Supplementary Protection Certificate (SPC) manufacturing waiver becomes operational in the EU

Last updated: 9 July 2024

See updates at the end of the post.

On 1 July 2022, the transitional period for the application of the Supplementary Protection Certificate (SPC) manufacturing waiver ended. The SPC manufacturing waiver became operational from 2 July 2022 and generic and biosimilar manufacturers will be able to start manufacturing medicines in Europe for export, stockpiling, and day 1 launch in Europe.

The information provided below is an attempt to facilitate a better understanding understanding of the SPC manufacturing waiver.

About patents

In all countries that are members of the World Trade Organization, the patent term is a minimum of 20 years. This fixed term allows no nuanced distinction between important and trivial inventions¹.

Drug development is a lengthy process, often requiring many years of clinical trials. Usually, firms apply for patents early in this process: a delay risks either pre-emption by competitors or invalidation due to the existence of prior art. Thus, upon reaching the market, drugs have less than the 20 year term of protection remaining on the initial patent¹.

A single product can be protected by many patents, each covering a distinct method of manufacturing, use, etc. These patents may have very different application dates, so that patent coverage changes over time. As well, some may be easier to invent around than others, so that the strength of the protection varies. This situation results in legal uncertainty for both the patent owner as well as potential competitors. Even if little time on the initial patent remains by the time a product reaches the market, these secondary patents may provide many years of additional protection¹.

About Supplementary Protection Certificates (SPCs)

An SPC is an intellectual property right that can extend by up to five years the protection conferred by a patent (“the basic patent”), but only with respect to the medicinal product that is covered by the related marketing authorisation².

Supplementary protection certificates (SPCs):

aim to offset the loss of patent protection for pharmaceutical products that occurs due to the compulsory lengthy testing and clinical trials these products require prior to obtaining regulatory marketing approval.
are a means of extending the term of patent exclusivity for a new medicine for a fixed period from the date of the first marketing authorisation in a European Union Member State.
take effect immediately after the patent expires, and can last for up to five years, depending on the time needed for the testing and trials period.
An innovator (patent holder) can apply for an SPC on a product’s “basic” patent within 6 months of obtaining marketing authorisation in any member state.
An SPC takes effect at the end of the term of the basic patent, and is granted for a period equal to the period which elapsed between the date on which the application for a basic patent was filed and the date of the grant of the first authorisation to place the patented product on the market in the EU, reduced by five years, and with a maximum duration of five years. Some patented products may thus not be eligible for SPC protection at all, i.e. if the marketing authorisation was obtained in less than 5 years after the filing of the application for the basic patent; some may enjoy SPC protection having the full duration of 5 years; while others enjoy SPC protection of a shorter duration. The average duration of SPCs for medicinal products granted in the EU amounts to 3.5 years².
Following the request of the holder of an SPC for medicinal products, the duration of the SPC can be extended once by six months in the case where Article 36 of Regulation (EC) No 1901/2006 on medicinal products for paediatric use applies, namely that²:
- all the measures included in an agreed paediatric investigation plan (PIP) are complied with,
- the protected product is authorised in all Member States and
- relevant information on the results of studies is included in product

Since an SPC ‘confer[s] the same rights as conferred by the basic patent’ (Articles 5 of the SPC Regulations), the exclusivity resulting from the basic patent is extended and enables its holder to prevent competitors from practicing the invention (e.g. manufacturing, offering for sale or storing generic products) in those Member States in which an SPC has been granted.

EU regulatory framework for SPCs

SPC protection for medicinal products was first introduced in the EU in 1992 through Council Regulation (EEC) No 1768/92 (no longer in force) and is currently governed by Regulation (EC) No 469/2009 of the European Parliament and of the Council (codified version)².

Regulation (EU) 2019/933 of the European Parliament and of the Council of 20 May 2019 amending Regulation (EC) No 469/2009 came into force on 1 July 2019. It introduced the so called SPC manufacturing waiver (read more on the waiver below).

Unintended impact of the SPC system for EU-based manufacturers

While the benefits of an SPC for its holder are significant, the SPC system, as a result of significant changes in pharmaceutical markets was having unintended side effects on the competitiveness of EU-based manufacturers of generics and/or biosimilars .

The main problems were:

During the SPC term, manufacturers could not manufacture generics or biosimilars with a view to exporting them to third countries where protection had expired.
Immediately upon SPC expiry, manufacturers were not ready to place generics or biosimilars on the EU market.

On account of 1 and 2 above, EU-based generics and biosimilar manufacturers thus risked foregoing significant export opportunities and crucial lead-time to enter the market in Member States at a time when significant new opportunities were opening up (cf. major patent cliff from 2020 onwards).

Unless action was taken, European manufacturers risked foregoing significant opportunities, and this would in turn have had a negative impact on jobs, on patients (increased import supply dependency, higher prices through limited competition) and on research for biosimilars.

Regulation (EU) 2019/933 (introducing the SPC manufacturing waiver)

With the entry into force of Regulation (EU) 2019/933 on 1 July 2019 amending Regulation (EC) No 469/2009, a so-called “SPC manufacturing waiver” was introduced. This meant that SPCs applied for in the EU member states on or after 1 July 2019 no longer confer protection against the manufacture of active ingredients and corresponding medicinal products for the purpose of export to third countries outside of the EU, nor against the manufacturing and stockpiling for day-1 entry to the EU market immediately after SPC expiry.

The export exemption will apply throughout the entire SPC term while stockpiling will only be allowed during the last 6 months before SPC expiry.

Under the applicable transitional regime, the manufacturing waiver will not affect SPCs that are already in effect on 1 July 2019. For SPCs that are filed before this date but come into effect only afterwards, the manufacturing waiver will become applicable only after 3 years, i.e. from 2 July 2022 onwards.

In summary:

For an SPC granted and in force prior to 1 July 2019, the SPC manufacturing waiver does not apply³.
For an SPC granted on an SPC application filed on or after 1 July 2019, the SPC manufacturing waiver applies³.
For an SPC granted on an SPC application filed prior to 1 July 2019, but where the SPC is not in force until on or after 1 July 2019, the SPC manufacturing waiver only applies to any term remaining, from 2 July 2022³.

Medicines for Europe report on the SPC manufacturing waiver

Medicines for Europe published its first report on the review of the SPC Manufacturing Waiver in June 2023. The report was updated and republished in June 2024.

The report puts forward recommendations in order to improve the SPC Manufacturing Waiver and proposes that they should be implemented following the 5-year review required by Regulation, due to take place in 2024.

Additionally, the report stresses the need to rapidly issue guideline(s)/Notice(s) to remove the existing uncertainties and limit the misuses of the unnecessary safeguards put in place by SPC holders.

References:

Economic Analysis of Supplementary Protection Certificates in Europe – Margaret Kyle January 30 2017,
COMMISSION STAFF WORKING DOCUMENT: EVALUATION of the Regulation (EC) No 469/2009 of the European Parliament and of the Council concerning the supplementary protection certificate for medicinal products, and Regulation (EC) No 1610/96 of the European Parliament and of the Council concerning the creation of a supplementary protection certificate for plant protection products. {SWD(2020) 293 final}
SPC Manufacturing Waiver – J A Kemp, 3 May 2021

Updates:

Date	Update
9 Jul 2024	1) Item no 8 added to section Further Reading. 2 In the section Further Reading, a note was added at the end of point no 6 to alert the reader to a blog post on the case between FOrmycon and Janssen Biotech. 3) New section Medicines for Europe report on the SPC manufacturing waiver added.
28 January 2024	Added reference Nos 6 and seven to the References section concerning a court case in which an EU SPC manufacturing waiver was put to the test.
26 November 2023	1) Items 4 and 5 added to section Further reading. 2) Administrative changes made to improve readability.
24 August 2022	Minor updates to improve readability

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