COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 469/2009 concerning the supplementary protection certificate for medicinal products
Date: 2018-05-28
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: administrative formalities, export (EU), market approval, medicinal product, pharmaceutical legislation, public health, single market

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   EUROPEAN COMMISSION  Brussels, 28.5.2018  SWD(2018) 241 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  Accompanying the document Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 469/2009 concerning the supplementary protection certificate for medicinal products {COM(2018) 317 final} - {SEC(2018) 246 final} - {SWD(2018) 240 final} - {SWD(2018) 242 final}  
 
 
Executive Summary Sheet 

Impact  assessment  on  a  Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  amending 
Regulation 469/2009 concerning the supplementary protection certificate for medicinal products. 

A. Need for action 

Why? What is the problem being addressed?  
The  problem  relates  to  the  existing  EU  regime  (Regulation  (EC)  No  469/2009)  concerning  the  supplementary 
protection  certificate  (SPC)  for  medicinal  products,  which  was  introduced  in  1992  and  provides  for  additional 
(patent-like) protection for pharmaceutical products subject to market authorisation, by up to 5 years after patent 
expiry  (5.5  years  in  case  a  paediatric  extension  is  granted).  While  the  benefits  of  an  SPC  for  its  holder  are 
significant,  the  SPC  system,  as  a  result  of  significant  changes  in  pharmaceutical  markets,  is  now  having 
unintended  side  effects  on  the  competitiveness  of  EU-based  manufacturers  of  generics  and/or  biosimilars 
(‘G/Bs’).  The  main  problems  are:  (1)  during  the  SPC  term,  they  cannot  manufacture  with  a  view  to  exporting 
G/Bs to third countries where protection has expired; and (2) immediately upon SPC expiry, they are not ready to 
place G/Bs on the EU market. EU-based G/B manufacturers thus risk foregoing significant export opportunities 
and  crucial  lead-time  to  enter  the  market  in  Member  States,  and  this  at  the  time  where  significant  new 
opportunities are opening up (cf. major patent cliff from 2020 onwards). Unless action is taken now, European 
manufacturers  risk  foregoing  significant  opportunities,  and  this  will  in  turn  have  a  negative  impact  on  jobs,  on 
patients  (increased  import  supply  dependency,  higher  prices  through  limited  competition)  and  on  research  for 
biosimilars.  

What is this initiative expected to achieve?  
This initiative intends to restore the level playing field between EU-based G/B manufacturers and non-EU-based 
ones, which would be beneficial for the competitiveness of the former and the European economy as a whole, 
while  maintaining  the  current  high  level  of  IP  protection  in  the  EU.  Although  views  differ  about  the  exact 
magnitude of the benefits of the initiative, it is estimated that the envisaged solution (the introduction of an export 
waiver, cf. infra) could result in net additional export sales of EU-made pharmaceuticals of between EUR 0.6bn 
and  EUR  1bn  per  year  (for  a  sample  of  molecules  representing  32%  of  the  relevant  medicines).  The  initiative 
should also be beneficial for patients (due to speedier access upon SPC expiry to more affordable medicines) 
and for health systems, and should confirm EU’s position as a hub for pharmaceutical innovation, in particular in 
the biosimilars sector.  

What is the value added of action at the EU level?  
Only  action  at  EU  level  would  be  effective.  Action  by  Member  States  is  conceivable  (and  national  solutions 
based  on  voluntary  agreements  have  actually  been  tested  at  a  small  scale,  but  did  not  prove  effective),  but 
would go against the core objective of Regulation 469/2009, which is to provide for a uniform regime across the 
internal  market.  Moreover,  the  existing  Regulation  places  strict  limits  on  the  possibility  for  individual  Member 
States to address, in a unilateral manner, the problems identified. 

B. Solutions 

What  legislative  and  non-legislative  policy  options  have  been  considered?  Is  there  a  preferred 
choice or not? Why?  
Various options have been considered. Some options were discarded at an early stage, notably (i) relying only 
on the (on-going) efforts of the Union to convince its international trade partners to align their IPR regimes with 
the EU one, (ii) expanding the Bolar exemption, (iii) introducing new ad-hoc licensing measures systems and (iv) 
cutting down the maximum duration of SPCs. Options that were considered include, apart from the status quo 
option, a soft law approach (fostering voluntary, industry-led agreements); introducing a manufacturing waiver for 
export  purposes  only  and/or  for  export  and  stockpiling  purposes;  and  introducing  a  manufacturing  waiver 
accompanies by safeguard measures. Various timing option for entry into effect of a waiver were considered. 
The preferred option is to amend the existing SPC regime (Regulation (EC) No 469/2009) to introduce a ‘waiver’ 
allowing  G/Bs  to  be  manufactured  in  the  EU  during  the  SPC  term  for  export  purposes.  To  ensure  a  balanced 
approach, better protection of SPC holders in the EU, and transparency, this waiver would be accompanied by 
various  safeguard  measures,  such  as  labelling and  notification requirements.  With  regard  to  supplying  the  EU 
market shortly after expiry of the SPC, manufacturers taking advantage of this export waiver would, to a certain 
extent, also be ready for EU day-1 entry upon SPC expiry as they would have already operative manufacturing 
capacity.  

Who supports which option?  
EU-based manufacturers of generics and biosimilars – as well as, to some extent, patient groups and healthcare 

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stakeholders – support the preferred option. 
SPC  holders  (‘originators’)  support  the  status  quo,  as  they  fear  additional  competition  in  export  markets  (from 
G/Bs  manufacturers  based  in  the  Union)  and  increased  IP  infringements.  Regarding  the  former  concern,  it 
should  be  noted  that  the  waiver  might  lead  to  a  slight  reduction  in  sales  for  some,  but  this  reduction  will  be 
largely offset  by  the  expected benefits  the  proposal  will  bring  and  might occur  in any  event,  due  to  increasing 
competition from manufacturers based outside the Union. As regards the latter concern, it should be noted that 
the preferred option includes various anti-diversion measures that will work to the benefit of SPC holders.  
In  the  public  consultation,  some  Member  States  expressed  support  for  an  export  waiver  and  none  expressed 
explicit  opposition  to  the  idea.  Most  Member  States  took  the  view  they  might  support  the  initiative,  subject  to 
convincing  evidence  being  presented  in  terms  of  net  economic  impact.  The  European  Parliament  has 
underlined, in several Resolutions, its support for the preferred option. 

C. Impacts of the preferred option 

What are the benefits of the preferred option (if any, otherwise main ones)?  
The  preferred  option  would  boost  the  competitiveness  of  EU-based  G/B  manufacturers  in  respect  of  export 
during the SPC term and of timely entry on to the EU market upon SPC expiry. This is expected to results in net 
additional exports of EU-made pharmaceuticals nearing EUR 1bn per year (based on a limited sample covering 
only  32%  of  the  relevant  market),  with  all  of  the  obvious  beneficial  consequences  in  terms  of  job  creation 
(estimated  around  20-25 000  direct  jobs,  based  on  the  same  limited  sample)  and  reduced  relocation.  Even  if 
some studies contest the magnitude of these positive benefits, no study denies them altogether. In addition, the 
preferred  option  includes  effective,  but  not  cumbersome  or  costly,  anti-diversion  measures  (taking  special 
consideration of the SME angle), which will lead to a better protection against infringement of SPCs in the Union. 
Finally,  the  preferred  option  could  bring  positive  results  for  patients  and  healthcare  systems  (better  access  to 
medicines) and would boost R&D in the Union, for biosimilars in particular. 

What are the costs of the preferred option (if any, otherwise main ones)?  
The preferred option may cause a slight reduction in the sales of SPC holders (‘originators’), due to increased 
competition they would face from EU-based G/B manufacturers in export markets during the SPC term (in ‘non-
SPC’  third  countries,  which  are  anyway  fully  open  to  international  competition).  This  possible  erosion  of  sales 
(which may also impact on jobs) is estimated to be around 10 times lower than the estimated benefits for EU-
based G/B manufacturers, and might occur in any event (due to increasing competition based outside Europe). 
Virtually no administrative, compliance or other implementation costs are envisaged, although the anti-diversion 
measures proposed will imply some administrative work, but this should be largely offset by the fact that IP rights 
will be better protected. No other costs (e.g. environmental costs) have been identified. 

How will businesses, SMEs and micro-enterprises be affected?  
The  IA  includes  an  SME  test  which  looks  at  the  potential  impact  of  the  preferred  option  as  regards  various 
categories  of  SMEs  engaged  in  either  R&D  or  manufacturing,  of  either  so-called  'original'  products  or  generic 
and  biosimilar  products.    It  concludes  that  the  preferred  option  would  be  highly  beneficial  to  EU-based  SMEs 
manufacturing  generics  and  biosimilars,  as  it  is  more  difficult  for  them  than  for  larger  companies  to  set  up 
manufacturing  facilities  outside  the  EU  in  order  to  side  step  the  increasing  unintended  effects  of  the  EU  SPC 
regime. The proposal will also create new R&D and manufacturing opportunities for SMEs and start-ups in highly 
lucrative  and  fast-growing  sectors,  in  particular  as  regards  biosimilars  (where  there  is  intensive  investment  in 
R&D).  The  initiative  would  be  beneficial  for  dynamism  of  the  whole  EU  pharmaceutical  ecosystem  (start-up 
creation, etc.). 
As explained above, the preferred option might lead to a loss of potential sales of SPC  holders given that the 
latter will face increased competition in export markets, from G/B manufacturers within the EU. However, given 
that  such competition  might  occur  in any  event  and  given  that  the  preferred option  leaves  the  core  of  IP  SPC 
protection in Europe intact, the limited risk of losses of sales will have a very limited effect on the possibility for 
SMEs engaging in R&D to gain a return on their investments. This effect is largely offset by the beneficial effects 
of the proposal on the EU as a hub for pharmaceutical R&D at large.  

Will there be significant impacts on national budgets and administrations?  
Impacts  on  health  systems  are  expected  to  be  positive,  given  that  the  preferred  option  will  foster  more 
competition in European markets and is likely to facilitate the switching to cheaper medicines after the lapse of 
SPC protection. Increased R&D and manufacture in the EU will result in better access to medicines at a more 
affordable price. It will also lead to better security and quality of supply (less counterfeits, less uncertainty due to 
import reliance). 

Will there be other significant impacts?  
As mentioned above, the preferred option would be beneficial in terms of global competitiveness and trade, and 

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it will also entail positive effects for patients. The EU research community is expected to gain from this initiative 
(as  R&D  in  biosimilars  often  happens  at  the  same  place  where  manufacturing  takes  place),  which  would  help 
prevent the relocation of related research. 

D. Follow up 

When will the policy be reviewed?  
Yes, the actual impact of the amended SPC regime will be monitored, on the basis of pre-defined criteria. 

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