BIA ‘Reassured’ On Post-Brexit SPC Regime But Data Exclusivity Concerns Remain
Executive Summary
The government has said it is prepared to discuss the terms of supplementary protection certificates under a UK-only regime if there is a no-deal Brexit, but concerns also linger over the start dates for regulatory data protection.
The UK BioIndustry Association has welcomed government reassurances that a provision in the “no-deal Brexit” legislation on supplementary protection certificates, which it says could lead to shortened protection times on pharmaceuticals in the UK, is only intended to be temporary and that the future SPC regime will be discussed further with industry if the UK leaves the EU without a deal.
The government said last year that in the event of a no-deal Brexit it would retain EU legislation on SPCs that, along with existing support provisions in UK patent legislation, would form the UK’s own freestanding SPC regime. (Also see "‘No-Deal’ Brexit: UK Would Keep Rules on Patents, SPCs & Parallel Trade" - Pink Sheet, 28 Sep, 2018.)
But it is the criteria on which SPCs would be awarded that have unsettled industry, which fears that intellectual property protection could be weakened, thereby deterring investment in the UK after Brexit.
SPCs prolong the effective patent life of pharmaceutical products for up to five years from patent expiry. Under a UK-only system, the UK SPC period would begin from the date of the first marketing authorization (MA) for the product in the European Economic Area, as is currently the case, rather than from the date of the UK MA, according to Article 3 of the government’s draft Patents (Amendment) (EU Exit) Regulations 2018, which have been published in the form of a Statutory Instrument.
“This would have the SPC’s duration aligned with those granted elsewhere in Europe on the basis of first authorisation in the UK/EEA (i.e. even if the UK authorisation was later),” according to the BIA, which says there has been no formal consultation on the proposals. “In a no-deal reality it is therefore likely that patent protection will be reduced for companies that launch new products in the UK.”
The aim of this provision appears to be to encourage companies to seek marketing authorization for their new products in the UK at the same time as in the EU: there are concerns that after a no-deal Brexit companies might prioritize the much larger EU market over the UK, which would have to set up its own freestanding drug approval system.
The matter was discussed during a session of the Grand Committee of the House of Lords last month when Lord Warner, a former health minister, raised the BIA’s concern over the Article 3 proposal. “In so far as one understands why the Government are doing it this way, it appears that they are seeking to encourage life sciences companies to launch medicines in the UK at the same time as they launch them in the EU/EEA.”
The BIA, he continued, “fully understands what the intention is; it just does not agree that it will have the effect that the Government think it will. The BIA says that in reality many of its member companies are saying that the regulation is more likely to delay further the launch of a medicine in the UK and is adversely affecting the global reputation of the UK as a location for the life sciences industry.”
Ready To Talk
The government does not appear to be budging on the SPC proposal as it stands, but it has signaled that it is prepared to discuss the situation further in the event of a no-deal Brexit.
According to the BIA, during a second House of Lords debate on Feb. 6, the Parliamentary Under-Secretary of State at the Department for Business, Energy and Industrial Strategy, Lord Henley, recognized the association's wish to have the legislation changed so that the term of the SPC was calculated "based on only a UK marketing authorization." He “provided reassurance that if they come into law, the ‘no deal’ Statutory Instruments (SIs) are a temporary solution, and that Government is considering options for a future regime and will consult with business.”
Lord Henley said that if there was a no-deal Brexit the government would “immediately start to explore the future landscape with the sector,” including discussion of the SPC term. The UK healthcare products regulator, the MHRA, has already said that there would be a review of this within two years.
BIA CEO Steve Bates said his member companies would “welcome the Minister’s assurance that this Statutory Instrument (SI) is a temporary solution,” adding that if there was a no-deal Brexit and the regulation came into effect, it would be “essential” to have “an immediate formal stakeholder consultation – and BIA stands ready to assist.”
RDP Concerns Too
Industry has expressed similar concerns about the government's draft regulations on regulatory data protection (data and market exclusivity). These periods would not in themselves change, but they too would be calculated from the date of authorization in the EU/EEA or the UK, whichever was earlier. Again the intention seems to be to encourage companies to apply for a UK marketing authorization earlier than they otherwise might have done.
Lord Warner noted that this meant “the exclusivity term for a medicine in the UK would be reduced as a result of the Article 3 amendment in these sets of regulations compared to the rest of the EU.”
The BIA and the other UK pharmaceutical industry body, the ABPI, have already complained about the government’s proposals. In a joint statement in November 2018, they said they were “concerned that the proposal for data and market exclusivity for marketing authorisations is not being consulted on. Data exclusivity is a critical incentive for innovation and therefore highly important to the life sciences industry.”
For this protection to fulfill its intended function in recognizing the “enormous investment lying behind clinical trials for new medicines, it is vital that the term should be connected to the actual date of grant of a marketing authorisation in the UK which enables its holder to place the medicine on the UK market. The terms of data exclusivity and other protection (SPCs and orphan exclusivity) may influence the choices made by companies and therefore the activities of the regulatory authority,” the associations said. “The ABPI and the BIA trust that the MHRA and Government will consider and address these concerns as they work towards the final statutory instruments."
Need For Strong IP Framework
Bates said that while the UK life sciences sector was currently thriving, it had much to lose from a no-deal Brexit. “Maintaining a strong intellectual property framework is essential if the UK wishes to have long-term sustained investment in R&D and remain a globally attractive location for international investment. Any signals that the UK may not offer the same patent protection after Brexit will adversely impact the global reputation of the UK as a location for the life sciences industry.”
The BIA CEO expressed alarm at the way that the government was pushing through its no-deal legislation in general: “We were concerned at the rushed nature of this and other SIs and in particular the adverse signals that they are sending globally.”
More SPC Issues
The effectiveness of SPCs is also the subject of an ongoing spat in the EU between the originator and generic/biosimilars industries. Here, the parties are arguing over the proposed “manufacturing waiver” that would allow generics companies to manufacture products for export outside the EU, and possibly for pre-launch stockpiling in the EU, during the SPC protection period on the reference drug.
The generics industry argues this will result in greater manufacturing activity within the EU and speed up access to cheaper generics and biosimilars, while originator companies insist it will weaken Europe’s R&D effort and “drive away investment and jobs.” (Also see "Two-Year Stockpiling Provision ‘Vastly Improves’ European SPC Waiver" - Generics Bulletin, 25 Jan, 2019.) (Also see "European Council Move Brings SPC Manufacturing Waiver A Step Closer" - Pink Sheet, 17 Jan, 2019.)
From the editors of Scrip Regulatory Affairs.