EP’s draft position on Unitary SPC and SPC Regulation revision

November 17, 2023

by Giuliana Miglierini

The Committee for Legal Affairs (JURI) of the European Parliament released the draft amendments to the Commission’s proposals aimed to establish a Unitary Supplementary Protection Certificate (SPC) (links to the document and to the procedure) and to revise the current SPC Regulation (links to the document and the procedure).

On the dedicated pages of EP’s website, you can also find the opinion issued by the Consultative Working Party, according to the Inter-institutional agreement of 28 November 2001 on a more structured use of the recasting technique for legal acts.

A document analysing the potential impact of the Unitary SPC on access to health technologies was also prepared by the Policy Department for Citizens’ Rights and Constitutional Affairs Directorate-General for Internal Policies in September 2023.

We summarise the main features of the EP’s draft positions, which were discussed in the 7 November meeting of the JURI Committee.

The revision of the current SPC Regulation

The JURI Committee (Rapporteur Tiemo Wölken) moved to Recital 2 the statement that “medicinal products, in particular those that are the result of long, costly research will not continue to be developed in the Union unless they are covered by favourable rules that provide for sufficient protection to encourage such research”. Recitals 3 and 5 of the original proposal have been deleted, the last one referring to the risk research centres located within the EU might move to countries offering greater protection. The new Recital 2 makes now reference to the difficulty of establishing a direct link between favourable protection rules and EU competitiveness. If, on the one hand, it would be true that the attractiveness of EU markets might benefit from favourable protection, on the other it should be taken into account that European incentives can be granted also to authorised medicines from third countries. Furthermore, UE-based innovative companies can equally benefit from incentives in third countries.

Recital 13, referring to the request of a marketing authorisation for a biological medicinal pro-duct identified by its International Nonproprietary Name (INN), has been amended to indicate that the protection conferred by the SPC should extend to all biosimilars (and not to therapeutically equivalent products, as previously indicated).

A reference to Article [86] of the new Directive (EU) …/… [2023/0132(COD)] to be approved has been introduced in Recital 24, concerning fees that can be charged by the European Union Intellectual Property Office (EUIPO) with reference to centralised application for SPCs for paediatric medicinal products.

The newly inserted Recital 41 a highlights the importance of the timely entry of generics and biosimilars in the EU market, as it may support competition, reduction of prices, sustainability of national healthcare systems and access to affordable medicines.

Several amendments have been proposed for Recital 45. Among the main ones is the reference to the opportunity “to restrict the protection conferred by a supplementary protection certificate in accordance with Regulation (EU) 2019/933 so as to allow making for the exclusive purpose of export to third countries and any related acts in the Union strictly necessary for making or for the actual export itself […]”. The JURI Committee referred to “related acts” as those that “could include the possession, supply, offering to supply, import, using or synthesis of an active ingredient for the purpose of making a medicinal product containing that product, or temporary storage of the product or advertising for the exclusive purpose of export to third-country destinations”.

A phrase was added to Recital 60 on the centralised SPC register to deny the possibility to use the hereby contained information to support patent linkage, regulatory or administrative decisions related to generic or biosimilars, pricing and reimbursement decisions or tender bids. Article 35 – paragraph 11 a further emphasises this concept with reference to public authorities, that should not use such information for refusal, suspension, delay, withdrawal or revocation of marketing authorisations.

The JURI Committee also modified the definition of medicinal product contained in Article 2 – paragraph 1 – point 1 of the proposed Regulation, making reference to “‘any substance or com-bination of substances that fulfils at least one of the following conditions”. These include properties for treating or preventing disease in humans, the possibility to restore, correct or modify physiological functions by exerting a pharmacological, immunological or metabolic action, or to making a medical diagnosis.

The new Article 2 – paragraph 1 – point 12 a defines the meaning of the wording ‘economically linked’ with reference to “different holders of two or more basic patents protecting the same product, that one holder, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with another holder”.

The JURI Committee also introduced the new Article 8 – paragraph 1 – point d b, stating the need to provide information on any direct public financial support received for research related to the development of the product.

The new Article 26 – paragraph 4 – point c a mentions the inclusion of any evidence in the notice of opposition in support of the opposition itself. According to the amended Article 26 – paragraph 6, the opposition panel should communicate its decision together with the reasoning for it. The same applies to the EUIPO (Article 26 – paragraph 9). The Office should also issue a single decision with reference to several oppositions filed against an examination opinion (Article 26 – paragraph 9 a). Undue delays are repeatedly discouraged.

Article 28 – paragraph 3 – point a was amended to indicate that examiners of patents and SPCs should possess relevant expertise and sufficient experience in the assigned tasks. Article 45 – paragraph 3 adds experts shall be verified for the absence of any conflict of interest.

Amendments of the Unitary SPC proposal

Many of the amendments made by the JURI Committee to the Unitary SPC proposal correspond to the ones seen above for the SPC recast. Among the distinctive ones is the new Recital 14 a, focusing on the “digital by default” principle and consequent electronic applications for unitary and combined applications for supplementary protection certificates. Article 8 – paragraph 4 a adds that the electronic application for a unitary SPC should use the formats made available by EUIPO. Other articles regulate the entire procedure to occur by exchange of electronic documentation.

Amended Recital 22 now makes explicit reference to the possibility to produce and store in the EU “in view of entering the market of any Member State upon expiry of the corresponding certificate (‘EU Day-one entry’) and any acts related thereto”.

The new Article 22 – paragraph 1 – point c b defines cases where the applicant shall waive the SPC rights for markets where the medicinal product has not been launched, i.e., the medicinal product is not placed on all Member States or a Member State market covered by the unitary certificate or combined centralised SPCs.

Comments from Medicines for Europe

The first drafts of the EP position on the SPC and SPC Regulation recast are a step in the right direction for access to medicines across Europe, according to Medicines for Europe. The association particularly appreciated the identification of the necessary safeguards for scrutiny of the SPC application before granting, to prevent invalid (non-innovative) SPCs from delaying access to generic and biosimilar medicines. The undue use of SPC expiry dates in the register to implement unlawful and anti-competitive patent linkage strategies were also deemed positive.

The EU Commission proposal of the new pharmaceutical legislation

May 5, 2023

AESGP, antimicrobial medicines, approval time, CHMP, comparative clinical trials, Council Recommendation, daptive clinical trials, data protection, Directive, earlier warnings, early scientific advice, EFPIA; Medicines for Europe, electronic product information, EMA Committees, environmental risk assessment, EUCOPE, EuropaBio, European Commission, European Council, European Parliament, exclusivity protection, generic and biosimilar medicines, health data, innovative medicines, list of critical medicines, market protection, marketing authorisation renewal, medical needs, medicines shortages, new indications, paediatric medicines, patient representatives, patient-centricity, PRAC, prevention plans, price negotiations, rare diseases, real world evidence, regulation, regulatory flexibility, regulatory procedures, regulatory protection, regulatory sandboxes, repurposing, revision of the European pharmaceutical legislation, rolling review, single European market for medicines, temporary emergency marketing authorisations, Transferable data exclusivity voucher, transparency on public funding for R&D, unmet medical needs

By Giuliana Miglierini

After a five-months delay, the European Commission has announced on 26 April 2023 its proposal for the revision of the European pharmaceutical legislation. The package is comprehensive of a Directive governing authorisations and other regulatory procedures, and a Regulation focused on central authorisation procedures. A Council Recommendation on antimicrobial resistance is also included. The entire reform package shall now undergo the scrutiny of both the European Parliament and Council in order to gain final approval and adoption.

In this first article, we will resume the main features of this highly complex reform, leaving to following posts a more detailed discussion of the single lines of intervention.

The experienced delays acknowledge of the many difficulties encountered by the Commission in reaching a balance between forces representing different perspectives within the pharmaceutical sector. Among the main areas of debate was the exclusivity protection: an issue not yet re-solved, judging from the first reactions from industrial associations, and that should be addressed during the incoming negotiations at the EU Parliament and Council.

A single market for medicines

Central to the entire reform package is the creation of a single European market for medicines, aimed to facilitate the fair and rapid access to patients of all member states. Regulatory procedures for approval of generic and biosimilar medicines should be simplified. Patients are also expected to benefit from more innovative medicines, thanks to a wide array of incentives, and from the repurposing of products already on the market.

Patient centricity should also address rare diseases and new therapeutic options for paediatric patients, including the creation of a EU network of representatives of patients associations, academics, developers and investigators. Patient representatives should be appointed to the EMA Committees, and thus involved in the approval of new medicines. A more extensive use of electronic Product Information is expected to facilitate access to updated information, while reducing costs for manufacturers.

A greater transparency on public funding for R&D should better support price negotiations with national authorities, so to make medicines more affordable to patients.

The long lasting issue of medicines shortages should be tackled from different perspectives. Pharmaceutical companies should be responsible for the emission of earlier warnings on shortages and withdrawals, and for the establishment of prevention plans. European authorities should create a list of critical medicines, to be used to identify supply chain vulnerabilities and improve security of supply. National and central competent authorities are called to a better monitoring of shortages, while EMA should play a stronger guiding role on security of supply.

The One Health approach should inspire actions to improve the environmental sustainability of medicines. From this perspective, the proposed reform includes a strengthened environmental risk assessment for all medicines, including those already on the market. Actions to improve environmentally friendly production technologies and to reduce the release of drugs into the environment are also considered.

Actions supporting innovation

The reform package completely redesigns the duration of regulatory protection, reducing the standard length to 8 years (6 years of data protection + 2 years of market protection), but offering a wide range of incentives to reach a cumulative maximum of up to 12 years of protection. The true novelty is the 2-year incentive for companies launching a new product in all EU markets at the same time. Other incentives are targeted to unmet medical needs (6 months), comparative clinical trials (6 months), and for a new indication to treat another disease (1 year).

The standard market exclusivity should reach 9 years for medicines for rare diseases. In this case too, a wide range of incentives may extend protection to up to 13 years.

The Transferable data exclusivity voucher is the tool identified to support the development of new antimicrobial medicines: the voucher would be transferred to another of the company’s products, extending its protection by 1 year. The Commission plans to issue no more than 10 vouchers over a 15 year period, under strict conditions, so to limit the impact of the measure on healthcare systems. Reshoring of pharmaceutical productions and EU’s strategic autonomy are not included in the reform. A number of other actions are ongoing to support specific lines of intervention, i.e. the EU FAB flexible manufacturing network of vaccines producers, HERA’s Joint Industrial Cooperation Forum on vulnerabilities along the supply chain, and the Important Project of Common European Interest on Health to allocate state aid to support for innovative EU projects.

A more flexible regulatory framework

A higher regulatory flexibility should support fast approval of medicines. Regulatory assessment for centralised procedures should shorten to 180 days (from the current 210); the time should be reduced further to 150 days for products needed for health emergencies.

Simplification of procedures will include full electronic submission of applications. Rolling re-views and temporary emergency marketing authorisations at the EU level for public health emergencies will fully enter the set of available procedures. Simplification should also include the abolishing of the marketing authorisation renewal in most cases.

A reform of EMA’s Committees is also envisaged: only the Committee for Human medicinal pro-ducts (CHMP) and the Safety Committee (PRAC) should continue to exist, while the orphan, paediatric and ATMP committees would be abolished.

Generic and biosimilar medicines shall also benefit from simpler rules for approval, while regulatory sandboxes are the tool to support testing of particularly new and innovative therapies. These may also benefit of additional early scientific advice and regulatory support by EMA, particularly for unmet needs. Dedicated pathways are also planned to support repurposing, especially for SMEs and not-for-profit organisations.

Clinical development may be improved thanks to a wider use of adaptive clinical trials, real world evidence and health data. The reform is also expected to make easier the interaction with other relevant healthcare frameworks, e.g. for medical devices and health technology assessment.

The first comments from interested parties

A very negative opinion on the proposed reform has been issued by the European Federation of Pharmaceutical Industrial Associations (EFPIA), representing the innovator industry.

“Unfortunately, today’s proposal manages to undermine research and development in Europe while failing to address access to medicines for patients”, said EFPIA’s Director General Nathalie Moll. The main point of criticism is the 2-year incentive for the contemporary launch of a new medicine in all 27 member states, that for EFPIA would represent an impossible target for companies. According to President Hubertus von Baumbach, “the ‘net’ impact of policies set out across these proposals, in their current form, puts European competitiveness at risk: overall, it weakens the attractiveness for investment in innovation and hampers European science, research and development”. A comprehensive competitiveness checks on the impact of the revised pharmaceutical legislation is EFPIA’s request.

The Association also published a series of reports supporting its vision on the availability of new medicines throughout Europe, as its first action to stimulate the debate in view of the assessment of the proposal by the EU Council and Parliament.

“We strongly support the proposal’s intention to stop the well documented patent games manship and evergreening and the adaptation of incentives to necessary equity of access across the EU. Moreover, there should not be an accumulation of regulatory incentives that would extend the regulatory data protection period beyond the existing system (8 years) which is already the longest in the world. Regarding AMR, the Commission proposal for a reserve fund is the correct alternative to transferable vouchers and most efficient policy to protect against future risks”, wrote in a note Medicines for Europe, representing the generic, biosimilar and value added medicines industry. “The central role of the off-patent medicines industry for the patient is clearly reflected in the intentions of the draft legislation. We are still lacking an industrial strategy to strengthen the European off- patent sector and improve open strategic autonomy in health”, said Medicines for Europe President Elisabeth Stampa.

EuropaBio, on behalf of the biotech sector, welcomed the provisions improving the EU’s regulatory framework and promoting novel technologies. In this case too, the main concern is the proposed new set of incentives, that according to EuropaBio may undermine the predictability and stability of the European landscape for innovation. “It is essential that EU policies meaningfully improve patient access to medicines across the EU without undermining the EU’s attractiveness for life science investments”, said EuropaBio Healthcare Public Affairs Director Vlad Olteanu.

“AESGP supports the revision of the EU pharmaceutical legislation in principle. While we welcome the regulatory simplifications introduced by the revision, we are voicing some concerns on behalf of non-prescription medicines manufacturers that may have unintended negative consequences”, said Jurate Svarcaite, AESGP Director General. The Association resumed its worries in a statement published in its site.

These include the proposed two new prescription criteria for antimicrobial products and medicines containing an active substance which may have an environmental impact. As for incentives, according to AESGP a longer data exclusivity period (3 years instead of 1) should be considered in cases where new, pivotal evidence is generated, for switching from prescription to non-prescription status. Other points of concern refer to how environmental risks for medicines are to be assessed. “Decisions to minimise the environmental impact should always lead to proportional risk mitigation measures and never interfere with clinical priorities and benefit/ risk assessments that ensure EU citizens get access to the healthcare products they need”, wrote AESGP.

Improvement to the Commission’s proposal would also be needed with regard to the adoption of electronic Product Information, where a phased and harmonised approach to digitalisation is suggested. A better definition of real-world evidence/data would also be needed. As for shortages, mitigation measures should be proportionate and aimed at the critical medicines that do not have alternatives and have concentrated supply chains. AESGP supports the extension of the proposed approach to Risk Management Plans exemption also to medicinal products of well-established use, as for generics and biosimilars.

“We appreciate the proposals aimed at streamlining and digitalising regulatory procedures, yet we are concerned that other provisions will undermine R&D, innovation, and EU competitiveness. These will be especially detrimental to the small and mid-sized innovative companies that Eucope represents. The proposal introduces more risk and unpredictability into the system while reducing incentives for innovation and investment, which will negatively impact patient access”, wrote the association in its comments to the proposal of reform.

“The Commission’s revision includes troubling proposals, such as the introduction of (High) Unmet Medical Need, which risk reducing the EU’s global competitiveness in life sciences, thereby limiting the development and availability of innovative therapies”, said Eucope Secretary General Alexander Natz.

New steps towards the activation of the Unified Patent Court

December 2, 2022

authentication, Case Management System, central revocation, certificates, CMS, CMS testing period, Court of Appeal, Court of First Instance, data exchange, divisional applications, electronic signature, EPO, EPO’s official languages, European patent, European Patent Office, Florence Butin, infringement, Klaus Grabinski, login, market protection, official languages, opportunities, opt-out period, patent litigation, Patent Mediation and Arbitration Centre, pharmaceutical sector, renewal fees, revocation, risks, SPC, strong authentication, Sunrise period, Supplementary Protection Certificates, Unified Patent Court, Unified Patent Court Agreement, unitary patent, UPC, UPC-EPO agreement, UPC’s judges, UPC’s Registry, UPCA, Zack Mummery

by Giuliana Miglierini

The date of 1 April 2023 may mark an important step in the procedures to defend or challenge intellectual property rights. According to the current roadmap, since that date the Unified Patent Court Agreement (UPCA) will entry into force and the Unified Patent Court (UPC) will officially be able to receive the first cases.

Seventeen EU member states ratified up to now the UPC Agreement; for other seven, ratification is still pending. The new specialised body will decide on patent litigations (both infringement and revocation), with respect to both unitary patents and European patents validated in the adhering countries.

The organisation of the UPC

The Unified Patent Court is comprehensive of a Court of First Instance and a Court of Appeal. The Court of First Instance has its central division located in Paris and a section in Munich, plus local or regional divisions in adhering member states.

The Court of Appeal will be based in Luxembourg and will be responsible for decisions on appeals against decisions of the Court of First Instance. Its president is the legal representative of the UPC.

The UPC will also include a Patent Mediation and Arbitration Centre and a Registry located at the Court of Appeal (with sub-registries at every division of the Court of First Instance). The Registry shall be responsible for the organisation of all administrative and procedural tasks for the Court.

Preparatory activities to the activation of the Unified Patent Court included in 2022 the selection of judges. A total of 85 judges have been appointed, of which 34 are legally qualified judges and 51 technically qualified judges. They all have to assume their duties by the date of the entry into force of the UPC Agreement. Mr Klaus Grabinski (DE) has been designated as President of the Court of Appeal, Ms Florence Butin (FR) will be the President of the Court of First Instance. The Presidium of the UPC is also comprehensive of other two judges from the Court of Appeal and three judges from the Court of First Instance. The full list of the appointed judges is available at the UPC website.

Proceedings at the Court of First Instance will be held in the official language of the member state hosting the local or regional division. Member states can also designate one or more of the three official languages used by the European Patent Office (English, French or German) as the language of proceedings of their local/regional division. Proceedings discussed before the central division, or where the parties so agree, may refer to the language in which the patent was granted (English, French or German). Proceedings before the Court of Appeal shall usually refer to the same language used before the Court of First Instance.

Activation of the CMS Sunrise functionalities

According to the current roadmap, the expected date for the start of Sunrise period is 1 January 2023. From this date, the Case Management System (CMS) functionalities of the UPC should be activated.

Access to the CMS will require strong authentication; the Court published a document to clarify requirements for the two certificates needed to access the CMS system. Both of them can be obtained by a Qualified Trust Service Provider, according to the eIDAS regulation (regulation EU 910/2014 on digital identity).

The first certificate must be compulsory used for authentication to the system and login; the second one can be used to electronically sign the documents before uploading them into the CMS. The authentication certificate must be stored in a physical device (smart card or USB stick); this requirement is optional for signature certificates.

In view of the activation of the CMS Sunrise period, the UPC has planned a testing period for external users from 28 November until 16 December 2022. The available CMS test environment is a copy of the CMS production environment. Testing will allow to validate the CMS with respect to real world environment and to confirm the functionality of all system components and their compliance with legal and business requirements.

As for the interoperability of data, the Unified Patent Court has signed an agreement with the European Patent Office to provide the legal basis for the exchange of data between the EPO’s European Patent Register and the UPC’s Register. The entry into force of this agreement will coincide with that of the UPC Agreement.

The impact for the pharmaceutical sector

The entry into force of the new unitary patent system (i.e. the unitary patent and the Unified Patent Court) may have a significant impact on the pharmaceutical sector, where patent litigation are a quite common event along the lifecycle of a medicinal product.

The opportunities and risks offered to pharmaceutical companies by the new system have been discussed in an article by Zack Mummery published in the blog of UK’s law firm Reddie & Grose.

The possibility to have just one intellectual property right valid in seventeen different countries is one of the main advantages, as it avoids the need to validate European patents at the national level. Costs shall thus decrease both with respect to validation and renewal fees. On the other hand, the choice of a unitary patent obliges the company to pay renewal fees for the entire life of the patent, or to dismiss it entirely. It would be no longer possible to select the territories of interest where to maintain the patent active, as it currently occurs for the European patent.

A grey area of uncertainty highlighted by Zack Mummery is the possibility for supplementary protection certificates (SPC) to be based on a unitary patent. SPCs are currently governed by laws at the national level, but the EU Commission is discussing the possibility to activate a single SPC right valid across Europe.

Should a litigation occur for patent infringement, for example, a positive outcome for the originator company before the UPC would reinforce protection in many European countries. On the contrary, should the judgement be in favour of the other party, the originator may lose in a while protection over a great part of the European market. Another risk mentioned in the article is the possibility of a central revocation of the patent.

Major pharmaceutical companies may prefer to continue defending their intellectual property right through many different actions at the national level. Despite the higher costs, this approach is considered more flexible and it may lead to different outcomes in different countries, thus ensuring better protection of the interested markets.

According to Mr. Mummery, this sort of consideration should be kept in mind for important patent rights, for which the costs of validating a European patent individually in EU member states “will present a lower risk than validating as a unitary patent”. Exactly the contrary may apply to smaller pharmaceutical companies and start-ups, for which the lower costs of a unitary patent may result in more appealing.

The UPC can also decide on European patents validated in adhering member states, leading to the same risks for the protected markets seen above. During the transition period of seven years, the opt-out option will allow to choose among the UPC or national courts to judge on infringement and revocation of existing and new European patents. Furthermore, the Sunrise period allows interested companies to opt-out for up to three months before the activation of the new system. “However, given the potential value of some patents in this sector, the uncertainty of how judges will decide matters of infringement and validity, and the added flexibility of being able to launch separate actions in different European countries, opting patents and applications out of the UPC will be very attractive for many organisations”, writes Zack Mummery. Attention should be paid also to divisional applications during the transition period, as it may lead to the contemporary presence of both European and unitary patents rights.

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