In 2019, the industry will be watching very closely developments in relation to the proposed reform of the SPC Regulation in the form of a 'manufacturing export waiver'. As drafted by the EU Commission in May 2018, the proposal was described as a 'targeted amendment' to allow manufacturers of generic and biosimilar products to manufacture in the EU those versions of an SPC-protected product during the term of the relevant SPC, provided it is done exclusively for the purpose of exporting to a non-EU market where protection has expired or has never existed.
The proposal has now been considered by the European Parliament (in various committees) and by the EU Council, and the next stage is for inter-institution (or trilogue) discussions to finalise the text, before the new Regulation can come into force.
A key issue in these discussions will be 'day one launch' – namely, allowing generic and biosimilar manufacturers to be in a position to launch in the EU immediately after expiry of the SPC (at present, they are unable to do so as they cannot begin manufacturing in the EU until day one after SPC expiry). The Legal Committee of the European Parliament voted in favour on 23 January 2019 on a number of amendments (for further details, see the Medicines for Europe website) to the Commission's proposed text, including to provide that stockpiling during the final two years of an SPC will be permissible, in order to allow a day 1 launch in the EU on expiry of the SPC.
However, the Council's approved negotiating mandate for the discussions (adopted on 16 January 2019) does not provide for stockpiling to allow for day one launch in the EU, but limits the scope of the protection for the purposes of export outside the EU. However, in its Press Release, the Council suggests there will be some benefits vis-à-vis EU markets in terms of building up production capability: "the draft regulation is expected to remove the competitive disadvantages faced by EU-based manufacturers of generics and biosimilars vis-à-vis manufacturers established outside the EU in global markets, but also in day-1 EU markets by building up production capacity."
There will also be discussions during the trilogue negotiations over when the waiver should take effect and whether it should apply to SPCs applied for before the date the Regulations enters into force, but which are granted after that date.
When launching its proposal, the Commission predicted that the waiver will generate at least €1 billion per year in net additional export sales in the EU pharmaceutical sector and create up to 25,000 extra highly skilled jobs over the next ten years.
Advocate General proposes return to literal interpretation of SPC Regulation in Abraxis case
On 13 December, Advocate General Saugmandsgaard ØE issued his Opinion in Abraxis Bioscience v Comptroller General of Patents, on the question of whether an SPC can be granted under Article 3(d) of the SPC Regulation where a product protected by a marketing authorisation is a new formulation of an active ingredient which is protected by an earlier marketing authorisation (as opposed to a new therapeutic use of an active ingredient, as in the Neurim case). We discussed the background to the case, a reference from Arnold J in January 2017, in our April 2017 edition. SPCs have been granted to Abraxis in nine Member States but rejected in Sweden and the UK, with other decisions pending.
The Advocate General suggests that this divergence may be as a result of differing interpretations of the CJEU's Neurim decision. He proposes a move away from the teleological interpretation of Article 3(d) back to a literal interpretation in all situations, by abandoning the scope of protection of the patent test, given the restrictive meaning adopted by the Court in other cases of the concept of the 'product' within Article 1(b) of the SPC Regulation. Accordingly, in his view, there should be no SPC protection in this case as, whilst the marketing authorisation relied upon is the first to fall within the scope of the basic patent protecting the new formulation of a known active ingredient, it is not the first marketing authorisation for that active ingredient.
In particular, he notes that "the intention of the legislature, in establishing the SPC regime, was not to protect all pharmaceutical research sufficiently innovative to give rise to the grant of a patent and the marketing of a new medicinal product, but only research leading to the placing on the market for the first time of an active ingredient or a combination of active ingredients as a medicinal product. That research must be encouraged whatever its purpose, regardless of whether it concerns the product itself or a process to obtain or therapeutic use of that product".
As an alternative, he suggests limiting the application of the scope of protection of the basic patent test to within the factual constraints of the Neurim decision, namely a product previously authorised for a therapeutic indication in veterinary medicine which is subsequently granted a marketing authorisation for a new therapeutic indication in human medicine.
The CJEU's decision will be significant as it will present the opportunity for the Court to re-examine the scope of the Neurim decision and its implications. Of course, the status and timing of Brexit negotiations may have an impact (similar timing issues may affect the CJEU's hearing in Sandoz v Searle).