European Council Advances SPC Waiver For Generics; Negotiations Coming

The European Union Council of member states has approved a mandate for negotiations with the EU Parliament concerning a draft regulation aimed at boosting EU-based generic and biosimilar manufacturing for export by providing an exception to the extended intellectual property protection granted by special protection certificates (SPCs). The mandate brings the draft regulation a step closer to adoption, and it also suggests that Parliament’s recent amendments to the regulation are likely be key areas of debate in the negotiations, which are expected to begin in the coming weeks.

With the so-called SPC Manufacturing Waiver, “EU-based makers of generics and biosimilars will be entitled to manufacture a generic or biosimilar version of an SPC-protected medicine during the term of the SPC if done exclusively for the purpose of exporting to a non-EU market where protection has expired or never existed,” according to a European Council press release.

The purpose of this waiver, the release explains, will be to “remove the competitive disadvantages faced by EU-based manufacturers of generics and biosimilars vis-à-vis manufacturers established outside the EU in global markets.”

Today’s meeting of the Council resulted in a mandate for negotiations [pdf] with the European Parliament, which, pending agreement by Parliament, will bring the legislative process forward toward adopting the regulation. The next step in the process will be tripartite negotiations between the EU Council, Parliament and Commission to agree on the final version of the regulation, which would then enter into force. The process allows for multiple rounds of negotiations before an agreement may be reached.

“Once the European Parliament agrees on a negotiating mandate, the Romanian presidency [which took over on 1 January for six months] will start negotiations with the European Parliament with the aim of adopting the regulation at first reading,” according to the release.

The Council intends to begin these negotiations in the coming weeks, with the hope of reaching an agreement before the EU Parliament elections in May of this year, a Council press officer told Intellectual Property Watch.

The mandate for negotiations, however, only includes reference to the original Commission proposal on the SPC Manufacturing Waiver, which enables the manufacture of generics and biosimilars during SPC periods solely for the purposes of export, and does not include explicit provisions to stockpile these drugs for “day-1” distribution in the EU on the first day after SPC periods expire (IPW, IP & Health, 14 December 2018).

The mandate also includes a strict interpretation of the safeguard measures originally proposed by the Commission to prevent generics and biosimilars produced in the EU from reaching EU markets before the SPCs expire. These include stringent labeling and notification requirements for producers of generics and biosimilars, with penalties for noncompliance.

The lack of mention in the negotiating mandate of the amendments the EU Parliament proposed in late 2018 to the draft regulation, which include explicit provision to stockpile for day-1 distribution, as well as less stringent safeguard measures, indicates that there are clear differences between how the Parliament and Council are approaching the draft regulation.

These amendments are expected to be a key area of debate in the upcoming negotiations, the press officer said.

The European Federation of Pharmaceutical Industries and Associations (EFPIA) issued a statement applauding the fact that the Council has maintained “the original scope of the Commission’s proposal,” which it says “could go some way to prevent further erosion of Europe’s IP framework as a consequence of its implementation and must be maintained.”

 

Image Credits: European Council