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European Council Position on Commission Proposal for SPC Manufacturing Waiver

On 28 May 2018 the European Commission published1 a proposal for a change in the law (see discussion here and here), which would permit third parties to manufacture a medicinal product protected by a Supplementary Protection Certificate for the exclusive purpose of export to countries outside the EU.

The European Council has now responded to the proposal. The Council’s position is set out in the Council’s Mandate2 for negotiations with the European Parliament. The Council largely endorses the Commission’s proposal but argues for changes in some areas, most notably in the transition arrangements which will set the SPCs to which the waiver will apply.

The European Parliament will now consider the Council’s proposals, probably before the European Parliament elections in May 2019.

Scope of the proposed manufacturing waiver

The Commission proposal was that a waiver will be provided by a Regulation to amend the existing Medicinal Products Supplementary Certificate (SPC) Regulation (469/2009). The amendment to the SPC Regulation would permit third parties to manufacture a medicinal product protected by an SPC for the exclusive purpose of export to countries outside the EU. The Council endorses this approach, although it does so by amending Article 5 of the SPC Regulation (effects of the certificate) which seems more appropriate than amendment to Article 4 (subject matter of protection) proposed by the Commission.

The Regulation would exclude certain acts from the protection conferred by SPCs. In particular it would permit a third party (described in the Regulation as a “maker”) to make the product (active ingredient or combination of active ingredients) protected by the SPC or a medicinal product containing that product, in either case for the exclusive purpose of export to countries outside the EU.

The rights of manufacture include authorisation for ancillary activities which are “strictly necessary” to enable the manufacture and export of the product. These would include, for example, the importation of API into the EU to enable the preparation of a formulated medicinal product and the temporary storage of product or medicinal product within the EU for the exclusive purpose of export to countries outside the EU. Rights will also extend to contract manufacturing organisations and distributers acting on behalf of the party which is exporting the medicinal product.

Requirements for the maker to benefit from the waiver

The proposed legislation will impose some formal requirements on any maker seeking to take advantage of this exemption, including an obligation to notify certain information, the requirement to use an EU export logo and the requirement to inform contractors that acts other than those covered by the waiver might infringe the SPC.

Notification

The Council argues for some changes to the Commission proposal on notification, as follows:

Commission proposal: a one off obligation to notify the national patent office of the member state where making is to take place at least 28 days before the intended start date of manufacture. The notice must include specified information including:

  1. the name and address of the maker,
  2. the address or addresses where the manufacture is to take place,
  3. details of the SPC,
  4. details of the maker’s manufacturing authorisation or certificate of good manufacturing practice3,
  5. the intended start date of manufacture, and
  6. an indicative list of intended third countries to which the product is to be exported.

The notification must be published by the patent office within 15 days of receipt.

Council proposal: a continuing obligation, with information to be updated if it changes, to notify the national patent office and the SPC holder no later than three months before the start date of manufacture in the member state, or no later than three months before the first related act prior to that making if earlier. The notice must include specified information including:

  1. the name and address of the maker,
  2. the member state where the making is to take place and the member state where the first related act prior to that is to take place,
  3. details of the SPC in the country of making and the country of the first related act prior to making,
  4. [deleted],
  5. [deleted], and
  6. for medicinal products the reference number of the marketing authorisation in each country of export or, failing that, the name of the country of export. Failure to comply in respect of a country of export would mean exports to that country would not benefit from the waiver.

Any changes in the above details must be notified to the national patent office and certificate holder before the changes take effect. The information together with the date of notification and any changes shall be published by the national patent office as soon as possible. Member states may impose a fee for the notification.

Comment on changes: the proposed changes give the SPC holder more time. The SPC holder is directly notified at least 3 months before manufacture rather than indirectly via publication by national patent offices once the patent offices have received notification as little as 28 days before manufacture. However the changes require the maker to provide less information on manufacturing location or timing of intended manufacture and in general provide less certainty that manufacture is truly contemplated [changes to (b) and deletion of (d) and (e)]. Despite the fact that national patent offices can apply a fee to notifications, this arguably makes it more likely “makers” with no concrete plans to manufacture will file precautionary notifications in case they want to manufacture in the future. It will be harder for an SPC holder to identify which makers will in fact enter the market for export outside the EU and when.

Export logo

The maker must ensure a specified logo is affixed (indicating it is a product for EU export). The Commission proposal required application of the logo to the outer packaging or, if there is no outer packaging, to its immediate packaging. The Council argues the logo should be affixed to the outer packaging of the product or medicinal product and, where feasible, to its immediate packaging.

Information to contractors

The Council’s position on the maker informing persons in a contractual position with the maker is broadly the same as the Commission proposal. The maker must ensure that persons in a contractual relationship with the maker and who carry out “strictly necessary” related acts are full informed and aware that those acts are subject to the conditions for application of the waiver (including the export only condition) and that placing on the market (other than by the maker in a notified non-EU export country), import or re-import of the product might infringe the SPC.

Transitional provisions

The Commission proposed that the new legislation would only apply to SPCs which had not been granted on the first day of the third month following the date of publishing the Regulation in the Official Journal.

The Council rightly points out that the Commission proposal based on SPC grant would lead to distortion between EU member states because the date of grant can vary significantly from one member state to another. As an extreme example, Luxembourg grants early, shortly after an application for an SPC is filed. Its neighbour Belgium grants late, not examining an SPC application until shortly before the patent on which it is based is due to expire. The Commission’s proposal would provide for up to 15 years where there would be the potential for those products that are the subject of SPCs to be manufactured in Belgium for export, but not be manufactured in Luxembourg for export.

The Council argues for the following transitional provisions:

  • An SPC in force at the date of entry into force of the Regulation (i.e. the basic patent has expired and the SPC term has started): no waiver.
  • An SPC granted on an SPC application filed after the date of entry into force of the regulation: the waiver applies. [In practice, as the waiver only applies to the SPC when in force, it applies from entry into force of the SPC.]
  • An SPC granted on SPC application filed before the date of entry into force of the Regulation, but where the SPC is not in force on that date: the waiver applies from the date of entry into force of the Regulation plus three years [or, in practice, from entry into force of the SPC if later].

Footnotes

[1] https://ec.europa.eu/docsroom/documents/29462

[2] https://data.consilium.europa.eu/doc/document/ST-5411-2019-INIT/en/pdf?utm_source=POLITICO.EU&utm_campaign=585469fcb3-EMAIL_CAMPAIGN_2019_01_16_02_48&utm_medium=email&utm_term=0_10959edeb5-585469fcb3-190054245

[3] The number of the authorisation granted in accordance with Article 40(1) of Directive 2001/83/EC or Article 44(1) of Directive 2001/82/EC for the manufacture of the corresponding medicinal product or, in the absence of such authorisation, a valid certificate of good manufacturing practice as referred to in Article 111(5) of Directive 2001/83/EC or Article 80(5) of Directive 2001/82/EC covering the premises where the making is to take place.

 

11 February 2019

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