Mylan boss calls for supplementary protection certificates manufacturing waiver

Out-Law News | 21 May 2018 | 3:52 pm | 2 min. read

Generic drug manufacturers should be able to manufacture medicines that are within the scope of supplementary protection certificates (SPCs) for export to non-EU markets during the time that those SPCs apply, Mylan's European president has said.

Jacek Glinka said the introduction of a manufacturing waiver for SPCs could lead to up to 25,000 new jobs in Europe's pharmaceuticals industry by 2025, according to a report by the Irish Times.

The introduction of such a waiver is being considered by the European Commission, according to a consultation it held last year. However, life sciences specialist Karen Gallagher of Pinsent Masons, the law firm behind Out-Law.com, said the move would not be universally popular across the pharmaceuticals market.

SPCs serve to extend the life of a patent by up to a maximum of five years in the field of medicinal products. SPCs are provided for under an EU Regulation which is directly applicable across the whole of the EU, although they have to be applied for separately in each EU country.

The rationale for SPCs is to compensate patent holders for the period of patent protection during which they are prevented from commercialising their products owing to the lengthy drug approval process. Patent protection lasts 20 years but it often takes drugs companies around a decade to develop new medicines and gain marketing authorisation.

Currently, drug manufacturers based in the EU cannot begin their manufacturing operations while patents are in force. This restriction applies even in relation to exporting outside the EU to patent-free territories.

Glinka said the existing framework "impedes the growth of additional pharmaceutical manufacturing in Europe and in particular in Ireland, which given its impressive track record in this area, would be in pole position to make investment gains", according to the Irish Times' report. Mylan has premises in Dublin and County Galway in Ireland.

Gallagher said: "The potential introduction of an EU SPC manufacturing waiver is a controversial issue, and there are many competing commercial interests at stake. This is a significant issue in Ireland, which, according to the Irish Pharmaceutical Healthcare Association, is now the largest net exporter of pharmaceuticals in the EU."

"Generic pharmaceutical companies are lobbying the Irish government to back the introduction of an EU manufacturing waiver to allow them to commence manufacturing generic products in Europe despite the fact that the originator product is still protected by an SPC here, provided they do so for the purposes of stockpiling and/or export to countries where the originator is not protected by an SPC. The argument is that this will positively impact profitability and generate employment in the generic pharmaceutical sector in Ireland, and in Europe," she said.

"However, Ireland is also home to many research-based pharmaceutical companies. They are concerned about the erosion of their exclusive patent rights, and the practical difficulties of ensuring that generics produced under a manufacturing waiver are actually exported, and do not make their way onto the EU market. Therefore, the Irish government will also have to take account of the potentially detrimental economic effect that a manufacturing waiver might have on the research-based pharmaceutical industry before coming to a view on this issue. The effect on the pharmaceutical industry generally must be considered. An IMS study last year on the impact of the proposals highlighted that a manufacturing waiver might result in generic exports from the EU replacing exports of originator products, thereby decreasing the export value of pharmaceutical products for the EU overall," Gallagher said.

"The challenge for the EU is achieve a balance between these competing interests. To do so it must assess the potential impact on the EU pharmaceutical industry as a whole. This is what the European Commission consultation process seeks to achieve and the publication of its findings are eagerly anticipated," she said.