EU moves to strengthen competitive position for manufacturers of generics and biosimilars

With the purpose of allowing EU-based manufacturers of generics and/or biosimilars to compete in global markets while supplementary protection certificates (SPCs) remain in force in the EU, the European Commission proposes to amend Regulation (EC) No 469/2009 concerning SPCs for medicinal products.

The proposed amendment introduces an exemption to the effect that manufacturers of generics or biosimilars are allowed to manufacture, in the territory of a Member State during the term of an SPC, for the exclusive purpose of exporting the products manufactured to non-EU Member States in which protection does not exist or has expired.

The present issues

According to the Commission, EU-based manufacturers of generic and/or biosimilar medicinal products currently face a significant problem, as they, during the SPC term of protection, are not allowed to manufacture SPC protected  products for any purpose, including export outside the EU to countries where SPC protection has expired or does not exist. The Commission identifies this as a problem since non-EU manufacturers do not face the same restrictions. Consequently, the EU-based industry is put at a disadvantage in global markets, but also in the so-called day-1 EU markets because EU-based manufacturers are also restricted from building up production capacity before the SPC has lapsed. Compared to non-EU-based manufacturers, this makes it more difficult for EU-based manufacturers to enter the EU market immediately after SPC expiry. According to the Commission, these are unintended challenges which could lead EU-based companies to move production outside the Union.

The proposed amendment

With its new proposal, the Commission seeks to counter the problems by introducing a so-called “export manufacturing waiver”, i.e. an exemption which limits the scope of protection for SPCs in the EU in regard to medicinal products manufactured for the exclusive purpose of being exported to countries outside the EU in which protection does not exist or has expired. The intention is to equal competition between EU-based and non-EU manufacturers in export markets.

However, the proposed manufacturing waiver also indirectly addresses the EU day-1 entry issue, given that it would be much easier for an EU-based manufacturer which has already set up a manufacturing line for export purposes to, after SPC expiry, quickly start using the same line to manufacture generics or biosimilars aimed at the EU market. The idea is that the proposed change thereby enhances the competitive position of generics/biosimilar manufacturers in both the internal and global markets.

Safeguarding

In order to safeguard the interests of the innovative originators of medicinal products, the Commission proposes a notification system which imposes a duty on the manufacturer of the generics / biosimilars to notify the competent patent authority in the Member State where production is to take place no later than 28 days prior to the intended start date. The notification must include certain information on the production and of the intended recipient third country, and such information shall be published by the authority within 15 days of receipt.

Further, the Commission proposes that the outer packaging of any product manufactured under the manufacturing waiver must be labelled with a specific “EU export”-logo indicating that the product is exclusively intended for export to countries outside the EU. At the same time, the manufacturer shall be obligated to fully inform their supply chain of the notification and labelling conditions while also making such aware that the placing on the market, import or re- import of the product into the EU market would infringe the SPC.

The amended regulation is expected to enter into force in 2019.

Comments

The proposed amendment will contribute to an even fiercer competition on the generics/biosimilar markets, as the amendment proposed may allow companies to build up production capacity in advance, and, thus, be ready to enter the market immediately upon SPC lapse with a view of battling for the ever-important early market shares.

It is, however, worth noticing that the proposed manufacturing waiver is not intended to affect the current SPC-protection regarding the placing of products on the EU market. SPC protection in the EU will remain unaffected throughout the term of protection.

Source: Acc