Patents, Supplementary Protection Certificates (SPCs) and SPC manufacturing waivers

This post is an attempt to provide basic information about patents, Supplementary Protections Certificates (SPCs) and Supplementary Protection Certificate (SPC) manufacturing waivers. The information provided is by no means exhaustive.

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)

What is a Supplementary Protection Certificate?

An SPC is a sui generis 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.

A six-month additional extension is available in accordance with Regulation (EC) No 1901/2006 if the SPC relates to a medicinal product for children for which data has been submitted according to a Paediatric Investigation Plan (PIP).1

How are Supplementary Protection Certificates (SPCs) regulated?

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protection for medicinal products was first introduced in the EU in 1992 through Council Regulation (EEC) No 1768/92 (no longer in force) and is currently governed by Regulation (EC) No 469/2009 of the European Parliament and of the Council (codified version)2.

By providing for a period of supplementary protection, Regulation (EC) No 469/2009 seeks to promote, within the Union, the research and innovation that is necessary to develop medicinal products, and to contribute to preventing the relocation of pharmaceutical research outside the Union to countries that might offer greater protection (as stated in Regulation (EC) No 469/2009).

Reform of the SPC sysyem

A reform of the SPC system is in progress. The proposed SPC reform includes the creation of a unitary SPC. You can read more about it is this blog post.

What is the function of Supplementary Protection Certificates (SPCs)?

SPCs aim to offset the loss of patent protection for pharmaceutical products that occurs due to the compulsory lengthy testing and clinical trials that these products require prior to obtaining regulatory marketing approval.1

When do Supplementary Protection Certificates (SPCs) take effect?

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.2

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.

When can an innovator/patent holder apply for a Supplementary Protection Certificate?

An innovator (patent holder) can apply for an SPC on a product’s “basic” patent within 6 months of obtaining marketing authorisation in any EU member state.

Can the duration of a Supplementary Protection Certificate be extended?

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 information

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.2

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.6

The main problems were:

  1. During the SPC term, manufacturers in the Union could not manufacture generics or biosimilars with a view to exporting them to third countries where protection had expired or never existed.
  2. Immediately upon SPC expiry, manufacturers were not ready to place generics or biosimilars on the EU market.6

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).6

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.6

About SPC manufacturing waivers

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

With the entry into force across all Member States of Regulation (EU) 2019/933 on 1 July 2019 amending Regulation (EC) No 469/2009, a so-called “SPC manufacturing waiver” was introduced.

Regulation (EU) 2019/933 introduces an exception to the protection conferred by an SPC for products, or medicinal products containing those products, manufactured for export purposes and/or stockpiling purposes.7

  1. Under the Regulation, generic and biosimilar makers are able to obtain a waiver to manufacture SPC-protected products for export to non-EU countries where intellectual property protections for those products have expired or never existed.7
  2. The regulation also allows for the stockpiling of generic and biosimilars during the final six months of SPC protection (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) to enable day-one market entry for those products.7 

By allowing 1 and 2 above, the aim of this Regulation (as stated in the Regulation) is to promote the competitiveness of the Union, thereby enhancing growth and job creation in the internal market and contributing to a wider supply of products under uniform conditions.

The new Regulation (EU) 2019/933 also requires the European Commission to carry out an evaluation of the manufacturing waiver provisions by 1 July 2024 at the latest, and then again every 5 years, in order to assess their impact and particularly to determine whether the 6-month period for stockpiling is sufficient to achieve the objective of day-1 launch of generics and biosimilars in the EU.4

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 when generic and biosimilar manufacturers were able to start manufacturing medicines in Europe for export, stockpiling, and day 1 launch in Europe.5

Under the applicable transitional regime, the manufacturing waiver will not affect SPCs that were already in effect on 1 July 2019. For SPCs that were filed before this date but came into effect only afterwards, the manufacturing waiver became applicable only after 3 years, i.e. from 2 July 2022 onwards.4

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.

Further reading
  1. Supplementary protection certificates for pharmaceutical products( European Medicines Agency)
  2. What happens to the manufacturing waiver in the UK following Brexit? (capmaels.com)
  3. Pharmaceuticals: Commission refines intellectual property rules (ec.europa.eu)
  4. Review of the SPC Manufacturing Waiver: a First Industry Report – Medicines for Europe, June 2023. The report facilitates an understanding of the nuances of the SPC manufacturing waiver by highlighing the difficulties experienced with it. Measures to overcome these difficulties are proposed. The report was updated in June 2024 (see 8 below).
  5. Formycon and Janssen Biotech put EU SPC waiver to the test in Munich by Konstanze Richter, JUVE Patent, 26 October 2023. Read more about the case in this blog post.
  6. Court decision on Supplementary Protection Certificate (SPC) manufacturing waiver risks undermining its use – Medicines for Europe Press Release , 18 January 2024
  7. Review of the SPC Manufacturing Waiver: a 2024 Industry Report
References:
  1. Economic Analysis of Supplementary Protection Certificates in Europe – Margaret Kyle January 30 2017,
  2. 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}
  3. SPC Manufacturing Waiver – J A Kemp, 3 May 2021
  4. SPC manufacturing waiver enters into force in July 2019 – Oswin Ridderbusch et al, 11 June 2019, Kluwer Patent Blog
  5. The Supplementary Protection Certificate (SPC) manufacturing waiver becomes operational!– 01 July 2022, Medicines for Europe.
  6. COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document, Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 469/2009 concerning the supplementary protection certificate for medicinal products 28 May 2018
  7. The SPC Manufacturing & Stockpiling Waiver – Intellectual Property Office of Ireland