Upgrading the single market: SPC manufacturing waiver

December 2015

On 28 October 2015 the European Commission published a Communication titled "Upgrading the Single Market: more opportunities for people and business". This states, in section 3.3 "Consolidating Europe’s intellectual property framework", on page 15:

    To strengthen EU-based manufacturing and competitiveness in industry sectors whose products are subject to regulated market authorisations, the Commission will explore a recalibration of certain aspects of patent and SPC protection. An SPC manufacturing waiver could allow the European generic and biosimilar medicines industries to create thousands of high-tech jobs in the EU and many new companies. An update of the scope of the EU patent research exemption would lead, among other things, to a smooth supply of active pharmaceutical ingredients throughout the Single Market.

SPC manufacturing waiver

The rationale to this statement is provided in a Commission staff working document accompanying the Commission Communication. At section 3.3.3 this explains the disadvantage faced by EU-based manufacturers when producing for export markets:

    …manufactures of generic and biosimilar medicines based in non-EU countries where SPC protection does not exist (e.g. in Brazil, Russia, India and China) enter markets in which patent protection expired up to five years earlier than EU-based manufacturers. This is possible because EU-based manufactures are not allowed to produce in EU Member States during the period of the SPC protection of the reference medicine. Furthermore, this situation, under certain circumstances, gives an untended lead-time advantage to non-EU based operators to enter EU Member States following the expiry of that SPC protection. Such a situation could have the effect of encouraging European manufacturers of generic and biosimilar medicines to move their production outside the EU - either via delocalisation or long-term outsourcing contracts - to overcome these legal hurdles and to stay competitive.

As a result the Commission intends to consider, among other changes, a targeted SPC manufacturing waiver for export purposes that could allow EU-based manufacturers of generic and biosimilar medicines to compete on an equal footing with competitors from non-EU countries.

In a press release, Adrian van den Hoven, Director General of the European Generic Medicines Association states:

    The European generic and biosimilar medicines industry is on the cusp of creating many more jobs as it expands access to high quality medicines for patients. Europe needs to rapidly introduce a targeted SPC waiver to capitalize on this tremendous opportunity for pharmaceutical manufacturing in the EU.

There is no precise timescale given to any of the ideas outlined in the Communication. The Commission states that it will come forward with initiatives to consolidate and modernise the intellectual property framework and that it envisages that its overall strategy for upgrading the single market will be launched in 2016 and 2017.

Other initiatives being considered by the Commission include a unitary SPC and modifications to the Bolar exemption regime in the EU.

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Paul England

Paul is a senior associate and professional support lawyer in the Patents group based in our London office.

"a targeted SPC manufacturing waiver… could allow EU-based manufacturers of generic and biosimilar medicines to compete on an equal footing with competitors from non-EU countries"