European Commission proposes changes to Supplementary Protection Certificates

Supplementary Protection Certificates (SPCs) are an intellectual property right that serve as an extension to a patent right (for up to five years) specific to pharmaceutical and plant products that must undergo extensive testing and clinical trials before being authorised by marketing authorities in Europe.

Earlier in 2018, the European Commission (EC) issued a proposal to change the rules in relation to Supplementary Protection Certificates (Regulation (EC) 469/2009).

The main feature of the proposal is the provision of a so-called “export manufacturing waiver” for patented products to third parties in order to promote the competitiveness of the EU generic and biosimilar industries in global markets.

The European Parliament’s Committee of legal affairs published the draft proposal on 30 October 2018.

The reason for the proposal:

Under the current regulation, the protection conferred by SPCs prevents EU manufacturers of generic pharmaceuticals and biosimilars from manufacturing for the exclusive purpose of exporting to countries outside of the EU in which SPC protection does not exist or has expired. Furthermore, the protection conferred by SPCs makes it difficult for the manufacturers of generics and biosimilars to enter the EU market immediately after expiry of the SPC, in contrast with manufacturers located in countries outside EU where protection does not exist or has expired. As a result of this, EU-based manufacturers are often required to operate from countries outside of the EU where there is no SPC protection or where SPC protection is shorter or has expired, which can put them at a commercial disadvantage.

The proposed “export manufacturing waiver” is being introduced to allow EU-based manufacturers of generic pharmaceuticals and biosimilars to manufacture in EU during the term of an SPC for the exclusive purpose of exporting their products to non-EU markets where patent or SPC protection has expired or never existed.  The aim of the waiver is to encourage further investment and the creation of jobs in the EU pharmaceutical sector by restoring a level playing field between EU-based manufacturing and manufacturing in non-EU countries.

Safety clauses:

The draft proposal includes a number of “safety clauses” to ensure that the new provision is not misused and the rights of the SPC holders are not unduly compromised. Some of the key clauses may be summarised as follows:

• Any party seeking to rely upon the “export manufacturing waiver” is required to inform (in writing) its intention to make an SPC-protected product for the exclusive purpose of export to a third country outside the EU, to both the authority which granted the SPC in the Member State and to the SPC holder, before commencing manufacture.
• The manufacturing party must also inform the authority which granted the SPC in the Member State and the SPC holder of any subsequent modifications in the procedure, for example if there is a change in the country which it intends to export the product.
• The manufacturing party must inform the authority in the Member States and the SPC holder not later than three months prior to start of the manufacture using a standard form provided by the regulators.
• The proposed export manufacturing waiver will apply to all SPCs for which the basic patent expired on or after 1 January 2023.
• Any confidential or commercially sensitive information will not be published by the authorities of the Member State and the notification to the SPC holder need not contain any confidential or commercially sensitive information.

Remark:

The main intention of the proposed change to the SPC regulation by the EC is to tackle problems such as loss of export markets (including new business opportunities), and lack of timely (namely ‘day-1’) entry into Member State markets following expiry of the SPC, for EU-based manufacturers of generic pharmaceuticals and biosimilars.

Perhaps unsurprisingly, the implementation of an export manufacturing waiver has not been welcomed by all.  Innovator companies have expressed concern that the provision may give rise to an increase in counterfeit products from outside of the EU and have questioned the clarity of the associated transitional provisions. However, the EC is hopeful that the new provision will boost the economy in EU Member States and tackle the competitive disadvantages that currently exist vis-à-vis generic and biosimilar manufacturers located outside of the EU.

Following the discussion on 30 October 2018, the draft regulation has already undergone some changes and these have been set out above. The changes proposed by the Committee may provide some improvement in safeguarding the rights of SPC holders against any abuse of the export manufacturing waiver.

However, the draft regulation proposing the export manufacturing waiver is most likely to undergo further changes as it passes through the European legislative process before it comes into force.

We will keep you updated on further developments on this topic, however if you wish to discuss this, or any other topic, please contact your usual AA Thornton representative.

References:

European Parliament DRAFT REPORT: http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+COMPARL+PE-629.542+01+DOC+PDF+V0//EN&language=EN

Category: News | Author: Leonita Paulraj | Published: January 2019 | Read more