European Commission Proposes Changes to SPCs to Boost Biosimilars

This week, the European Commission (EC) proposed a “recalibration” of Supplementary Protection Certificates (SPCs) to boost investment in the development and manufacture of biosimilars and generics.

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 pharmaceutical. 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 it was first implemented, 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.

The new proposal seeks to amend the European Union’s legislation on SPCs to introduce a manufacturing exemption for export purposes during the term of an SPC. The exemption would restrict the protection conferred by the SPC in order to remove competitive disadvantages to EU-based generics and biosimilars manufacturers, namely by allowing a drug maker to manufacture a product in an EU member state for the sole purpose of exporting the product to a non-EU market (ie, a market that is not subject to an SPC).

According to the proposal, when in 2017, the EC launched a public consultation on SPCs, comments demonstrated broad support for the proposed waiver; while the SPC initially sought to spur innovation, the EC’s proposal notes that biosimilar and generic products will represent 80% of all medicines worldwide by volume in the year 2020, and SPCs keep EU-based manufacturers from producing any generics or biosimilars for a covered drug—even if the manufacture is exclusively for export to another market—during the protection period. “This problem puts EU-based industry at a disadvantage,” says the proposal, because manufacturers in non-EU countries do not fact the same restrictions.

Under the proposal, once an SPC has expired, biosimilar and generics companies who have established manufacturing lines for their export products will be able to use the same lines to manufacture products to supply the EU marketplace, an approach that the EC says will strengthen the EU supply chain.

The proposal notes that SPC protections will be left intact in the European Union, and that the EC will undertake a series of safeguards to ensure that products intended for export are not diverted to the EU market.