SPC update: generics and biosimilar medicines for exporting and stockpiling
On Wednesday, the Committee on Legal Affairs approved updated rules on supplementary protection certificates designed to boost the competitiveness of EU-based pharmaceutical companies.
On Wednesday, Legal Affairs MEPs voted draft rules intended to restore the level playing field between EU-based generic and biosimilar drug manufacturers and competitors in non EU-based companies, by updating existing rules for intellectual property rights of medicinal products, more specifically in the area of supplementary protection certificates (SPCs).
Eliminating unintentional legal barriers
Current rules create unintentional legal barriers for EU-based manufacturers of generics and biosimilars, according to which companies are unable to build up production capacity before the protection has lapsed, thus cannot enter the EU market immediately after the SPC expiration (day-1 entry) nor export to third countries, where protection has expired or does not exist. This has put European manufacturers at a disadvantage, say MEPs, as non-EU companies are not affected by such restrictions. Â
The draft rules put in place exceptions that allow manufacturers to:
- lawfully manufacture a product for export to third countries during the SPC period, and;
- stock the product for the last 2 years of the SPC period, thus allowing day-1 launch on the EU market after the SPC expires.
These exceptions will re-affirm the attractiveness of the EU as a global hub for investments in innovative pharmaceutical research, believe MEPs, while also lowering costs and improving access to generics and biosimilar medicines inside the EU.
Introducing strong safeguards
The proposal includes strong safeguards to ensure the protection of intellectual property in the EU and increase transparency:
- Notification procedure to alert competent authorities and certificate holders before the start of production (within two months);
- Labelling obligation for export products, e.g. logos, guaranteeing the product is not diverted towards the EU market;
- Due diligence requirement on the manufacturer to inform persons in its supply chain that the product is covered by the exception and is intended for the purpose of export and/or EU day-1 entry.
The rapporteur Luis de Grandes Pascual (EPP, ES) said: "We are happy that all the groups could reach an agreement today and that the report was received with such overwhelming support. Our goal was to find a balance proposal, which serves generics producers and EU innovators at the same time. This is an important step in solidifying EU's role in pharmaceutical manufacturing and innovation"
The draft report was approved by 22 votes to 2 and the mandate to start negotiations was confirmed with 22 votes against 1. Negotiations with EU ministers can start once the Parliament as a whole gives its green light and the Council reaches its negotiating position.
Supplementary protection certificates (SPCs) are an intellectual property right that allow the extension of patent rights by up to a maximum of five years. During this period, EU-based manufacturers cannot produce, even for exporting purposes in third countries where SPC protection does not exist or has expired.
Reliance on SPCs is significant in the EU, as global pharmaceutical markets are undergoing profound change and shifting towards an increased market share for generics and biosimilar medicines, with global demand reaching 1,1 trillion euro in 2017. With an annual growth rate of 6.9% by 2020, biosimilars and generics are projected to represent 80% of all medicines by volume and 28% by value.
On 28 May 2018, the Commission proposed to amend Regulation (EC) no 469/2009 concerning the supplementary protection certificate for medicinal products. This initiative was first considered in the Single Market Strategy of 2015.