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Focus on Regulation

European Commission proposes SPC waiver for EU biosimilars or generics manufactured solely for export from the EU

On 28 May 2018, the European Commission has published a draft regulation amending Regulation 469/2009 concerning the supplementary protection certificate for medicinal products[1]. This proposal is intended to modify the EU rules on Supplementary Protection Certificate (SPC) and allow EU generic and biosimilar companies to manufacture versions of medicinal products still protected by a SPC, provided that the products were intended solely for sale outside the EU.

SPCs are an intellectual property right scheme introduced in the EU in 1992 that provide an extension to patent rights for medicinal products. The SPCs are intended to offset the loss of effective patent protection for medicinal products that occurs due to the time necessary to complete the obligatory procedures prior to grant of related marketing authorisation. An SPC can extend a patent right for a maximum of 5 years following grant of marketing authorisation.

At the moment, during the SPC period for a medicinal product in the EU, EU-based manufacturers of generic or biosimilar medicinal products cannot manufacture for any purpose. In addition, the SPC is considered by some to make it challenging for EU manufacturers of generics and biosimilars to enter the EU market immediately after the expiry of the SPC, since they have not built up production capacity before expiry of the SPC. The same is thought not to be true of manufacturers based in non-EU countries, where patent protection may not exist or has expired. According to the European Commission, this situation creates a major competitive disadvantage for EU-based companies and entails a risk of delocalisation of manufacturing and loss of investment in the EU.

According to the European Commission, many SPCs will expire from 2020. This may lead to a significant number of generics and biosimilars entering the EU market. The European Commission considers that there is an urgent need to adjust the existing SPC Regulation to address this situation. The Institution has, therefore, proposed a targeted amendment to the SPC rules to introduce an export manufacturing waiver.  This waiver would provide EU based companies will have entitlement to manufacture a generic or biosimilar version of an SPC-protected medicine during the term of the SPC provided this manufacture is solely for the purpose of export to a non-EU market where patent protection for the innovative medicinal product has either expired or has never existed. The European Commission’s proposal would also address the EU day-1 entry issue. The proposal is anticipated to contribute to the possibility for a manufacturer that has set up a manufacturing line for export purposes to more easily, following expiry of an SPC,  use the same line to manufacture generics or biosimilars with a view to swiftly supplying the EU market.

The European Commission’s proposal includes a series of safeguards intended to create transparency and prevent medicinal products that infringe IP rights based on SPCs from entering EU Member States markets. The proposal provides that manufacturers intending to start manufacturing for export purposes must notify the competent industrial property office of the EU Member State which granted the basic patent and in which the market authorisation was obtained. The information contained in that notification will be made public. The manufacturers will also need to comply with due diligence requirements, chiefly to prevent goods manufactured for export from being diverted onto the EU market. Manufacturers will be required to fully inform their contracting parties in charge of the manufacture or export of the products that the products in question are only intended for export and that placing the products on the EU market, import or re-import of these products into the EU may infringe the SPC.

The Proposal provides that any export of SPC-protected products out of the EU will be subject to compliance with specific labelling requirements. This will include affixing a logo (“EU Export”) to the outer packaging of the product. The logo is intended to facilitate the identification of the products as exclusively intended for the purpose of export to countries outside the EU.

The European Commission claims that the combined effect of these safeguard measures will create transparency and prevent products that infringe intellectual property rights from entering the EU market. According to the European Commission, the proposal will make it easier for SPC holders and public institutions to detect and fight such infringements through  means of judicial redress available under existing legislation governing the enforcement of Intellectual Property Rights.

The proposed Regulation, if adopted in its current form, will apply only to SPCs granted after the date of application of the Regulation. The new rules would also apply to applications for SPCs submitted to the competent authorities in accordance with Regulation (EC) No 469/2009 and which remain pending on the date that the proposed Regulation enters into application. An appropriate transitional period will apply to these applications.

[1] European Commission, Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 469/2009 concerning the supplementary protection certificate for medicinal products, 28 May 2018, available at this link.