The EU is adopting new rules which should boost the competitiveness of EU producers of generic medicines and biosimilar products. Member states’ ambassadors meeting today in Coreper endorsed a deal reached on 14 February with the European Parliament on a draft regulation which introduces an exception to the protection granted to an original medicine by a supplementary protection certificate (SPC) for export purposes and/or for stockpiling.
Thanks to the exception, EU-based manufacturers of generics and biosimilars will be entitled to manufacture a generic or biosimilar version of an SPC-protected medicine during the term of the SPC either for the purpose of exporting to a non-EU market where protection has expired or never existed or (during the six months before the SPC expires) for the purpose of creating a stock that will be put on the EU market after the SPC has expired.
SPCs are intellectual property rights that extend patent protection (for up to five years) for medicinal products that must undergo lengthy testing and clinical trials before being authorised to be placed on the EU market. The aim of SPCs is to avoid that the term of patent protection would in actuality be curtailed by the period that elapses between the date of filing of the patent application and the date of the authorisation to place the product on the market in the EU.
The regulation will remove the competitive disadvantages faced by EU-based manufacturers of generics and biosimilars vis-à-vis manufacturers established outside the EU in global markets.
The exception will operate only where:
- generics or biosimilars are produced exclusively for export to third countries where protection of the original medicine does not exist or has expired or for stockpiling purposes during the last six months of the validity of the SPC;
- the maker has provided the information required by the regulation to both the authorities of the member state of production and to the holder of the SPC at least three months in advance;
- the maker has duly informed all those involved in the commercialisation of the product;
- the maker has affixed to the packaging of the product the specific logo provided for by the regulation indicating clearly that it is only for export.
Until a set date (three years from the entry into force of the regulation), the regulation will affect only SPCs that are applied for on or after the date of entry into force of the regulation. From then on, the regulation will also affect SPCs applied for before the entry into force of the regulation, but which have become effective after the entry into force of the regulation.
The agreed text, following the usual legal/linguistic scrutiny, will be submitted for formal adoption to the European Parliament and the Council.
The EU harmonised SPC system was introduced in 1992. It sought to compensate for the loss of effective patent protection due to the time required in order to obtain marketing authorisation (including research and clinical trials).
Global demand for medicines has increased massively (reaching €1.1 trillion in 2017). Alongside this, there is a shift towards an ever-greater market share for generics and biosimilars. Assuming an annual growth rate of 6.9%, by 2020 generics and biosimilars will represent 80% of all medicines by volume, and about 28% by value.
With the expiry of industrial property protection, over €90 billion of the first generation of blockbuster biologics will become open to biosimilar competition by 2020.
The draft regulation should contribute to Europe’s competitiveness as a hub for pharmaceutical R&D and manufacturing. It will help new pharmaceutical companies start up and scale up in high growth areas, and is projected to generate, over the next 10 years, additional net annual export sales of well in excess of EUR 1 billion, which could translate into 20 000 to 25 000 new jobs over that period.