EU Supplementary Protection Certificate (SPC) manufacturing waiver put to the test in a Munich regional court (Janssen Biotech vs Formycon)

This post concerns a recent court case in which an EU Supplementary Protection Certificate manufacturing waiver was put to the test in a Munich court.

About Supplementary Protection Certificate (SPC) manufacturing waivers

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 applies throughout the entire SPC term while stockpiling will only be allowed during the last 6 months before SPC expiry.

You can read more about SPCs in this blog post.

Parties to the main proceedings

Janssen Biotech (claimant) vs Formycon (defendant)

Background to the case1

The dispute, between German pharma company Formycon and Janssen Biotech, concerns the German SPC DE 12 2009 000 025.7, which is based on basic patent EP 1 309 692 B1. 

The SPC, which protects drug Stelara, expires on 20 July 2024. Janssen Biotech, a Johnson & Johnson subsidiary, produces and distributes the drug. Its active ingredient, the monoclonal antibody ustekinumab, is used to treat psoriasis, psoriatic arthritis, ulcerative colitis and Crohn’s disease and is one of the global top-selling drugs.

Formycon has developed FYB202, a biosimilar of Stelara . Although the current SPC is still valid, the production of an imitation product is permitted, under certain conditions, within the EU even before patent protection expires. This is according to Regulation (EU) 2019/933  which since 2019 has supplemented the previous SPC Regulation EC No 469/2009.

Formycon intends to produce the biosimilar FYB202 in Germany in order to export it to third countries and to enter the EU market immediately following the SPC’s expiry. The company notified SPC holder Janssen Biotech, as required by the EU regulation. For the distribution of the biosimilar, Formycon signed a licensing deal with Fresenius Kabi in February 2023.

The ruling by the Munich Court1

The Regional Court Munich has handed down a preliminary injunction against Formycon, after the pharmaceutical company announced its intention to launch a biosimilar of drug Stelara following the expiry of its patent and related SPC.

Claimant Janssen Biotech argued that the defendant needed to produce a relevant marketing authorisation before it could begin distribution upon the patent’s expiry.

The judges reached the decision due to finding a lack of marketing authorisation number for the biosimilar in a third country outside the EU (case ID: 21 O 12020/23).

This is one of the first rulings in which a court has applied the 2019 amendment to the SPC regulation. In the future, this could play a major role when it comes to biosimilars entering markets in which the SPC has no effect.

Formycon’s argument and stance1

Formycon argued that, to start production for export, it is sufficient to communicate the marketing authorisation number for a third country as soon as it becomes available. The defendant claimed that authorisations, especially for biosimilars, and thus the allocation of a number, often take time.

Formycon also rejected the request to instead name the third country for which it is planning production. It claimed this would mean the disclosure of distribution channels, which are confidential. However, the Munich court was of the same opinion as the claimant. It issued a preliminary injunction, which now prohibits Formycon from producing FYB202 in Germany for export.

The reaction from Medicines for Europe2

Medicines for Europe and its members are strongly concerned by the judgement on the Supplementary Protection Certificate (SPC) manufacturing waiver issued by the Munich District Court, Germany in October 2023.

Medicines for Europe and its members strongly disagree with this interpretation of the Munich District Court, as neither requirement is supported by the letter of the law and are in conflict with the objectives of the SPC manufacturing waiver, as evidenced by the legislative history and its explanatory memorandum.

The judgment further suggests that for manufacturing in the EU and export to a third country to be permissible, a granted marketing authorisation in such third country is required, a position which is fundamentally wrong and is a complete misunderstanding of which activities require a marketing authorisation under pharmaceutical regulatory laws. Only placing a medicinal product on the market requires an MA, not the manufacture, making or import.

Although it is a first-instance judgment in an expedited procedure, issued in a single – but, for the pharmaceutical industry, significant – EU country, it will certainly be used by SPC holders to further threaten existing and future users of the SPC Manufacturing Waiver with lawsuits, or to sue them, a practice already reported by users of SPC Manufacturing Waiver in the Medicines for Europe 2023 Industry Report and which distorts the use of the waiver, frustrating its goals. The judgement even maintains that “the Regulation is not intended to put manufacturers within the Union on a completely equal footing with manufacturers in third countries”1, which clearly reflects a fundamental misunderstanding by the Court of the aims of the regulation

References
  1. Formycon and Janssen Biotech put EU SPC waiver to the test in Munich by Konstanze Richter, JUVE Patent, 26 October 2023
  2. Court decision on Supplementary Protection Certificate (SPC) manufacturing waiver risks undermining its use – Medicines for Europe Press Release , 18 January 2024