Lucy O’Brien, Trainee Patent Attorney, A. A. Thornton & Co.
Supplementary Protection Certificates (SPCs) are a valuable IP asset to most major life science businesses. The ability to extend the term of a patent relating to a particular medicinal or plant protection product beyond its twenty years, up to an additional five years, provides an essential compensation period for patent owners to offset any delays in the time taken to obtain marketing authorisation for the product in question. For important commercial products this additional period of market exclusivity is critical to recoup research and development costs.
However, recent changes to the EU regulation governing SPCs could have a major impact on the advantages of this extension in Europe.
On 1 July 2019, Regulation (EU) 2019/933 entered into force, commonly known as the SPC manufacturing waiver.
What is the SPC manufacturing waiver?
The SPC manufacturing waiver provides an exemption for EU-based companies to manufacture a generic or biosimilar version of an SPC protected drug exclusively for exporting outside of the EEA and into a territory where the patent protection for the drug does not exist or has expired. The waiver will only apply during the last six months of the SPC term. As well as allowing European based generics and biosimilar manufacturers to establish a market outside of the EU before expiry of the SPC, it also allows for them to begin stockpiling a product and then launch in the EEA on the day after expiry of the SPC.
In order to try and provide more certainty to the SPC proprietor, the manufacturer must inform the SPC proprietor and the national patent office three months prior to the first related act with information on who they are and where the export and/or stockpiling will take place. Currently, the waiver affects any SPC application filed on or after 1 July 2019. However, after a three year transition period, on 2 July 2022, this change will also affect any SPC application which had been filed but was not yet in force on 1 July 2019.
As SPCs are national rights, they are applied for on an individual country basis. The UK IPO have confirmed that UK manufacturers will benefit from the waiver rights, even in the case of a “no deal” Brexit. However, changes will be necessary to account for the fact that the EU legislation makes specific references to the EU market.
What are the potential problems?
The intention of creating such a waiver is to prevent generic and biosimilar manufactures from moving out of the EU and to allow them to compete with other manufacturers outside of the EU. Such a change will have a noticeable impact on SPC owners, as well as increase the competition to become the first generic on the market.
A number of EU states have raised concerns regarding the waiver, including Denmark, Czech Republic, Belgium, France and Spain. Denmark considers that a re-balance is required to prevent “undermining the strong competitive position of the EU established innovative pharmaceutical industry”, whilst the Czech Republic raised concerns that “Europe might lose its attractiveness as a centre of research and development, which might have a negative impact in particular on EU patients who are dependent on the supply of innovative medicinal products”.
The European Commission will review the effect of this waiver in July 2024, and every five years afterwards, in order to establish whether the intended benefits have been achieved. However, it is likely that patent proprietors that rely not only on the additional SPC term for protection, but also the delay from EU-based generics and biosimilar manufacturers reaching the market, will feel the effects much sooner than the five year review date.
If you have queries regarding this topic, or other pharmaceutical or biotechnological matters, please contact Lucy O’Brien at firstname.lastname@example.org or visit our website www.aathornton.com