Legal Alerts / 1 Jul 2019

The SPC Manufacturing Waiver for Generics and Biosimilars Entering into Force on 1 July 2019

The recently approved Regulation (EU) 2019/933 (working title “SPC Manufacturing Waiver”) of the European Parliament and of the Council of 20 May 2019 amending Regulation (EC) No 469/2009 concerning the supplementary protection certificate for medicinal products introduces new exemptions to the exclusive right of supplementary protection certificates (“SPC”). The exemptions brought by the regulation will benefit EU-based manufacturers of generics and biosimilars. They will apply to exporting generics and biosimilars to third countries and enable EU-based manufacturers to store medicinal products for a period of six months preceding the expiry of an SPC.

The approved Regulation was published in the Official Journal of the European Union on 11 June 2019 and will enter into force on 1 July 2019.

Key changes

The SPC Manufacturing Waiver allows EU-based companies to manufacture a generic or biosimilar medicinal product that is still covered by the SPC on two grounds:

  • Firstly, medicinal products may be manufactured for the purpose of exporting them to third countries, where the protection has expired or where such protection has never existed.
  • Secondly, medicinal products may be manufactured for storing during the final six months before the expiry of the SPC, thus allowing an instant day-one launch on the internal market at the moment of the SPC’s expiration.

Any related acts that are strictly necessary for manufacturing in the EU, or for the actual storing, are exempted as well, provided that such related acts are carried out no earlier than six months before the expiry of the SPC.

However, it is stated in the Regulation that the Manufacturing Waiver will not apply to any act or activity carried out for the import of products, or medicinal products containing those products, into the EU merely for the purpose of repackaging, re-exporting or storing.

Manufacturers that make use of the exceptions will be subject to a number of obligations, such as notifying competent national patent authorities and SPC holders at least three months in advance before the start of production. Products exported outside the EU will also have to be labelled with a predefined logo, the objective of which is to ensure that any medicinal products that have been made for the purpose of export to third countries will not be re-imported back to the EU market for as long as the concerned SPC applies. Manufacturers are also obliged to inform persons in their supply chain that the products in question are covered by the exception for the purpose of export and/or stockpiling for a day-one entry into the EU market.

The exception will apply to SPCs that are applied for or take effect on 1 July 2019 or after. However, if the SPC has been applied for before 1 July 2019, the SPC Manufacturing Waiver will only apply to such certificates from 2 July 2022 onwards. If the SPC takes effect before 1 July 2019, it will not be subject to the SPC Manufacturing Waiver.

Objectives of the amendment

SPCs have been considered to put EU-based manufacturers of generics and biosimilars at a competitive disadvantage with their non-EU based counterparts. This disadvantage has included a risk of delocalisation of pharmaceutical manufacturing and loss of investment into the European market.

The number of SPC applications submitted annually has increased from 1993 to 2013, with many certificates nearing expiry at the upcoming turn of the decade. The consequent entry of a substantial amount of medicinal products into the public domain requires for generics and biosimilars for these patented products to be able to enter the market immediately after the expiry of their term of protection.

The reform can be seen as a balanced compromise between the interests of SPC holders on the one hand and the improvement of the competitiveness of manufacturers of generics and biosimilars on the other. The new exception will also benefit patients. Furthermore, the exceptions can be regarded as limited adjustments, which will not affect the duration or the central objective of the SPC system. The core protection and enforcement of SPC rights will remain equivalent to their current state with SPC-protected medicines retaining their full market exclusivity in the EU.

Borenius’ lawyers are available to assist in addressing any questions you may have regarding this legal alert. Please feel free to contact any of the Borenius’ attorneys listed in this alert or those with whom you usually work.

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