Internal Market, Industry, Entrepreneurship and SMEs
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Pharmaceuticals: EU refines intellectual property rules

Today, the European Parliament voted in favour of a new regulation on supplementary protection certificates (SPCs). The targeted revision of patent-related rules on pharmaceuticals was proposed by the Commission to help EU-based pharmaceutical companies tap into fast-growing global markets and will foster jobs, growth and investments.

The regulation will entitle EU-based companies to manufacture a generic or biosimilar version of an SPC-protected medicine during the term of the certificate, if done either for the purpose of exporting to a non-EU market where protection has expired or never existed, or for stockpiling during the final 6 months of an SPC ahead of entry into the EU market. It will thus remove a major competitive disadvantage of EU manufacturers compared to manufacturers based in non-EU countries and ensure a better deal for patients.

The revision is a well-calibrated adjustment to the current regime striking a balance between ensuring the attractiveness of Europe for innovative pharmaceutical companies and allowing EU-based generics and biosimilar to compete on the global market. This manufacturing waiver will help create growth and high-skilled jobs in the EU and could generate more than €1 billion net additional sales per year and up to 25,000 new jobs over 10 years, particularly benefitting SMEs. More competition will improve patients' access to a wider choice of medicines and alleviate public budgets.

Next steps

Today's vote amends EU Regulation 469/2009 on the supplementary protection certificate for medicinal products. The text now needs to be formally endorsed by the Council of the European Union. Once published on the Official Journal of the EU, the regulation will enter into force in 20 days. It will be directly applicable in all EU countries. The full effects of the SPC waiver will be felt from 3 years after the date of that entry into force.

Background

EU and global pharmaceutical markets are undergoing profound changes. Global demand for medicines has increased massively, reaching over €1 trillion in 2017. Alongside this, there is a shift towards an ever-greater market share for generics and biosimilars. Traditionally the EU has played a pioneering role in pharmaceutical research and development, including generic medicines and biosimilars. But this leadership position is under threat.

Supplementary protection certificates (SPCs) are an intellectual property right first introduced in the EU in 1992 as an extension to a patent right. Pharmaceutical SPCs aim to offset the loss of effective patent protection for medicines that occurs due to the compulsory lengthy testing and clinical trials these products require prior to obtaining regulatory marketing approval. An SPC can extend a patent right for a maximum of 5 years, with a further 6-month extension being granted if the medicine is accompanied by a paediatric investigation plan.

Many SPC protections will start to lapse from 2020, as a significant number of medicinal products will enter the public domain. This development will generate significant new market opportunities for generics and biosimilars. There is an urgent need to adjust the existing regulation to this situation, as the markets for generics and biosimilars are highly competitive and steadily growing and investment decisions of the production are made well in advance. 

The revision of the SPC regimes was announced in the Commission's 2015 single market strategy and follows various studies, an extensive consultation and a European Parliament resolution endorsing the need to introduce before 2019 an SPC manufacturing waiver. 

More Information

FAQs on the proposal