EC to update IP rules to benefit generic exports

The European Commission (EC) is proposing to adjust intellectual property (IP) rules to help Europe's pharma companies tap into fast-growing global markets.

The EU has a strong IP rights framework to protect European pharma innovation and is now seeking to remove a major competitive disadvantage for EU manufacturers with a targeted amendment: the so-called 'export manufacturing waiver' to Supplementary Protection Certificates (SPCs).

SPCs extend patent protection for a maximum of five years for medicinal products, which undergo lengthy testing and clinical trials prior to obtaining regulatory marketing approval. Thanks to the waiver, in the future EU-based companies will be entitled to manufacture a generic or biosimilar version of an SPC-protected medicine during the term of the certificate, if done exclusively for the purpose of exporting to a non-EU market where protection has expired or never existed.

Vice-President Jyrki Katainen, responsible for Jobs, Growth Investment and Competitiveness, speaking on 28 May 2018, said: "Our rules on intellectual property protection of pharmaceuticals promote innovation and creativity. We are committed to the core rights and the length of this protection, which remain unchanged. Today we are proposing a well-calibrated adjustment to the current regime to remove a legal barrier that was preventing our companies from competing on equal terms on global markets where competition is fierce. We want to make sure that our pharmaceutical industry reaps the benefits of such competition."

Elżbieta Bieńkowska, Commissioner for Internal Market, Industry, Entrepreneurship and SMEs, added: "Today's proposal strikes a balance between the imperative to ensure the attractiveness of Europe for innovative pharmaceutical companies and the urgency to allow EU-based generics and biosimilars to compete on the global markets … It could generate €1 billion net additional sales per year and up to 25,000 new jobs over 10 years."

With the waiver, IP protection for medicine production in Europe will remain the strongest in the world. SPC-protected medicines will retain their full market exclusivity in the EU.

The proposal is accompanied by a series of safeguards which will create transparency and prevent IP-infringing products from entering Member State markets. It goes hand in hand with other EU initiatives to defend Europe's know-how and innovation leadership and protect patients against counterfeited medicines.

The proposal amends Regulation 469/2009 on the supplementary protection certificate for medicinal products. Once adopted by the European Parliament and Council, it will be directly applicable in all EU Member States.

Many SPC protections will start to lapse from 2020, generating significant new market opportunities for generics, and for biosimilars in particular, creating an urgent need to update the existing regulation.

The proposal was announced in the Commission's 2015 Single Market Strategy, and follows various studies, an extensive consultation and a European Parliament resolution endorsing the need to introduce an SPC manufacturing waiver before 2019.