Planned EU changes on SPCs and the Bolar exemption sharply divide the sector

The EU Commission is currently consulting on several features of the patent system particularly relevant to the life sciences sector, focusing on supplementary protection certificates and  exemptions from patent infringement.  A “recalibration” of some aspects of protection in the pharma and other regulated industries is planned, either using guidance or with legislative changes.

Possible changes include:

  • A new EU-wide supplementary protection certificate

Supplementary Protection Certificates, SPCs, are currently granted nationally based on EU legislation. They offer extensions of up to five years to the standard 20 years of patent protection for pharmaceutical and plant protection products. SPCs are intended to offset patent-protected time that is eaten up by the time-consuming compulsory testing and clinical trials process necessary to obtain marketing approval. 

Interpretation of the legislation has not been uniform across member states, resulting in conflicting decisions as well as multiple references to the European court. DG Growth’s statistical analysis shows that 26% of SPC applications referring to the same basic patent produced divergent results between member states.

SPCs are not dealt with in the planned Unitary Patent/Unified Patent Court system. This was highlighted as another important reason behind the creation of a unitary SPC in the Commission’s single market strategy communication in October 2015. But the Unitary Patent is now in serious doubt, not only through Brexit, but also the legal challenge brought against its ratification by Germany currently before the German Federal Constitutional Court. So this rationale may fall away.

  • Extending of the scope of EU patent research exemptions

The so-called “Bolar exemption”, allowing generic producers to gear up for launch by carrying out activities directed towards gaining regulatory approval prior to patent (or SPC) expiry, also comes in for examination. Again the Commission highlights differences in approach taken by member states in applying the relevant legislation. For example, there are differences in how national courts view the supply of active ingredients to EU-based generic manufacturers who intend to use them to seek marketing authorisations. And it is not always clear whether testing to meet the requirements of health technology assessments bodies (the UK’s NICE, for example) or testing to satisfy non-EU regulators will be covered.

  • Introduction of an SCP manufacturing waiver

This would allow EU-based manufacture of generic or biosimilar products for export to countries with no SPC protection. The change, it is argued, would bring economic benefits to the European economy as it would allow production in Europe for supply to countries where no patent protection exists, and it would allow stockpiling for launch as soon as European protection expires. But research commissioned by pharma trade body EFPIA argues against this analysis, pointing out the following likely adverse effects:

  • generics manufactured in Europe would be more likely to compete for market share than domestically manufactured generics, leading to a quicker replacement of the originator product
  • non-EU countries often incentivise domestic manufacture. This is likely to favour large, international generics producers able to commence local manufacture rather than EU-based manufacturers.

Generics and biosimilars industry body, Medicines for Europe, is strongly supportive of both the SPC manufacturing waiver and the Bolar harmonisation, with Director General Adrian van den Hoven commenting:

“the CRA study [part of the evidence package published by the Commission] shows the huge benefits that the SPC Manufacturing Waiver and Bolar harmonisation offer Europe in terms of jobs, manufacturing and a lower overall medicines bill. The Commission must now legislate to make this a reality.”

Given the importance of SPCs and the Bolar exemption to both innovators and generic companies these changes to the system are contentious. The effects of the changes on different operators within the sector are not always obvious and opinion on the impact the plans would have appears to be sharply divided.

The consultation remains open until 4 January 2018.

 

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