European SPC reform: waiver legislation coming into force on 01 July 2019

Following its approval by the European Parliament in April, the final legislation amending SPC Regulation EC/469/2009 – Regulation (EU) 2019/933 of 20 May 2019 – has now been published in the Official Journal of the EU and will enter into force on 01 July 2019.

In this article, we report on three key areas, which have persistently been the subject of contested debate during the progression of this legislation. Perhaps most controversial has been the late inclusion of a stock-piling exemption, and there has been a state of flux as to the proportion of SPCs which will be subject to the waiver and the notification and safeguarding requirements that will be applied. The contrasting views associated with this legislation have been prominent, both via the industry reaction and from the recent statements made by certain Member States (see our commentary on the latter here.)

SPCs subject to waiver

The scope of the legislation and proportion of SPCs impacted has gone through numerous iterations since the original proposal in May 2018.

The original proposal, based on grant date, was overhauled, principally to avoid any disharmony arising from parallel SPCs being granted on different dates amongst Member States (now recorded in Recital (27)). Despite dissatisfaction amongst the innovator pharma industry, the proportion of SPCs impacted has been considerably expanded, including to cover SPCs that take effect after the date of entry into force of the new legislation, whenever applied for (discussed below).

Two clear lines in the sand have persisted as to the adopted mechanism: first, all SPCs applied for after the new legislation would be included; and second, all SPCs already in effect before the new legislation would not be included. As for application to SPCs already applied for before the new legislation came into force, two different mechanisms emerged, both from reports by the legal affairs (JURI) committee amongst the flurry of activity from November 2018 and January 2019: one where there would be a transitional regime impacting all SPCs taking effect after the new legislation as of a particular date (whether such SPCs would be wholly or partially affected); the other where only SPCs taking effect after a certain date would be impacted (and therefore only wholly and not partially). The former mechanism won out and in the adopted text, per Recital (26) and new Article 5(10), states that the waivers will apply to 2 categories of SPCs:

  • (i) all SPCs applied for on or after 01 July 2019, and
  • (ii) all SPCs applied for before 01 July 2019 (including granted or which remain pending) and that come into effect on or after 01 July 2019, but only from 02 July 2022.

This wording reflects the original mechanism put forward by JURI in November 2018, which was accompanied by an illustrative diagram, which we have adapted and reproduced below.

The date in heading (ii) has gone through a number of iterations since being originally proposed as 01 July 2024 (provisionally 5 years after the legislation could come into force) and was advanced by JURI to July 2023, before the Council, adopting JURI’s mechanism in the Council Mandate, proposed a date of 01 July 2022. That date and a 3 year transitional period, ultimately won out.

In the activity at the end of 2018 and early 2019, some commentary had suggested that an earlier date of application might be adopted as a compromise between competing delegates in exchange for stockpiling not being introduced. For example, this may have been the basis of the date advancing the date to July 2022 in the Council Mandate published in January 2019, in which stockpiling was omitted. However, while the subsequent JURI Report attempted to advance the date further (to July 2021), it also introduced stockpiling, which has persisted in the adopted text.

The wording now adopted in relation to stockpiling – in new Article 5(2)(a) – is as follows (emphasis added):


The wording now adopted in relation to stockpiling – in new Article 5(2)(a) – is as follows (emphasis added):

  • (iii) the making, no earlier than six months before the expiry of the certificate, of a product, or a medicinal product containing that product, for the purpose of storing it in the Member State of making, in order to place that product, or a medicinal product containing that product, on the market of Member States after the expiry of the corresponding certificate, or

  • (iv) any related act that is strictly necessary for the making, in the Union, referred to in point (iii), or for the actual storing, provided that such related act is carried out no earlier than six months before the expiry of the certificate.

As occurred during the progression of this legislation, at the same time as introducing a stockpiling exemption, the amendment was moved from Article 4 to Article 5 of the SPC Regulation, so to impact the effects of an SPC as opposed to its scope. In such respects and considering an SPC effects by reference to the largely harmonised acts of patent infringement in Europe, these new provisions apply more clearly both to “making/manufacturing” and “storing/keeping”.

As for “any related act that is strictly necessary for the making”, it remains to be seen what other acts of infringement will be exempted. Recital (9) (slightly updated from the previous Compromise Text) refers to both the purposes of export and storing and contains a definition of “related acts”, giving a non-exhaustive list that related:

“… could include: possessing; offering to supply; supplying; importing; using or synthesising an active ingredient for the purpose of making a medicinal product; or temporary storing or advertising for the exclusive purpose of export to third-country destinations. That exception should also apply to related acts performed by third parties who are in a contractual relationship with the maker”.

“… such acts could include the possession, supply, offering to supply, import, using or synthesis of an active ingredient for the purpose of making a medicinal product containing that product, or temporary storage of the product or advertising for the exclusive purpose of export to third country destinations. The exception should also apply to related acts performed by third parties who are in a contractual relationship with the maker.”

Recital (11) (and new Article 5(3)) performs a similar role, but in the negative, stating the exception should not cover:

placing a product, or a medicinal product containing that product, which is made for the purpose of export to third countries or of storing with a view to EU day-one entry, on the market of a Member State where a certificate is in force, either directly or indirectly after export, nor should it cover re- importation of such a product, or medicinal product containing that product, into the market of a Member State in which a certificate is in force. Moreover, it should not cover any act or activity carried out for the purpose of import of products, or medicinal products containing those products, into the Union merely for the purposes of repackaging and re-exporting. In addition, the exception should not cover any storing of products, or medicinal products containing those products, for any purposes other than those set out in this Regulation.”

This emphasises that placing on the market is not permitted, and also clarifies that re-importation is prohibited (which is sought to be prevented by the safeguards in any event – discussed below), as is importing for repackaging and re-exporting.

Notification and safeguarding provisions

The notification requirements and safeguards were subject to compromise between the Council Mandate and JURI Final Report from January 2019. The following points summarise some of the main provisions:

  • The manufacturer is required to notify both the relevant authority and the SPC holder no later than 3 months before it commences manufacture (Article 5(2)(b)).
  • The notification should set out whether it concerns exporting and/or stockpiling (Article 5(5)(b)).
  • Concerning the notification requirements, there are several carve-outs:

    • permitting removal of information in the notice to SPC holder so to omit any confidential or commercially sensitive information (Recital (15));
    • there is no longer a requirement to set out any intended start date (meaning the SPC holder will only know that it is at least 3 months away);
    • the EU member state where the relevant activity will take place must be named (and while the name and address of the maker (now defined) must be provided, previous text requiring the address of the premises where the making is to take place has been removed) (Article 5(5)(a) and (c));
    • the national authority shall publish the information from Article 5(5), and the date of notification, which is broader than recommendations in the final JURI report that only the relevant SPC number be published (new Article 11(4)).
  • For exported goods, the notice should contain the marketing authorisation number under which marketing will take place in the third country (Article 5(5)(e)) – or if not, to be updated later (Article 5(2)(c), and see also Recital (14)).
  • Goods under the export waiver (but not the stockpiling waiver) must affix the “EU export logo” to outer packaging, and “where feasible”, the immediate packaging (Article 5(2)(d)). In addition to labelling, the maker of goods for export must ensure that unique identifiers according to the EU Falsified Medicines legislation are not applied to such products (Article 5(8) and see also Recital (24)).

Looking ahead

With the new law in force in only 20 days’ time in all Member States (including the UK based on the current status of Brexit), the exceptions provided by the waiver will soon be a reality and it will be interesting to see the first examples of companies seeking to rely on them and how quickly examples will arise.

Once in place, following any early examples (and potentially surrounding litigation), all eyes will be on the requirements for the European Commission to evaluate the new system; first by 01 July 2024, and then every 5 years thereafter. This is provided by Article 21a, which sets out the primary purpose being by reference to the meeting the objectives of the waiver for export. The provision goes on to state that “special account” shall also be taken to evaluate the effects of the waiver for storing/stockpiling, including reference to the prominent and topical issues of “access to medicines” and “public health expenditure”. Poignant reference is also made to the 6 month period for stockpiling and whether that is “sufficient to achieve the objectives referred to in Article 5, including public health”. So it will not be long until we can expect another hotly contested debate as to the provisions of this legislation and whether any further reform is needed.

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.