Ref. Ares(2018)6622688 - 21/12/2018
per e-mail: xxxxxx.xxxxxxx@xx.xxxxxx.xx
European Commission
www.eucope.org
M. Martin Selmayr
European Secretary General
Telephone:
Rue de la Loi 200
Telefax:
B-1049 Brussels
E-Mail:
Date: 26 March 2018
The European Commission's work on the SPC legislation
Dear Secretary General Selmayr,
On behalf of EUCOPE, which gives voice to innovative small and medium-sized enterprises in the pharma-
ceutical and biotech sector, I wish to express our deepest concerns regarding the potential legislative proposal
introducing a manufacturing waiver of Supplementary Protection Certificates (SPCs) for generic and biosimilar
companies.
A key ingredient of the EU’s framework for protecting intel ectual property rights (IPR), the SPC allows the
normal patent period to be extended by a further 5 years. Likewise, similar rights are granted in other jurisdic-
tions outside Europe, such as Australia, Japan, South Korea and the United States. As a result, developers of
new pharmaceutical products can compensate for delays associated with clinical trials and regulatory approval,
thereby guaranteeing return on their investment. Small and mid-sized companies in the biotech sector in par-
ticular are very dependent on tools like the SPC, due to the resources they must devote to research and
development.
In February 2017, the European Commission launched an impact assessment to explore the possibility of
reforming the SPC framework by introducing an exemption or ‘waiver’ which would allow EU-based manufac-
turers of generics or biosimilars to already manufacture their products within the period of European SPC
patent protection with a view to exporting their products to third countries that have no SPC protection. The
belief – which we dispute strongly – is that such a waiver might stimulate speedier entry to the European
market for generics and biosimilars, thus improving patients’ accessibility to medicines and generating savings
in health budgets.
As the impact assessment is in its final stages, we are extremely worried about the knock-on impact of a
potential reform on the overall incentives framework for new medicines. An SPC manufacturing waiver could
fundamentally undermine and unbalance a proven system that is delivering new life-changing medicines year
upon year.
As a trade association representing small and mid-sized businesses, our role in the system is to find new
medicines for patients with life-altering and life-threatening diseases. Weakening IP incentives for innovative
SMEs weakens Europe’s ability to deliver new medicines and compete on innovation. As highlighted at our
Breakfast event on 13 March on the topic of SME involvement in EU policy-making, particularly in the context
of the possible SPC revision, between 50 to 80% of return on investments is only achieved during the SPC
period. While ‘big pharma’ can divest away from high-risk disease areas to adapt to new regulatory regimes,
a legislative measure that seriously undermines SPC protection such as the manufacturing waiver means
small and mid-sized companies and start-up biotechs will struggle to gain the start-up capital needed to get
their operations off the ground. In the discovery business, small and mid-sized companies are responsible for
a high percentage of new molecules developed, which are then commercialized by larger companies. A dilution
of the SPC protection will be perceived by potential investors as the starting point of a major curtailment of the
incentives system. Consequently, companies will move away from high-risk R&D activities, leaving tens of
thousands of European citizens without treatments or cures.The Commission has not taken sufficient account
of the impact on jobs that a manufacturing waiver would entail, particularly as regards the possibility of geo-
graphical displacement, while over-estimating the alleged benefits of a waiver for European generics and bio-
similars, especially given the reality that much of generics manufacturing is moving to developing countries.
In addition to the major detrimental impact on innovation and small and mid-sized companies this initiative may
have, we must firmly object to the way the impact assessment has been handled by the Commission. The
process has been rushed, lacks thorough analysis of impacts, creates policy incoherence and in which our
EUCOPE •
, www.EUCOPE.org
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voice was inadequately taken into account, despite numerous letters to the relevant Directorate General and
its political hierarchy.
In particular, we must highlight the following defects in the process:
-
DG GROW has conducted consultations in a very rushed fashion that suggests it is using stake-
holder input simply to validate a pre-determined position. This is totally incompatible with the stand-
ards of consultation set out in the Better Regulation Guidelines.
-
In particular, the Commission has shown
a fundamental disregard for the interests of small and mid-
sized businesses. Despite indications that innovative small and mid-sized companies would be pro-
foundly affected by the introduction of an SPC manufacturing waiver, DG GROW has neglected to apply
the SME test required by the Better Regulation Guidelines in order to establish the extent to which a
proposal would affect the competitiveness of small and mid-sized companies, their business environment
and innovation at large. Worse still, it appears to be discriminating against such companies by prioritising
the input of larger market players.
-
DG GROW has failed to take account of the
risks of incoherence with other EU policies, particularly
in the area of trade where it has consistently promoted SPC frameworks and the importance of robust
IPR protection. It has also
failed to give due consideration to alternative, more proportionate policy
options that have already been implemented in Member States such as France; regrettably,
a soft law
option for the SPC waiver was excluded from the outset in the relevant Inception Impact Assessment1
and in the subsequent public consultation.
Given the seriousness of the issues set out above as well as the very restricted timeframe, we would appreciate
the opportunity to discuss this key file with you, from both a policy and ‘Better Regulation’ point of view. Please
find attached for your consideration two annexes, one explaining in more detail the Better Regulation principles
that have not been respected during this process and the other detailing the substantive questions the Com-
mission has not answered in its analysis of the SPC issue. Any supplementary information you may require
we will gladly provide.
We sincerely hope that our arguments will be taken on board and that the European Commission does not
take any hasty decision on the matter without thoroughly analysing the effects which would generate cata-
strophic consequences for small and mid-sized companies.
Yours sincerely
Cc:
Commissioner Elżbieta Bieńkowska,
First Vice President Frans Timmermans
Vice President Jyrki Katainen
Commissioner Vytenis Andriukaitis
Commissioner Cecilia Malmström
1 The Inception Impact Assessment of February 2017 explicitly excluded non-legislative instruments as an option for regulating the issue
3.1 : “
The policy objectives sought by options 3.2, 3.3 and 3.4 could be partially achieved by the non-legislative options described”