The EU and APIs: Changing the Rules of the Game in Manufacturing

Innovator and generic-drug companies are squaring off on a proposal by the European Commission (EC) for an export manufacturing waiver for supplementary protection certificates (SPCs) in the European Union (EU). What are the implications for pharmaceutical companies and manufacturers of active pharmaceutical ingredients (APIs)?

SPCs extend protection of patented medicines in the EU by up to five years to compensate for the time lost in obtaining regulatory approval of the medicine. During this period, European manufacturers of generic-drugs and biosimilars cannot produce their medicines in the EU. The EC proposed an export manufacturing waiver to SPCs earlier this year, and both innovator- and generic-drug companies are seeking changes.

Manufacturing and SPCs

The purpose of the original EU legislation that authorized SPCs, which was enacted in 1992, was to recompense product-development companies for the time taken to obtain regulatory approval of their medicines and give them longer market exclusivity in the form of a SPC. The SPC regulation, however, according to some, has had the unintended effect of putting the European generic-drug, biosimilar, and active pharmaceutical ingredient (APIs) manufacturing industries at a competitive disadvantage vis-à-vis manufacturers producing in non-EU countries where no similar patent/SPC protection exists. During the time of SPC protection, EU-based manufacturers of generic drugs or biosimilars cannot produce generic or biosimilar versions of these medicines for sale in the EU, export these medicines to countries where the SPC does not apply, or produce and stockpile medicines for the EU market in advance of the day of SPC expiry. Critics of SPCs say that European manufacturers are currently required to outsource production outside Europe to supply countries without SPCs or where SPCs expire earlier than in Europe in order to provide competition as soon as SPCs expire in Europe.

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