On Monday 28 May, the European Commission announced its latest initiative under the single strategy for the internal market, viz a targeted revision of the regulation concerning the Supplementary Protection Certificate (SCC) for manufacturers of generic medicines and biosimilars for non-European markets.
The adjustment could generate up to 25,000 new jobs over ten years, according to the projections of Internal Market and Industry Commissioner Elżbieta Bieńkowska, who explained at a press conference that the proposal was inspired by practices in countries outside the EU, such as Canada.
The amended regulation would allow European manufactures to avoid losing international market share and would help them prepare for the upcoming increase in international competition in 2020 when a raft of patents fall into the public domain, she explained.
Anti-diversion safeguards
The European Commission has amended Article 4 of the Regulation on the aim of projection and exemptions to the rights granted by the SPC. It will thus be possible for manufacturers to make their products in a member state during the duration of an SPC (for up to five years, in addition to the duration of the patent, which can last 20 years) for the sole purpose of exporting to non-EU markets where protection from a patent or SPC has expired or never existed, explains the Commission in the regulation.
The Commission added a number of anti-diversion measures, viz the obligating for manufacturers wanting to export generic medicines or biosimilars to countries outside the EU to notify independent national public bodies no later than 28 days of the start of the manufacturing process.
The Commission adds the obligation of special labelling for exports with a logo based on a nodal provided in an annex that must be placed on a product’s outer packaging.
Manufacturers will be required to meet due diligence demands vis-à-vis the people in their supply chain. This means that they just ensure the people they work with are fully informed of the special nature of the derogation and do not carry out any imports.
The exception will only apply to SPCs which have not yet been granted (three days after publication of the regulation in the EU Official Journal), and after a transition period, in order to leave national authorities enough time to establish the necessary systems of receiving notification for requesting derogations.
The SPC system was established in 1992 with the aim of reducing the impact of the end of patent protection, whose duration is often too short to compensate for the cost of pharmaceutical research. Hence the introduction of an extra protection period lasting from a day to a maximum of five years.
This prolongation prevents EU manufacturers from entering the EU market immediately after expiry of the certificate, because they do not have the right to prepare protection while the certificate is in existence. This obstacle does not face non-EU manufacturers, which gives them a decisive advantage when it comes to introducing a new product.
Concern from the pharma industry.
The European Federation of Pharmaceutical Industry Associations (EFPIA) is unhappy with the European Commission’s proposal.
‘The Commission’s proposal reduces IP rights and thereby jeopardises patient access to innovative treatments. It also sends a global signal that Europe is weakening its commitment to intellectual property,’ says the EFPIA.
The organisation points out: ‘Approximately half the patent life of a new treatment is lost during the research, development and regulatory processes and the SPC went some way to restoring some of that patent life.’ (Original version in French by Pascal Hansens)