EU wants to make it easier for companies to export generic drugs

29 May 2018 | News

European Commission proposes a change to intellectual property rules to let generic drugmakers enter non-EU markets faster. Patent holders are not happy  

The Commission is proposing changes to intellectual property (IP) rules to make it legal for generic drug or biosimilar companies in Europe to manufacture and export products before their European patents expire, a move the originators say will weaken IP protection and threaten investment in research.

At issue are supplementary protection certificates (SPC) that allow drug manufacturers to extend the patent life of the active ingredients of pharmaceuticals for up to five years. The extension of the monopoly is intended to compensate for the time it takes to secure regulatory approvals for novel drugs. During this period, European manufacturers of generic and biosimilar drugs cannot produce their medicines in the EU.

Now, the Commission is proposing that manufacturers of generics and biosimilars should be able to produce drugs for export during SPC protection periods, enabling them to take advantage patent expiries in non-EU markets.

The changes, which must be approved by the EU’s 28 member states, would also mean companies could launch products more quickly in European markets once certificates expire.

The Commission argues that the right to manufacture and export versions of SPC-protected drugs will keep jobs in Europe, but pharmaceutical companies say that it will adversely affect incentives for research and development.

The European Federation of Pharmaceutical Industries (EFPIA) said it is “deeply concerned” with the manufacturing waiver.

“The Commission’s proposal reduces IP rights and thereby jeopardises patient access to innovative treatments. It also sends a global signal that Europe is weakening its commitment to IP, putting this investment, these jobs, this opportunity for economic growth and the advancement of patient care in Europe at serious risk,” EFPIA.

On the other hand, Medicines for Europe, which represents generic drug makers, praised the EU proposal, saying  it, “Will increase access to medicines for patients, lower drug costs for national health budgets and benefit a dynamic European industry.”

But it could have gone further. “We are concerned that the legislative proposal does not fully address the unintended effects of the SPC Regulation, specifically production for ‘day 1 launch’ in Europe after SPC expiry,” Medicines for Europe said. Generic and biosimilar manufacturers would not be allowed to stockpile drugs in advance of SPC expirations in home markets.

Defending the proposal, industry commissioner Elżbieta Bieńkowska said the EU remained committed to core IP rights.

“We are not undermining current intellectual property rules; it’s not about rewarding one side to the detriment of the other,” she said. “We are opening a little bit the doors for other companies.”

Bieńkowska said a similar waiver system is working well in Canada. “Here, the same tool really helped the industry grow,” she said. 

The certificates were first introduced in Europe in 1992 as a means of compensating drug originators for the lengthy clinical development and approvals process their products must go through to gain marketing authorisations.

The current situation means generics and biosimilar manufacturers cannot produce for any purpose while SPCs are in force  - not even for export to countries where patents have expired.  “[It] doesn’t make any sense,” said Commission vice-president Jyrki Katainen. “We could see manufacturers leaving to establish a factory in a third country, because they are not allowed to [operate] here,” he said.

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