Blog: SPCs post-Brexit: where are we now? – Lexology

Introduction

The COVID-19 vaccine roll-out has undoubtedly thrust the post-Brexit divergence for the approval of medicines between the United Kingdom and the European Union, and the race to vaccinate local populations, into the spotlight. Changes to the processes for obtaining marketing authorisations (MAs) for medicinal products are one of the many differences brought about as a result of the United Kingdom’s departure from the European Union. However, behind the high-profile headlines is the knock-on effect that these changes will have on the regime which governs supplementary protection certificates (SPCs) in the United Kingdom. Although at first glance the changes may not appear drastic, the differences between the UK and EU regimes are enough for SPC holders, and the life sciences sector more broadly, to take notice.

This article considers the changes to the SPC regime and the SPC manufacturing waiver (SPCMW) in the United Kingdom.

What is an SPC?

An SPC may extend the protection that a patent confers to an approved medicinal product by up to five years (plus a further six months if a paediatric extension (PE) is granted). The rationale behind the SPC regime is to compensate patent holders for the delay experienced as a result of the time that elapses between their filing of the relevant patent application and the grant of the MA necessary to place the medicinal (or plant protection) product on the market in a given jurisdiction.

To obtain an SPC, applicants must comply with the requirements of the EU SPC Regulation (469/2009/EU) set out in Article 3 thereof, which has been the subject of many referrals to the European Court of Justice (ECJ). A detailed discussion of these provisions and the related case law is beyond the scope of this article, but at a high level, there must be a valid patent which protects the active ingredient and a granted MA to place the active ingredient on the market as a medicinal (or plant protection) product.

The EU SPC Regulation has been incorporated into UK law by the European Union (Withdrawal) Act 2018, with subsequent amendments necessary to accommodate the United Kingdom’s new SPC regime.

An SPC is a national right which extends only to the territory covered by the patent and the underlying MA. As such, the changes effected by Brexit to the regulation of MAs in the United Kingdom since 1 January 2021 have also affected the UK SPC regime and have required certain amendments to the SPC Regulation to be introduced in the United Kingdom.

Changes to UK MA regime

As part of the withdrawal agreement between the United Kingdom and the European Union, the Northern Ireland Protocol contains provisions which aimed to avoid a hard border between Northern Ireland and the Republic of Ireland. To facilitate the free movement of goods between Northern Ireland and the Republic of Ireland, medicines placed on the market in Northern Ireland continue to be governed by EU legislation.

This has led to a divergence in the MA regimes between Northern Ireland and Great Britain. Since 1 January 2021, all MAs for products to be sold in Great Britain must be granted by the UK’s medicines regulator, the Medicines and Healthcare products Regulatory Agency. By contrast, MAs which apply to Northern Ireland may be granted by the EU regulatory authority, the European Medicines Agency. The outcome is that there are now three types of MA that may exist for products on the market in the United Kingdom:

  • a UK MA (ie, an MA that is valid in both Great Britain and Northern Ireland);
  • a Great Britain MA; and
  • a Northern Ireland MA.

Whereas previously the UK SPC regime concerned only a single UK-wide MA, the presence of multiple MAs which cover different territories within the United Kingdom has necessitated changes to this regime.

What has changed for UK SCPs?

At first glance, the changes to the UK SPC regime appear limited. As mentioned above, the EU SPC Regulation was incorporated into UK law by the European Union (Withdrawal) Act 2018, and broadly continues to have effect, with only a few substantive changes. These changes have been incorporated into UK law by:

  • the Patents (Amendment) (EU Exit) Regulations 2019;
  • the Intellectual Property (Amendment etc) (EU Exit) Regulations 2020; and
  • the Supplementary Protection Certificates (Amendment) (EU Exit) Regulations 2020.

Many of the key considerations for SPC holders remain the same:

  • The conditions for obtaining an SPC remain essentially the same, save for the introduction of references to the newly created Great Britain and Northern Ireland MAs.
  • The maximum SPC term remains five years and continues to be calculated by reference to the grant of the first MA to place the product on the market in the United Kingdom or the European Economic Area (EEA).
  • Applicants must still file SPC applications within six months of the date on which the reference MA is granted or within six months of the date of grant of the patent, whichever is later.

However, one of the key differences under the new UK regime is the scope of SPCs. Because SPCs can be granted only where there is a valid MA in the same territory, it means that where, for example, an MA is granted in Northern Ireland, the MA and patent holder will be able to apply for an SPC to cover only Northern Ireland. Until there is a valid Great Britain MA, there can be no SPC that covers Great Britain.

Where, however, the Great Britain MA in this scenario is granted before the Northern Ireland SPC takes effect, the SPC (or SPC application) can be extended to cover Great Britain. The same provisions exist in the alternative scenario (ie, where a Great Britain MA is granted first).

The second, and arguably more significant, consequence of the changes to the UK MA regime is the effect on the calculation of the duration of an SPC in the United Kingdom versus the European Union. As mentioned above, from a UK perspective there is no change regarding the pre-Brexit position when it comes to duration. The term of the SPC is still calculated by reference to the date of the first MA anywhere in the United Kingdom or, importantly, the EEA. By contrast, since its departure from the European Union, the United Kingdom is now recognised as a third country for the purposes of the EU SPC Regulation. As such, the grant of a Great Britain MA will not start the clock for the purposes of calculating the duration of an SPC in any jurisdiction in the European Union.

Fact or fiction?

An SPC holder may therefore be afforded a shorter period of protection in the United Kingdom than it would receive under the EU SPC regime. Although a difference in the period to grant for an EU MA is unlikely to be as long as one year, there is a real possibility for differences in the dates for grant of the Great Britain and EU MAs. UK Government guidance published in light of Brexit has promoted its desire to introduce a faster and more efficient process for the grant of MAs, particularly for innovative medicines. Therefore, it is possible that there may be differences for the dates of grant of MAs between the different jurisdictions.

The possibility of a reduction in the duration of an SPC ultimately affects the overall exclusivity that an SPC holder has over its marketed product. Whether these differences will lead to discrepancies in investment between the EU and UK markets remains to be seen.

PE regime

The PE regime aims to incentivise SPC holders to invest research into paediatric indications. The overall effect is an extension of the period of exclusivity attached to the SPC term of up to six months. There is little by way of difference regarding PEs under the new UK SPC regime. However, as a simplification to the UK regime, PE applicants will no longer have to prove the grant of an MA in all EU member states before making a PE application.

However, the potential for differences between the duration of SPCs in the United Kingdom and the European Union may provide some food for thought for businesses which are considering whether to take on the cost of implementing a paediatric investigation plan in the United Kingdom.

Implementation of SPCMW

Of great interest to many pharmaceutical manufacturers is the SPC manufacturing waiver (SPCMW), which came into force in July 2019. The SPCMW is a derogation from the protection afforded to an SPC holder which allows competitors to begin manufacturing the product (or any related act that is strictly necessary for manufacturing the product) in the jurisdiction during the term of the SPC. The changes to the post-Brexit regime for the SPCMW also broadly mimic the pre-Brexit position from a UK perspective.

The relevant period during which manufacture can take place in the United Kingdom during the SPC term is dictated by where the products are intended to be put on the market:

  • Where the products are intended for the UK or EU markets, manufacture can begin in the United Kingdom only during the final six months of the SPC term. On expiry of SPC protection in the relevant market, the products which have been manufactured during these six months can be placed on the market in the United Kingdom or the European Union where SPC protection no longer applies. This is known as the ‘stockpiling waiver’.
  • By contrast, where the products are intended for a market outside the United Kingdom and the European Union, manufacture can take place in the United Kingdom at any point during the term of the UK SPC. This is known as the ‘export waiver’.

Significantly, however, following Brexit, no reciprocal provisions exist under the SPCMW in the European Union. Instead, the United Kingdom is now recognised as a third country for the purposes of the EU SPCMW regime. The consequence is that manufacture for export to the United Kingdom in an EU jurisdiction falls under the export waiver and not the stockpiling waiver, as would have been the case pre-Brexit. In practical terms, this means that such manufacture for export to the United Kingdom following the SPC’s expiry can take place at any point during the term of the SPC in the EU jurisdiction. This may disadvantage UK manufacturers, which are limited to production for the UK market only during the final six months of the UK SPC term.

Divergence in law

Prior to Brexit, the UK courts could refer issues of interpretation of the EU SPC Regulation to the ECJ. However, post-Brexit, such referrals are no longer possible. While the UK Intellectual Property Office and the UK courts will continue to apply existing ECJ case law, they need not follow ECJ decisions issued after 1 January 2021. This therefore leaves the potential for a divergence between the ECJ’s and the UK courts’ interpretation of the EU SPC Regulation going forward.

When it comes to the EU SPC Regulation, there is certainly reason to wonder whether a change in judicial approach might not be too far off. Article 3(a) of the EU SPC Regulation, which provides that an SPC may be granted “if the product is protected by a basic patent in force”, has been the subject of much debate. Certain members of the UK judiciary previously advocated a ‘core inventive advance’ test for the purposes of interpreting Article 3(a), by which to be protected by a basic patent, the active ingredient (or combination thereof) must embody the core inventive advance of the basic patent. The ECJ’s 2020 decision in Royalty Pharma (C-650/17) dismissed the possibility of this test for the purposes of interpreting Article 3(a). Whether the UK courts will take the opportunity to revisit this remains to be seen. However, it is a distinct possibility that should new issues of interpretation arise, the law which applies to SPCs may become clearer in the United Kingdom quicker than elsewhere, given the United Kingdom’s ability post-Brexit to develop its jurisprudence independently and, if necessary, amend its own legislation.

Comment

The changes introduced by the amended UK SPC regime are for the most part minor and will likely not lead to any great reformulation of the law in this area. However, differences may emerge as a result of Brexit and there may be a divergence in whether a given product is entitled to an SPC. This may have important consequences for pharmaceutical manufacturers that supply both the EU and UK markets and should not be overlooked by SPC holders.

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