Insights | October 12, 2018

Commission Proposal to Change the Regulation on Supplementary Protection Certificates

The European Commission has proposed to amend Regulation 469/2009 concerning Supplementary Protection Certificates (SPCs) for medicinal products. The proposal would allow pharmaceutical companies to manufacture generics and biosimilars for the purposes of exporting outside the EU while the SPC for the medicinal product is still effective in the EU. To achieve this, the Commission wants to create a so-called ‘export manufacturing waiver’ to the SPCs.

SPCs are designed for medicinal or plant protection products that require extensive clinical testing and trials to obtain regulatory market approval. SPCs aim to compensate the time loss of patent protection that occurs due to the time required to obtain market approval for the product. SPCs extend the term of patent protection up to five years and in specific cases the term may also be extended even further (6 months). Manufacturing the generics and biosimilars is prohibited in the EU before the SPC has expired.

According to the Commission, the prohibition on manufacturing puts European companies into a competitive disadvantage compared to companies operating outside the EU where manufacturing generics and biosimilar is often allowed. According to the Commission, companies in the EU cannot compete globally in the market of generics and biosimilars which are protected by SPCs in the EU. In addition, as an SPC expires in the EU, the first companies to bring generics and biosimilars to the EU market and benefit from the early position in the market often come from outside the EU. The Commission’s proposed ‘export manufacturing waiver’ aims to eliminate this competitive disadvantage.

The proposal outlines a set of requirements for manufacturing SPC-protected generics and biosimilars. The requirements define what information the manufacturer must provide to the relevant authority. For example, the manufacturer must specify the intended start date of manufacturing, identify the SPC product in question and provide an indicative list of the intended third country / countries to which the product is to be exported. This should be done no later than 28 days before the intended start date of manufacturing. The manufacturer must also ensure that its contractual parties are informed and aware that the conditions of the waiver also apply to them and that importing, re-importing or placing the product on the market might infringe the SPC in question.

While the proposal might enhance the competitive edge of certain manufacturers of pharmaceuticals located in the EU, it also leaves some open questions. For example, the proposal does not give detailed answers on how the waiver will be supervised to ensure that the products are not sold in the EU at any point in time. The consequences of breaching the waiver are also unclear. If the proposal is advanced, one should carefully take into account the legitimate interests of the SPC holders.

The proposal is currently discussed in the Council of the European Union and in the Legal Affairs Committee in the European Parliament. The Committee will give a committee decision on the proposal before the Parliament’s vote.