The European Commission’s “Export Manufacturing Waiver”
What can innovators do to prepare themselves?

The European Commission’s (EC) draft proposal for an “export manufacturing waiver” relating to SPCs for medicinal products has generated a lot of comment recently, as it would reduce innovators’ rights and has implications for SPC portfolio management, if adopted in its current form. The waiver is essentially a change to the infringement provisions in the SPC Regulation. It would allow manufacturers of generics and biosimilars to manufacture medicines protected by an SPC for the exclusive purpose of exporting them to non-EU markets where patent protection does not exist.

Such a manufacturing waiver is politically attractive because the EC believes that European generics manufacturers currently suffer a disadvantage compared to their competitors outside the EU. This is because, unlike their non-EU competitors, EU manufacturers are not able to produce medicines protected by SPCs for export to countries outside the EU (e.g. in countries with no SPC provisions). The Commission reasons that its proposal will generate additional net annual export sales of well in excess of EUR 1 billion in the next 10 years and 20 000 to 25 000 new jobs (although these figures have been contested).

This proposal has, of course, been welcomed by the generics industry. However, for originators there is concern that the suggested export manufacturing waiver will dilute SPC protection and will be hard to control. For example, originators argue that it will be difficult to control whether manufacturing is indeed for export only or whether stock is being produced for launch in the EU once SPC protection expires.

If adopted as currently proposed, the export manufacturing waiver will apply to all SPCs stemming from SPC applications which are pending three months after publication of the amended Regulation, as well as all SPC applications filed after that date. This means that all SPCs granted before that date will not be subject to the export manufacturing waiver (based on the current draft proposal). Given the likely drawbacks of the waiver, it seems preferable to have SPCs granted before the export manufacturing waiver comes into effect. At present, there is no certainty on when the waiver will be implemented and whether the transitional provisions will remain unchanged, but one option would be to seek to expedite SPC applications in the hope of achieving grant before the waiver comes into force.

SPC applications can be filed only once both the marketing authorisation (MA) and the base patent have been granted. In the cases where MA has already been given but the patent is not yet granted, the examination of the patent application could be accelerated. At the EPO, this is possible through requesting PACE without the need to provide any reasons. It may also be an option to file narrow claims focussed on the authorised product to help expedite grant. Broader subject-matter could then be pursued in a divisional application. However, many patent offices have a significant backlog of SPC applications (including the UK and Germany) and often choose to examine SPC applications based on when the underlying patent will lapse, so the options for expediting SPC examination for many cases may be limited.

Of course, there remains the chance that the proposed amendments to the SPC Regulation will not be approved by the EU member state governments in their current form. Therefore, we suggest applicants keep this situation under review, while seeking to file SPC applications soon rather than later where possible.

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