The proposal is meant to tackle problems the EU has faced in terms of the loss of exports because its supplementary protection certificate (SPC) system can restrict manufacturers from making product for non-EU-based countries. Background In 1992, the SPC system was first introduced to compensate for the loss of effective patent protection due to the time required to conduct research and clinical trials prior to obtaining marketing authorization. “By providing for a period of supplementary protection which, depending on the circumstances of a particular case, could be granted for a period ranging from one day to a maximum of five years, the Regulation therefore aimed to provide the pharmaceutical industry with sufficient incentives to innovate and to promote, within the Union, the investment in research and innovation needed to develop medicinal products and to prevent the relocation of pharmaceutical research outside the Union,” the proposal says. But one of the issues is that during the SPC period of protection, EU-based manufacturers of generics and biosimilars cannot manufacture for export outside the EU to countries where SPC protection has expired or does not exist. “Unless action is taken now, Europe risks missing the opportunities offered by this upcoming ‘patent cliff,’” the proposal says. Main Features The EC notes two points worth highlighting: First, this proposal leaves SPC protection fully intact, but would enable EU-based manufacturers of generics and biosimilars to compete on an equal footing with manufacturers based in non-EU countries. And second, the commission says the proposal is accompanied “by a series of safeguards to ensure transparency and avoid the possible diversion onto the Union market of generics and biosimilars in respect of which the original product is protected by an SPC. Businesses intending to start manufacturing for export purposes will be under an obligation to notify the competent authorities, and the information contained in that notification will be made public. They will also have to comply with due diligence requirements, chiefly to prevent goods manufactured for export from being diverted onto the Union market.” This idea of trying to restore a level playing field between EU-based manufacturers and those in non-EU countries will enable manufacturers that have set up a line for export purposes to also, after SPC expiration, use the same line to manufacture generics or biosimilars to support the EU market. In terms of stakeholders commenting on the proposal, the EC found that generic and biosimilar manufacturers were largely in favor of the waiver while those holding SPCs were mostly opposed. EFPIA, a pharmaceutical trade group, said it is “deeply concerned with the European Commission’s proposal to open the SPC legislation with a view to introducing a manufacturing waiver.” The proposal was announced in the Commissions 2015 Single Market Strategy, and follows various studies, a consultation and a European Parliament resolution endorsing the need to introduce an SPC manufacturing waiver before 2019. More Information On RAPS