ARES(2018)851023
Ref. Ares(2019)631504 - 04/02/2019
To: Commissioner Elżbieta BIEŃKOWSKA
Internal Market, Industry, Entrepreneurship and SMEs
European Commission
Rue de la Loi, 200
1049 Brussels
Cc: Lowri Evans, Director General, DG Grow
Antti Peltomäki, Deputy Director-‐General, DG Grow
,
, DG Grow
Ref: NM/67.603
Subject: EFPIA response to request for information on the SPC Manufacturing Exemption impact
Brussels, 13 February 2018
Dear Commissioner Bieńkowska,
We would like to fol ow-‐up on the discussion that we had together with our EFPIA President, Mr. Stefan
Oschmann, and a delegation of our Board members on 30th January this year. During that meeting and in our
subsequent letter to you, we raised the concern that introducing an SPC manufacturing exemption risks
harming the innovative pharmaceutical industry in Europe, and that a further structural and holistic analysis of
the innovative, biosimilar and generic industries is necessary to accurately consider the impact of an SPC
exemption. We are happy to comply with your request for further information on the impact that the proposed
SPC manufacturing exemption may have on the EU’s trade balance and took note of your reflections on the so-‐
cal ed “first mover” advantage for Canadian generics. You asked that any further submission of information be
made within two weeks.
With regard to the European trade balance, we have reviewed various studies published in relation to a
potential SPC manufacturing exemption and our conclusion is that the impact of an SPC manufacturing
exemption on the EU trade balance remains uncertain or could even be negative. Existing evidence -‐ the
Pugatch Consilium, in their study
“Unintended and Unattended Consequences: The Opportunity Costs of
Reducing Exclusivity Rights for Intel ectual Property”, estimates that the impact on EU export sales would be
negative as the European innovative biopharmaceutical industry could stand to lose between € 1.09 bn (USD
1.34 bn) and €1.85 bn (USD 2.27 bn). This negative effect on the trade balance is further il ustrated by the
QuintilesIMS study on
“Assessing the impact of proposals for a Supplementary Protection Certificate (SPC)
Manufacturing Exemption in the EU” which shows that the SPC manufacturing exemption could result in
replacing more high-‐value innovative exports with lower value generics. Consequently, this would cause a
worsening in the EU’s trade balance. The conclusions drawn in the abovementioned studies have also been
confirmed in the Office of Health Economics (OHE) report, which we have shared as part of our response to the
Consultation.
With regard to the proposed “first mover” advantage, based on the published studies, it can be concluded that
such an advantage for smal molecules would depend on the market to which generics would be exported and
that for biosimilars there is no evidence of a first mover advantage. For example, generics exports to Russia and
Turkey (two markets identified as potential export targets) would face a range of trade barriers, price levels,
EFPIA Brussels Office
Leopold Plaza Building Rue du Trône 108
B-‐1050 Brussels Belgium
Tel: + 32 (0)2 626 25 55
www.efpia.eu xxxx@xxxxx.xx
ability to manage local commercial relations and local incentives that give local generic companies a significant
advantage. In Canada, Certificates for Supplementary Protection (CSPs) were introduced via Canadian
legislation in September 2017, following CETA’s provisional entry into force. The export exemption under CETA
wil however not have effect for nearly 10 years, since the newly introduced SPC-‐like protection will only start
at the end of the patent life of certain products launched in Canada after September 2017. Even then, any
“advantage” would depend on a variety of other factors beyond the exemption.
EFPIA and its membership remain highly concerned that numerous uncertainties and gaps remain in the
analysis of the short and long-‐term impact of a legislative provision such as a potential SPC manufacturing
exemption. We have analysed the different reports and studies on the SPC manufacturing exemption, and
conclude that key questions that could inform the actual impact of the issue at hand, are left unexplored and
unanswered such as the (non)treatment of innovation and innovation-‐related incentives and the lack of
analysis of any displacement effects of an exemption. We attach a gap analysis on the issues that we believe
need to be further examined before an informed and balanced decision can be taken on an SPC manufacturing
exemption. These issues would need to be addressed in the spirit of ensuring evidence-‐based policy-‐making
that takes account of al available information and respects the Innovation Principle. Better Regulation would
also suggest that where uncertainties or unknown elements remain, these elements need further exploration.
EFPIA therefore strongly recommends that the Commission undertake a robust analysis of the ful eco-‐system
of the pharmaceutical sector that can address the questions in the attached gap analysis to ensure that any
decision on an SPC manufacturing exemption promotes the global competitiveness of the EU, creates jobs and
growth, and ensures a continued contribution of the EU pharmaceutical industry to a positive EU trade balance,
in line with the Commission’s Industrial Policy Strategy. Furthermore, we believe that such an analysis should
assess any potential inconsistencies with existing EU legislation and policy on the overarching incentives
system. Finalising the assessment of all policy elements as indicated by the Commission in its roadmap of
February 2017 remains crucial. More importantly, all elements of the incentives evaluation should be
considered to find a balanced solution for al EU-‐based manufacturers in support of sustainable innovation.
Thank you for your consideration and for the opportunity to provide you with this information. EFPIA and its
members remain at your ful disposal for any additional information you may require and continue to be ful y
committed to delivering on our commitment to patients, society and a strong European economy.
Best wishes,
Nathalie Moll
Director General
EFPIA Brussels Office
Leopold Plaza Building Rue du Trône 108
B-‐1050 Brussels Belgium
Tel: + 32 (0)2 626 25 55
www.efpia.eu xxxx@xxxxx.xx
Electronically signed on 04/02/2019 15:18 (UTC+01) in accordance with article 4.2 (Validity of electronic documents) of Commission Decision 2004/563