European Parliament Votes in Favor of SPC Waivers for Generics and Biosimilars

Yesterday, the European Parliament approved a proposal to allow waivers of supplementary protection certificates (SPCs) for EU generics and biosimilars by a vote of 572 to 36.

An SPC is an intellectual property right that grants an extension of up to 5 years on a 20-year patent term for an innovative drug. The goal of the SPC is to offset the loss of patent protection that occurs during the development and clinical trials of a generic or biosimilar. When implemented in 1992, the SPC system sought to provide the pharmaceutical industry with sufficient incentives to develop innovative products within the European Union and to prevent companies from relocating to other countries.

Under the newly approved proposal, an SPC waiver will allow EU biosimilar developers and generics makers to manufacture products that are protected by SPCs (while the SPCs are still in force) if the manufacturing is conducted to facilitate export to a non-EU market where there is no protection of the original medicine.

The new rule will also allow companies to stockpile products during the last 6 months of an SPC’s term in order to allow for a day-1 launch of these products in the EU market after the SPC’s protection expires.

Generic and biosimilar makers will be required to notify authorities before they start production of their products, meet labeling obligations to ensure that their products are not diverted to the European Union, and inform their supply chains that the products cannot be sold in the EU market before the day-1 entry.

The rule will next be formally adopted by EU ministers and published in the EU Official Journal. The rule is expected to come into force in July 2019, after which companies will be permitted to begin manufacturing under the waiver from July 2022.

Medicines for Europe (MFE), a generic and biosimilar trade group, commended the European Union for adopting the waiver. Adrian van den Hoven, director general of MFE, said in a statement that the “vote on the SPC manufacturing waiver reflects the EU’s commitment to access to medicines, manufacturing jobs in Europe and putting EU industry on a level playing field globally. Europe has everything to gain from fully implementing the waiver to enable more competition on the pharmaceutical market and to improve its own security of medicines supply.”

The European Federation of Pharmaceutical Industries and Associations (EFPIA), however, said in its own statement on the vote that the new rule will negatively impact innovator companies’ ability to develop new therapies and that it “sends a negative signal to the world that Europe is devaluing its intellectual property framework, making Europe a less attractive location for research and development, impacting on jobs and investment.”

EFPIA called on the commission to “redress the balance” by fast-tracking breakthrough therapies and supporting research and development opportunities.