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SPC waiver: drug companies and patent offices start preparations

With the EU SPC Manufacturing Waiver due to come into force next week, innovators, generics and patent offices say that they are looking at which products might be affected and whether to charge notification fees



 With the news that the EU Supplementary Protection Certificate Manufacturing Waiver comes into force on July 1, drug companies and patent offices say they have started to consider ways they might prepare for the new regulation, but note that they are not making significant plans yet.

Senior sources at Accord, Novartis, Insud Pharma, UCB and two other drug firms explain that the new regulation, which was published in the Official Journal of the EU on June 11, will not apply to SPCs already in effect. Neither will it affect SPCs filed before July 1 2019 until July 2022.

The timeframe means that the waiver will only apply to a small number of SPCs before 2022 and thus not significantly affect drug companies for about three years. Those companies note that they will probably not start planning for that time for another year.

“The waiver’s publication is not a massive game changer in terms of strategy development, and substantial talks on the matter will not start until next year,” says Elise Melon, assistant director of IP at UCB in Brussels.

Similarly, patent offices in Germany, the Netherlands and Portugal say they are not ramping up preparations but are considering what approach to take to the waiver.

But innovator and generics company sources say they have started to educate employees on the new law and identify those products that might soon be subject to the SPC Regulation exemption.

The patent offices, on the other hand, are in discussions about whether to charge a fee to generics for its use or, if they have already decided to so, how much to charge.


“At this stage, we are looking which are the products that could be subject to the exemption and considering the best way to deal with them,” says Toni Santamaria, head of IP in Europe at Accord Healthcare in Barcelona. “But it is a bit early to start preparations.”

He notes that innovators are not happy with the waiver and that he has already read some articles expressing concerns about its compliance with the WTO’s TRIPS regulations.

“Probably there will be some battles around this in the coming years.”

Tomos Shillingford, associate general counsel at Insud Pharma in the UK, adds that he is pleased that the regulation will come into force next week, but that the transitional arrangements mean that the benefits of the waiver will not be seen for some time.

He says that as of now there will be some planning taking place and that the company may start incorporating new timings into its licensing deals.

Speaking from the innovator side, the assistant general counsel at a global pharmaceutical firm says he will also be taking a look at products that might be hit by the waiver fairly soon. He adds, however, that his department is unlikely to see additional resources allocated to it to deal with this new regulation any time soon.

“As with most of life, we will do some thinking in advance and deal with notification letters when they come in. I expect there will be some litigation from some parties to work out the precise scope and workings,” he says. “That’s normal legal life.”

Isabelle Schubert, global head of IP strategy at Novartis, adds that it is similarly too early for her company to be planning for the waiver, and that she is primarily concentrating on getting everyone up to scratch with the new regulation’s various provisions.

“Not much will change before 2022 – at least not visibly to the public,” adds the head of IP at another international drugs firm.

“Some generic companies may begin to strategise around which products they foresee relying on the waiver for, and how they will put that into practice – what activities they could take in the EU, what they will need to disclose, and when. But we won’t see the results of that for three years.”

He says that on the innovator side, there have been some suggestions that innovators will be forming strategies for what additional patents they can file in order to prevent the SPC waiver taking full effect.

The waiver is only an exemption under the SPC, and ‘secondary patents’ that protect ways of making an SPC-protected medicinal product could still pose a risk even when the waiver is in play.

“Personally, I would be surprised if companies weren’t already filing those secondary patents regardless of the introduction of the waiver.”

He adds that in the biologics space, the value of patents relating to methods of making the drug product has been clear for a long time; particularly since the US introduced the biosimilar approval pathway and associated patent litigation scheme (the BPCIA, also known as the ‘patent dance’).

“There is a decision that businesses must make when innovations are made during the development of the commercial-scale manufacturing process, however. Is there more value in trying to protect this process innovation, and thereby disclose it to the public, or simply keeping it confidential?”

In that calculation, he adds, the introduction of the BPCIA probably tilted the balance towards filing a patent in the US because, under the patent dance, the biologic innovator gets full disclosure of the process used by the biosimilar manufacturer.

“That means that having a strong portfolio of process patents is beneficial because it adds an extra layer of protection against biosimilar competition. It doesn’t really constitute a change in strategy, but these process patents might now take additional significance in light of the SPC waiver.”

Patent office fees?

At this week’s Pharmaceutical Patent Term Extensions Conference in Munich, representatives from the German, Portuguese and Netherlands patent offices discussed whether they were planning on introducing fees for administering SPC waiver notifications.

Martijn de Lange, patent examiner at the Netherlands Patent Office, said his organisation was considering forgoing the issue of the fees but had not yet decided.

“It is in the regulation that the fees should not exceed the cost associated with dealing with the publication,” he said. “Unfortunately we do not have the faintest idea how many of these notifications we will get, and are constructing our IT systems to cope with that.”

He added that because the waiver will only apply to SPCs netween 2019 and 2022 that were filed for after July 1 2019, it will presumably only cover a small number of rights before the three-year implementation period is over.

“Many more will only be affected by July 2022. We do not expect too many and the cost will not be high – we will come to a decision in three years.”

Oliver Werner, head of the SPC working group at the German Patent and Trade Mark Office, said he suspected that his organisation would not ask for a fee to process notifications.

“It takes more work to administrate a fee system than to not charge one,” he said. “All we do is copy the information in the database and publish it – it is purely an administrative matter, and if you fail to tick the right box it is not our problem.”

Inês Cristóvão Silva, head of the patent and utility model department at the Instituto Nacional da Propriedade Industrial (the Portuguese IP office), said on the other hand that her office had decided to charge a fee but that it did not yet know how much that fee would be.

She added that the office will publish some guidance on how it will deal with the SPC Waiver by the end of this week.

With the SPC waiver soon to come into effect, businesses are not yet in a rush to prepare. The priority now is identifying some of the products that the waiver might cover, promoting education on its provisions and, for patent offices, working out how much it might cost and whether to charge for notification processing.

Major talks will likely start in a year, but there are hopes from the innovator sector that the WTO will kill the new regulation off before then.

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