The European Parliament legal affairs committee votes in favor of a comprehensive SPC manufacturing waiver

In May 2016, the European Parliament, in its Resolution on the Single Market Strategy, endorsed the need for changes to the EU supplementary protection certificate (“SPC”) and urged the Commission to introduce and implement an SPC manufacturing waiver before 2019, without undermining the market exclusivity granted under the SPC in the protected markets. In May 2018, the Commission proposed to amend Regulation (EC) No 469/2009 concerning the SPC for medicinal products (“Regulation”). The draft regulation proposes to introduce a limited exception into EU law by means of a “manufacturing waiver” to limit the rights the SPC holder may exercise under the Regulation. EU-based companies will be entitled to manufacture a generic or biosimilar version of an SPC-protected medicine during the certificate’s validity period, if manufactured exclusively for export to a non-EU market where protection has expired or never existed. On 23 January 2019, the Legal Affairs Committee of the European Parliament (“JURI”), with 21 votes in favor and 2 against, approved the Draft European Parliament Legislative Resolution on the “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” (“Resolution”). Therefore, voting in favor of the SPC waiver proposed by the Commission, as amended by the Resolution, and opening trilateral negotiations between the Parliament, the Council and the Commission. The aim is to conclude the three groups’ work by the end of February and to reach a final decision during the Parliament’s plenary session in March, which would be a crucial step in amending the previous version approved by the Council. The JURI emphasized that members of European Parliament are convinced that the measures contained in the Commission’s proposal to amend the Regulation will reaffirm the EU’s status as a global hub for investments in innovative pharmaceutical research by reducing costs and improving access to generic and biosimilar drugs within the EU. The SPC currently extends the 20-year duration of pharmaceutical patents valid throughout the EU for a maximum 5 years to allow the recovery of the time elapsed between filing the application and obtaining the marketing authorization for the products. In his explanatory statement, the JURI Rapporteur in charge of the matter pointed out that, “It would be a mistake to look at this proposal as a mere collision of interests between generic and innovative companies or as a false dichotomy between the most vulnerable and the interests of the largest companies.” According to the Rapporteur, “The generics and biosimilars manufacturers and their great value are not at stake here, since it is undeniable that their emergence in the field of global health has meant a genuine positive revolution in terms of access to essential medicines”. Therefore, the “proposed introduction of an exception to the SPC protection [is regarded] as a way to remove an unintended legal barrier that was preventing EU-based manufacturers of generics and biosimilars from competing on export markets where competition is fierce and restore a level playing field between EU-based manufacturing and manufacturing in non-EU countries.” The Rapporteur also observed that, “It would be unfair to forget that scientific advances and the development of new medicines are essential to treat diseases and lengthen human life and that a strong intellectual property rights framework is key for encouraging pharmaceutical investment in R&D in the EU”. Therefore, “In this context, it is important that SPC-protected medicines retain their full market exclusivity in the EU and that appropriate safeguards are put in place in order to ensure transparency, help the SPC holder to enforce its protection in the EU and avoid the risk of illicit diversion onto the Union market of generics and biosimilars in respect of which the original product is protected by an SPC.” The Rapporteur also emphasized that the proposed SPC waiver “seeks to strike a balance between, on one hand, the imperative to keep the attractiveness of the EU as a hub for investments in innovative pharmaceutical research and, on the other hand, the need to ensure the competitiveness of EU-based manufacturers of generics and biosimilars and create the conditions for them to compete on equal terms on the fast-growing global markets.” In short, the exemptions to the SPC waiver approved by the JURI would allow manufacturers to:

• legally manufacture a product in the EU for export to third countries during the SPC’s period of validity;
• store the product within the EU during the last two years of the SPC’s period of validity, thus allowing it to be launched on the EU market on the day following the expiry date of the SPC;
• take advantage of the above-mentioned exemptions in relation to any SPC whose basic patent will expire as from January 2021.

Finally, the text approved by the JURI provides for strong safeguards to ensure intellectual property protection within the EU and to increase transparency, establishing inter alia:

• a procedure providing for notification to the competent authorities and certificate holder two months before manufacturing of the product covered by the SPC starts;
• the obligation to adopt specific labelling for the products intended for export outside the EU to ensure that the products are not diverted to the EU market;
• the manufacturer’s obligation to inform its entire distribution chain that the product falls under the SPC exemption and is therefore intended for export and/or day-1 launch.