assets licensed from Chinese biotech, SciWind – in a structure which is becoming increasingly popular for Chinese-based R&D).

If global pharma M&A and investment activity does rebound in 2026 (as many expect), there is no guarantee as to where those funds will flow. However, the upswing in UK investment activity towards the end of 2025 fuels confidence for improved momentum in 2026. And there are reasons to be optimistic for the future for the UK biotech scene. In addition to its well-known R&D capabilities, it will be hoped that the various initiatives which have been rolled out in recent years, the Government's Life Sciences Plan and the on-going regulatory developments aimed at promoting speed and adoption of innovation all come to fruition and help to cement the UK's position as a leading life sciences hub.

Competition and FDI

In 2025, the UK Competition and Markets Authority (CMA) achieved major wins in defending decisions on anti-competitive practices in pharmaceutical sector. The Court of Appeal upheld the CMA’s Hydrocortisone excessive pricing decision, reaffirming the cost-plus methodology and reinstating the CMA's original penalties. The Supreme Court’s refusal to hear an appeal in the Liothyronine case means that the Court of Appeal's decision in that case is also final, providing the sector with further guidance on how the CMA will assess excessive pricing. The CMA also closed its first UK case on abusive disparagement – Vifor’s conduct regarding a rival intravenous iron product – through commitments in May 2025. The CMA's decision closely tracked the European Commission’s findings and approach to commitments, but the CMA took a stricter approach to the latter, requiring detailed agreed corrective messaging to be provided to specified health service recipients. The CMA also accepted a voluntary £23m payment by Vifor to the government.

The proposed remedies in the CMA’s October 2025 provisional findings in its ongoing vet services market investigation shows that the CMA is open to innovative remedies to boost competition and lower medicine costs (in this case, by mandating written prescriptions at a capped fee, and vet guidance to help pet owners buy cheaper online). Government pressure to address cost-of-living concerns and promote growth is shaping the CMA's priorities and approach, reflected in changes to the CMA's guidance to facilitate quicker merger reviews and proposed changes favouring behavioural remedies. These reforms aim to embed the CMA’s “4Ps” (pace, predictability, proportionality, process) and support business confidence. Government influence may also have a more direct impact – illustrated by the CMA’s consideration of a private dentistry market probe at the Chancellor’s request in November 2025.

The Government consulted on proposed changes to the National Security and Investment regime in July 2025. Relevant proposed changes for the industry include minor clarification of the scope of exemptions for gene and cell therapy, which the Government expects will decrease the number of filings in the synthetic biology sector. The scope of the AI mandatory filing sector will be reduced by excluding companies using "off the shelf" consumer AI for internal purposes, but the AI definition will continue to apply, amongst other things, to companies developing or testing AI systems that could potentially create a risk to people's health and safety. The consultation closed in October 2025 and the Government is due to announce next steps soon.

Class actions

Class action litigation has become increasingly prominent in the English courts in the past decade, with claims increasing in size and value. The trend has been driven by a range of factors including the increased availability of litigation funding; by well-resourced claimant firms setting up to specialise in class actions; and by increasingly sophisticated use of social media advertising to build classes of claimants quickly and efficiently.

Another notable trend has been increased globalisation. Many of the firms and funders that have become prominent in England & Wales have links to well-established class action specialists in the US, Australia and elsewhere and it is increasingly common for class actions involving the same issues to be progressed simultaneously in multiple jurisdictions. This trend is particularly relevant for multi-national consumer product businesses – including in the pharmaceutical sector – who place identical (or near-identical) products on the market in multiple jurisdictions.

Product liability class actions should remain high on the list of potential risks for companies operating in the pharmaceutical sector. Notably, 2025 saw the commencement of a group action against J&J in respect of allegedly carcinogenic talcum powder (whilst in another sector, the year also saw the on-going claims in 'dieselgate' litigation in the automotive sector subject to a three-month trial which is thought to be the biggest product liability class action yet seen in England & Wales with the parties due for further hearings in 2026). Like the diselgate litigation, mass claims against J&J were initially pursued in the US and then in other markets including England & Wales. Claims arising from alleged side-effects caused by weight loss drugs have also been gaining momentum in the US and elsewhere and are widely expected to develop in England & Wales in the near future.

Beyond product liability, we are seeing the early signs that cyber / data breaches could become a focal point for potential class action litigation. We also continue to see environmental and human rights-based claims, often being brought in the English courts against UK-based parent companies in respect of alleged failings by their international subsidiaries and/or by companies in their global supply chains.

Pharma companies should remain cognisant of the growth in this area and ensure they have procedures in place to mitigate and manage the risk of mass litigation. Being able to react quickly to threatened litigation – before claimant groups have gained momentum, numbers and funding – is often crucial to driving a successful outcome. For more information on global class action risk, please see our Class Actions radar.

Competition class actions

2025 saw a number of UK competition class actions reach substantive judgment on the merits, with further judgments awaited in 2026. Whilst the first two judgments (Le Patourel v BT and Gutmann Trains) resulted in a finding of no abuse of dominance, the CAT found an abuse of a dominant position in Kent v Apple. The class representative's success in Kent v Apple demonstrates for the first time that a substantial damages award can be made by the Tribunal in a competition class action. The Supreme Court has, however, in a judgment in December 2025 reaffirmed the CAT’s gatekeeper role in respect of competition class actions and clarified that the regime requires a balancing between considerations of access to justice and the protection of defendants from unmeritorious opt-out claims.

Corporate Crime & Investigations

Failure to Prevent Fraud (FTPF) under the Economic Crime and Corporate Transparency Act 2023 *ECCTA*),

The new UK strict liability corporate offence of FTPF came into force on 1 September 2025. It is committed by an in-scope large organisation if:

• an associate (which includes employees, agents and subsidiaries),
• commits a specified fraud offence, such as fraud by misrepresentation or false accounting,
• with the intention of benefitting the organisation or any of its customers. A company will have a defence if it had reasonable fraud prevention procedures in place.

The Home Office has published statutory guidance on the new offence, which provides insight into what is expected of organisations in terms of fraud prevention procedures. The guidance is not prescriptive, so careful thought and proper engagement is required to ensure a company has appropriate measures in place. Key to establishing a defence will be conducting a risk assessment to consider the risks to the particular company, considering existing controls and identifying any gaps for uplift.

Some of the key areas where pharmaceutical companies could be at risk of committing an offence are:

• Falsified data in clinical trials: Teams involved in clinical trials and product development may alter results or fail to fully reflect negative findings, to present a product as safer or more effective than it is. Such conduct could be committed by employees, contractors, or third parties acting on the companies behalf to help win regulatory approval or external funding.
• Falsified sales data: Staff or distributors may inflate sales, move sales between months or quarters, or hide discounts. This may often be driven by pressure to meet targets or earn bonuses, indeed the guidance provides that companies should consider motivation, alongside opportunity and rationalisation, in the course of assessing risk.
• Dishonest product claims: Sales teams may overstate benefits, play down risks, promote uses that have not been approved, or make misleading comparisons with rival products.
• Dishonest misstatements of financial and non-financial reporting: Companies may wrongly classify costs, overstate revenues, or make untrue ESG claims about environmental or labour performance. Expansion of the Identification Doctrine

The ECCTA also introduced a significant change to the way in which criminal liability may be attributed to corporate entities. Prior to this coming into effect, a company could only commit a criminal offence requiring a particular mental state (knowledge, recklessness etc.) if the mental state of a senior person representing the company's "directing mind and will" would be attributed to the company. This had typically been considered to require one or more members of the board to hold the requisite mental state.

The ECCTA broadened the scope of the so-called "identification doctrine" by providing that, if a senior manager of a body corporate or partnership, acting within the actual or apparent scope of their authority, commits a "relevant offence", then the organisation will also be guilty of that offence. "Relevant offences", listed in a schedule to ECCTA, are focused on economic crime and therefore cover offences such as bribery, money laundering, and breach of financial sanctions.

However, the Crime and Policing Bill, published by the UK Government on 25 February 2025 proposes to expand this rule to all offences. The Bill is currently passing through Parliament and so the provisions remain subject to change but, if enacted, there is scope for this to further expand the potential scope of corporate criminal liability by increasing the range of offences for which an organisation can be liable, subject to the requirement that the relevant senior manager was actual within the actual or apparent scope of their authority when they committed the offence thereby making it more difficult to see how some offences (such as offences against the person) could engage corporate criminal liability.

Serious Fraud Office (SFO) Enforcement

While the SFO has not publicly announced any new investigations into pharmaceutical companies, its 2025–26 Business Plan, and the revised Corporate Prosecution Guidance, signals a materially tougher enforcement posture across all sectors. The coming into force of the FTPF offence, combined with an expanded doctrine of corporate liability, means that pharmaceutical companies (like any other corporate) will need to re-evaluate their risk assessments, internal controls and self-reporting policies.

AI and emerging technologies

AI continues to be a hot topic for the industry and, in contrast to the approach taken in some other jurisdictions (eg. the EU which has adopted the EU AI Act), the UK does not currently have a specific, dedicated AI regulation (for a global overview, see our Global AI Tracker). Companies must instead apply existing laws on data protection, intellectual property, employment, competition, consumer protection and other sector‑specific regimes.

The UK has instead continued its strategic approach which is pro-innovation, sector-led and looks to foster AI innovation while regulating the technology through high-level principles to guide responsible AI development and deployment. This pro-innovation approach will be important to the UK life sciences industry with the use of technology, including AI, key components of the Government's Life Sciences Sector Plan and 10 Year Health Plan (which, for example, aims to make the NHS the world's most AI enabled health system).

In December, the MHRA launched a Call for Evidence into the regulation of AI in Healthcare (which closed on 2 February 2026) – with the information gathered due to inform the National Commission into the Regulation of AI in Healthcare’s (Commission) recommendations. The Commission – which comprises experts from technology, healthcare, law, patient groups, the public, government, and the NHS - was established in September and will provide its recommendations to the MHRA on a new regulatory framework in 2026.

Meanwhile, the UK courts have seen two major cases involving AI and IP rights in the last few months. Before the end of the year, in Getty v Stability AI, the High Court concluded that the Stable Diffusion AI image generating Ai service provided by Stability AI was the importation of an article into the UK but did not carry an infringing copy and so was not infringing the copyright in Getty's images which Getty alleged had been used to train the AI. This act complained of was secondary infringement of copyright; Getty had originally claimed that there was primary infringement of the copyright in its images by their use to train the AI, but no evidence of training in the UK's jurisdiction was produced and these claims were withdrawn during the proceedings. Leave to appeal has been granted - see our blog post here.

In recent weeks, the Supreme Court has given a decision (Emotional Perception AI v Comptroller of Patents) which has made the first step required to success in a patent application for an AI more straightforward, in that it overruled the test that had been established by the Court of Appeal in 2006 (in Aerotel) as to whether a computer-implemented invention was excluded from patentability and applied the EBA's test from G1/19 instead which provides inventions involving hardware are not computer programs as such and thus are not excluded. In doing so the Supreme Court also stated that although UK national courts are not strictly bound by decisions of the EPO boards of appeal. They must respect and follow the decisions of the enlarged board (EBA) unless convinced that they are wrong beyond the ambit of reasonable difference of opinion. This has implications for UK court's interpretation of patent law in areas other than computer-implemented inventions therefore. One of the reasons the SC gave for not following Aerotel was the EPO EBA's criticism of the approach to patentability taken in that CoA decision for example. For more on this see our post here.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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