Update - SPC Manufacturing Waiver nears approval

​Following the flurry of EU legislative activity in January 2019, there have been significant developments in the progress of the proposed amendments to the SPC Regulation (EC/469/2009). In this update, we analyse the main developments in what now appears to be the form of legislation that is set to be passed in the coming months.

UPDATE: Since its original publication, this article has been shortened – please see here for our more recent article reporting and updating on the legislation, as approved by the European Parliament.

Following the flurry of EU legislative activity in January 2019 (see our last report here), there have been significant developments in the progress of the proposed amendments to the SPC Regulation (EC/469/2009). First the Parliamentary Legal Affairs committee (JURI) published its Final Report at the end of January. Then, a few weeks later, the Permanent Representatives Committee (comprising the European Council, Parliament and Commission) published an agreed “Compromise Text”. These revisions contained substantial changes compared to the EU Council’s Mandate (let alone the original May 2018 proposal), including most notably the introduction of a stockpiling waiver.

The key developments relate to the issues that have persistently been the subject of hot debate throughout the history of this proposed legislation:

  1. Stockpiling: JURI’s Final Report proposed the extension of the waiver to allow for stockpiling for supply on Day 1 after SPC expiry, as well as the originally proposed manufacture-for-export. This made it into the Compromise Text, albeit in a narrower form than the JURI Final Report.
  2. Application: JURI’s Final Report proposed a significantly earlier date for application to existing SPCs. Again, notwithstanding a slight reduction, this Compromise Text contains a mechanism that will catch a greater proportion of SPCs than originally proposed.
  3. Notices and safeguards: As well as being split options as between the requirements for export or stockpiling, the safeguards have been variably impacted both to enhance certain requirements while reducing or omitting others.

Industry reaction

The recent developments in agreeing the Compromise Text have been well received by generics and biosimilar manufacturers. For example, the text was “applauded” in a press release by Medicines for Europe, who thanked the EU for addressing many of its proposals. Despite that, the industry body also expressed “deep regret” about the Compromise Text’s “unnecessary and redundant notification requirements” which it argued would require manufacturers to publish commercially sensitive information (and despite the specific carve-out for confidential or commercially sensitive information contained in Recital 13a).

In contrast, EFPIA noted the “gamble” on Europe’s future medical innovation following the EU’s trilogue meeting, which would “risk impacting on European patients living with unmet medical needs” and “will significantly weaken Europe’s research and development offering”.

EuropaBio also described the recent proposal as a “red flag for investment in EU healthcare biotech”. Although it supports the overall objective of improving competitivity of the EU generics/biosimilar sector, it also “feels strongly that the agreement on the SPC Export Manufacturing Waiver is at odds with this goal”. Indeed, EuropaBio’s Secretary General, Joanna Dupont-Inglis, commented that “It is the small healthcare biotech companies, which are at the cutting edge of creating innovative technologies addressing patient’s unmet needs, that will be hardest hit”, as they often take the highest financial risks and rely heavily on investment.

Next steps?

The Compromise Text will now need to be approved by the European Parliament, with the Council already writing to confirm that this may take place in one reading according to Article 294 of the Treaty (see here). The legislative observatory for the amended SPC Regulation, which provides a useful summary of the key legislative framework and relevant parts of the EU machinery involved, forecasts that the first reading in the Parliament will take place on 16 April 2019, with a vote the following day.

This all means that the amended SPC Regulation is now likely to pass through the European Parliament ahead of the elections on 23 May 2019. It remains to be seen as to whether, by that date, the UK will be bound by the amended SPC Regulation either as a Member State or under any Withdrawal Agreement. If it is no longer a Member State and in a hard Brexit scenario, the UK will need to implement national legislation and make its own decision on whether to adhere to the same waiver provisions as adopted in Europe.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.