Supplementary Protection Certificates (Amendment) (EU Exit) Regulations 2020 — House of Lords, 2020-11-27
Topic: Mixed Topics
Martin Callanan (Conservative, Centre-right): My Lords, this instrument was laid before the House on 14 October. It seeks to ensure that the UK’s supplementary protection certificate system takes account of regulatory changes arising from the Northern Ireland protocol Intellectual property plays a vital role in the UK economy; it supports creativity, ingenuity and innovation, and provides incentives for research and development. The life sciences sector is one of the UK’s most valuable industries and is crucial to our success as a science superpower. It has consistently been the largest investor in research and development in the UK, investing over £4.5 billion in 2018 Supplementary protection certificates, or SPCs, are a particularly valuable IP right for this sector. They provide a way for the industry to recoup the costs of developing a new drug, which the Association of the British Pharmaceutical Industry has estimated may exceed £1 billion. The SPC system is designed to operate as a balance between supporting the development of new drugs and ensuring that those drugs become available more cheaply, through competition from generics, in good time. This enables the NHS to benefit both from innovative new medicines and the wide availability of existing treatments. It is important that the system is as clear and comprehensible as possible, so that rights holders and third parties have certainty about what they can and cannot do in relation to such a valuable right It may be beneficial if I explain briefly how the SPC system currently works, to set the context for the changes in this instrument. Before medicines and agrochemicals can be placed on the market, they must be approved for use by a regulatory body. Extensive testing of the product is required to demonstrate its safety, efficacy and quality, which of course takes time. If the product is patented, there can be a significant delay before the rights holder can benefit from the exclusive rights provided by their patent. SPCs are intended to limit the effect of that delay. In order to qualify for the additional protection of an SPC, the product must be protected by a patent and must have a valid authorisation that allows it to be sold on the market in the UK. The SPC system derives from EU law, which will be retained as domestic law at the end of the transition period. The Government have previously taken legislative steps to ensure that the system will function in the same way before and after that point. Noble Lords may recall that they approved the most recent of these after a good debate in early September However, the Northern Ireland protocol will result in changes to how medicines and agrochemicals are approved in the United Kingdom. This will have an indirect effect on the SPC system. The protocol means that products placed on the market in Northern Ireland must be approved in line with EU regulatory requirements. This ensures that they can move freely between Northern Ireland and the EU, avoiding a hard border. Approval to place a product on the market across the UK may therefore be provided by more than one authorisation, with different territorial and legal scopes. As I mentioned, one of the conditions to get an SPC in the UK is to have a marketing authorisation for the product which allows it to be placed on the market in the UK. The current SPC system assumes, however, that there will be a single authorisation across the whole of the UK; it is not designed to accommodate the arrangements that arise from the protocol This instrument therefore amends the two retained EU regulations on SPCs to fit the new regulatory arrangements into the SPC system. Let me be clear: an SPC will remain a UK-wide right. There will not be separate SPCs for Great Britain and Northern Ireland. If a patented product has been authorised for sale somewhere within the United Kingdom—whether in Great Britain, Northern Ireland or the UK as a whole—an SPC may be granted. However, the protection provided by the SPC will extend only to the territory in which the product has been authorised. This preserves the link between the SPC and the approval for the product. Up until the point the patent expires and the granted SPC takes effect, the protection can be extended further if another authorisation is granted for the product, covering additional territory. But, once the SPC is in force, no further changes will be permitted Taking this approach provides certainty for all parties. It would not be fair for a third party to find that a legitimate action they had taken, in a territory where the SPC did not provide protection, suddenly became an infringement at a later date. This is why the scope of protection is fixed in place when the SPC comes into force. Similar limitations will apply to the award of an additional six months of SPC protection, which is available for products that have been tested for paediatric use In terms of engagement with business on these changes, IPO officials contacted representative bodies and individual businesses in the pharmaceutical and pesticides industries as well as the IP legal profession, of course, following the publication of the Command Paper on the protocol. They set out the potential effect on SPCs and invited comments. Officials met with those who responded to discuss the proposed changes in more detail and get views on whether any additional issues needed consideration. At a later stage, these stakeholders were also invited to comment on a working draft of the legislation, providing valuable feedback to help finalise the wording Looking forward, the IPO is preparing business guidance to explain what the changes will mean in practical terms; this will be published shortly. Alongside the guidance, informal consolidations of the legislation will be provided, similar to the Keeling schedules, which were placed in the House Library. These were intended to allow noble Lords to see the amendments in context; I hope they were useful in that regard and that they will have the same benefit for businesses In conclusion, these regulations will ensure that the effect of the Northern Ireland protocol on the approval of medicines and agrochemicals is properly taken into account, while preserving the balance inherent in the current SPC system. I commend these regulations to the House.