SPC manufacturing waiver to be amended in 2024? 

Pharmaceutical companies in the European Union (EU) are entitled to a sui generis form of protection for their approved innovative drugs called the Supplementary Protection Certificate (SPC). These SPCs lengthen the market protection of the approved innovative drugs by up to five years to recoup the time lost in getting approval from the European Medicines Agency (EMA).

Prior to introduction of Regulation (EU) 2019/933, during the SPC protection period, the generic and biosimilar manufacturers were not permitted to manufacture the drugs within the EU for export to third country markets or for day-1 launch in the EU post the SPC expiry. This turned out to be the biggest competitive disadvantage for the EU manufacturers.

To strike a balance between restoring a level playing field between generic and biosimilar manufacturers and ensuring that the essence of the exclusive rights of SPC holders is definite in relation to the European Union market, the SPC manufacturing waiver (‘SPC Waiver’) was introduced in the EU across all member states on 1st July 2019 with Regulation (EU) 2019/933 (“SPC Waiver Regulation”).

Under this Regulation, generic and biosimilar manufacturers are allowed to obtain a waiver to manufacture SPC-protected medicinal products for export to third country markets where patents for those medicinal products have completed their term or were never filed. The regulation also permits the stockpiling of generic and biosimilars during the last six months of SPC protection to enable day-one launch for those medicinal products.

So far, member states like Germany, Spain, Ireland, and Portugal have published few notifications of SPC waivers by Amgen, Alter Labs, Normon Labs, Biogaran etc. for drugs such as Ustekinumab, Sugammadex, Sitagliptin, Vildagliptin, Rivaroxaban and Ticagrelor¹. A few of these waivers have also been withdrawn by the applicants themselves. This is because during the first usage of the SPC Waiver Regulation, companies have experienced significant flaws and complications such as:

1. Unnecessary disclosure of commercially sensitive information such as (i) the country of manufacturing, (ii) the third country information, and (iii) the supply chain information (e.g., in relation to country of related acts).
2. The risk of frivolous/abusive litigation – SPC holders sending warning letter and suing the maker in the country of export, but not in the country of manufacturing.
3. The unnecessary 6 months’ time limitation – products destined for EU Member States can be made and stocked only during the last six months of SPC protection. 6-month period for making and stockpiling is insufficient to produce a finished dosage form especially for more complex products.

There is a 5-year period to revise the regulation and assess if it has achieved its stated objectives. In view of this, the following policy recommendations have been given:

1. The 6-month time limitation for making products destined for EU Member must be deleted. It prevents day-1 competition in the EU, especially for complex products, such as biosimilars. It also creates uncertainty in case an SPC paediatric extension is granted while a SPC Waiver is already in use.
2. Allow intra-EU export to EU countries with no SPC in force.
3. The notification of SPC waiver should be sent only to National Patent Offices and SPC holder, and only a receipt of notification should be published by the National Patent Office.
4. Highly commercially sensitive information throughout the whole supply chain should not be made accessible to SPC holders to avoid unnecessary litigation.
5. The EU needs a single SPC manufacturing waiver without differentiation between “export” and “stockpiling” waiver, and without any limitations regarding storage and intra-EU transportation, which today prevent Day-1 launch and timely access in some Member States frustrating the EU single market rule.

The legislators should at the earliest fix the evident flaws in the current SPC Manufacturing Waiver legislation, i.e. immediately after the first review period, in 2024. A further delay can result in losing further business investments in Europe.

References:

1. https://patentblog.kluweriplaw.com/2022/10/17/analysing-the-use-of-the-spc-waiver-provisions-and-its-reach-outside-the-eu/
2. https://www.medicinesforeurope.com/wp-content/uploads/2023/06/4-SPC-Waiver-REPORT-Medicines-for-Europe-12-June-2023-1.pdf