The European Commission is poised to introduce an SPC manufacturing waiver as early as 2019.  The controversial proposal aims to 'boost the competitiveness of the generics and biosimilars sector, but without undermining the market exclusivity granted under the SPC regime in protected markets’. However, there are concerns about the impact of the proposed waiver. 

The proposal, which was published on 28 May 2018, is to introduce an SPC manufacturing waiver for export purposes.  This would allow the manufacture in the EU of a medicinal product protected by an SPC, under the proviso that the manufacture must be for the exclusive purpose of exporting the product to a non-EU market. Any 'necessary' acts related to manufacturing for export purposes will also be permitted; the proposal lists upstream acts such as supply of intermediary products and active ingredients, and downstream acts, which besides transport, packaging, sorting and actual export include 'storing'.

Several ‘anti-diversion’ safeguards are mentioned, including a requirement to notify such manufacturing to independent national public bodies (which will hold the relevant information in a publicly accessible register) along with labelling requirements and due diligence requirements on the manufacturer vis-à-vis persons in its supply chain. However, it is uncertain how effective such safeguards will be and how feasible it will be to police compliance with these requirements. 

Indeed, the proposal acknowledges that a 'manufacturer having set up a manufacturing line for export purposes will easily be able, after SPC expiry, to use the same line to manufacture generics or biosimilars with a view to swiftly supplying the EU market'.  Compliance with labelling requirements could therefore be crutial to distinguish between products manufactured and stored for export purposes and those intended for the EU market.  However, investigating and enforcing correct labelling could well be challenging, particularly in countries where discovery is very limited.

Questions are also being raised as to whether the legislation would be compatible with the TRIPS agreement.

The proposed Regulation will apply only to SPCs granted after its date of application, and thus will not apply to any SPCs that have already been granted before that date. In addition, a short transitional period is proposed in relation to pending SPCs. 

SPC applicants may therefore wish to consider trying to expedite the prosecution of their pending SPC applications in any EU member states. 

Meanwhile, the UK Intellectual Property Office is inviting comments on the proposal, particularly stakeholder views on the possible impact of the legislation for the UK, views on the draft legal text and comments on the Commission’s impact assessment. Comments should be submitted to patentspolicy@ipo.gov.uk as soon as possible and before the end of June 2018.