European Commission releases Inception Impact Assessment on potential reforms to SPCs and Bolar provision

On 15 February 2017, the European Commission (“EC”) released an Inception Impact Assessment (“IIA”) relating to potential reforms of the legal framework surrounding supplementary protection certificates (“SPCs”) and the Bolar provision.  The IIA sets out problems with the existing legal framework that the EC’s review aims to tackle and possible ways it might go about addressing these problems.

The IIA identifies four areas of potential concern that the initiative aims to tackle:

1. There is currently loss of export markets and lead-time to entry into Member State markets for EU-based generic and biosimilar manufacturers as a result of the existence of SPC protection in the EU but no corresponding protection in third countries. This leads to a reliance on foreign based supplies of generics and active pharmaceutical ingredients (“APIs”);
2. The current SPC protection is not adapted to deal with the changes in the global trade and  innovation model – namely, changes in relation to personalised medicines, chemicals in general, biopharmaceuticals, new uses of patented products, and intelligent pills;
3. The current Bolar and research patent / SPC exemptions are implemented in a fragmented way – specifically, there is not currently a single approach across Member States as to whether these exemptions apply to tests conducted by originator, generic and biosimilar manufacturers for the purpose of seeking marketing authorisations in non-EU countries. Also the Bolar provision as implemented in some Member States allows pharmaceutical originators to conduct testing for health technology assessments (“HTAs”) whilst in other Member States it may not; and
4. At present, there is fragmentation resulting from the current SPC system given that SPCs are granted autonomously by Member States and enforced at a national level.

Further, the IIA sets out various policy objectives of this initiative, including: creating a level playing field between EU and non-EU manufacturers of generics and biosimilars whilst maintaining a high level of SPC protection, reducing fragmentation and uncertainty associated with the Bolar provision, increasing the reliability (and reducing the cost and burden) of registration and enforcement of SPCs in the EU, including maximising the benefits of the Unified Patent (“UP”) system to those relying on SPCs, and providing the Unified Patent Court (“UPC”) with clear provisions reflecting best practice developed in Member States in relation to the patent exemptions.

The IIA sets out various options for moving forward, including: no policy change, non-legislative instruments to improve implementation of the current legislation, or legislative changes.  The legislative changes could possibly include:

1. An SPC manufacturing waiver for export purposes to allow generic and biosimilar manufacturers to export their products during the life of an SPC to countries with no SPC protection;
2. Updates to the existing framework, including: amendments to SPC eligibility, scope of protection and registration procedures;
3. Clarification and recalibration of the scope of Bolar and research exemptions to cover, for example, testing for foreign marketing approval and HTA; and
4. Creation of a European SPC to make the UP system more attractive to SPC users who may think it unappealing to have a UP but national SPCs.

Ultimately the initiative envisaged in this IIA will assess the various options for moving forward and what is the most cost-efficient mix of the options.  Drafting of the full impact assessment is due to start this year, with the aim of it being submitted to the Regulatory Scrutiny Board by the end of the year.  The IIA makes it clear that any actions related to this initiative will seek to complement and enhance the coherence of the UP package.

This post was originally co-authored by Robyn Trigg.