Betting on innovation, the case for the SPC

This is the third blog telling the story behind the EFPIA Manifesto, we have already explored Health Technology Assessment and transitioning to outcomes-focused health. I would like to dedicate this blog to maintaining and developing Europe’s Intellectual Property (IP) framework, in particular the Supplementary Protection Certificate (SPC). This is particularly important given the ongoing discussions on the European Commission proposal to introduce a targeted exception to SPC rights, the so-called "SPC manufacturing waiver for export".

If we think of the challenges faced by healthcare systems under pressure from an ageing population and increased prevalence of chronic disease, then it is only through innovation leading to new solutions that we will have a chance to create a healthier future for Europe. IP rights and incentives are the foundations of medical innovation. They ensure that, for a limited period in time, the investment in the 10 to 15-year period it takes to develop a new treatment, is recovered to make way for new investments in new solutions. We won’t address the challenges of dementia or rising rates of cancer through reducing incentives to innovate. It will be by finding new treatments and cures as well as working with our partners in Europe’s healthcare eco-system to see how we can introduce these treatments in a way that is affordable now and sustainable in the longer term that we will find solutions to patients’ needs.

I am extremely passionate about this industry because what we do improves and at times even saves the lives of people across Europe and beyond. Even in this era of rapidly advancing science, medical innovation is hard – it takes years, countless failures and increasingly complex regulatory processes, to find the one molecule out of ten thousand that actually makes it to being a new treatment for patients. How many of you would put your money on a 10 000 to 1 bet? Investors do, our members do, and they can and do decide to because there is a stable and predictable IP environment in Europe that assures them that eventually they will be able to find those therapies, that 1 in 10 000, and stay in business to find more. Destabilise that framework, reduce it and that investment becomes too much of a gamble.

SPCs are one of the key elements of our IP framework in Europe that incentivises the search for better medicines and care for patients. Designed by the EU to help stimulate the discovery of new treatment and cures, they aim to partially compensate innovators for the substantial patent time lost during lengthy clinical tests, trials, and other regulatory requirements needed to secure approval of a medicine. Around half the patent life of a new medicine is taken up by these processes. As such, SPCs are very real drivers of innovation that continue to produce tangible outcomes for patients and were for a long time unique to Europe giving the region a competitive advantage in terms of attractiveness for investments and growth.

For example, Fingolimod is a medicine that failed in its initial indication for renal failure after a kidney transplant. Thanks to the SPC which enabled continuous investment in new extensive research and clinical trials, Fingolimod was eventually brought to the market for the treatment of Multiple Sclerosis. Today it is considered a milestone in the treatment of this disease which would not be available would it not be for SPCs.

Another example is Secukinumab, a medicine that set new standards for the treatment of ankylosing spondylitis - a type of arthritis that affects the spine - as well as psoriatic arthritis. Secukinumap had to undergo complex trials with prolonged timelines due to the complexity of the enrolment of adult and paediatric patients. The prospect of offsetting some of this time spent on research, thanks to an SPC, made the investment and therefore the final product possible.

These are just two of many concrete examples of how the EU’s robust IP eco-system transforms the lives of patients and improves health outcomes every day.

We are concerned that the European Commission proposal to introduce an export manufacturing waiver to the SPC sends a signal to the world that Europe is weakening its commitment to IP incentives and innovation. However, we also recognise the efforts to clarify the scope of the proposal as well as introduce safeguards, to mitigate potential spill-over effects that would further erode IP rights and could have the (perverse effect of) disincentivising investment in Europe, putting jobs and economic growth at risk, as well as the advancement of patient care.

Our call to the policy-makers in the European Parliament and the Council is therefore to ensure clarity and legal certainty on what the waiver entails, the conditions under which it applies, and it does not further reduce IP incentives for innovation. Our key requirements for the proposal include:

  • Ensuring transparency & legal certainty for all parties
  • A timely and fair notification system
  • Labelling measures which prevent products manufactured under the Waiver for export from being re-directed back to the EU or being launched on the EU market before SPC expiry
  • Non-retroactive implementation
  • Limited scope as per the European Commission proposal

We believe these are sensible provisions to avoid weakening Europe’s IP framework further, particularly in today’s context of intense global competition for pharmaceutical research and development investment.

As an industry investing more than 35 billion euros in R&D in Europe every year, and employing over 750,000 people we are ambitious about making the EU a world leader in medical R&D, delivering new medicines for patients, and economic prosperity for Europe. We hope policy-makers across the EU institutions share that ambition.

Nathalie Moll

Nathalie Moll joined the European Federation of Pharmaceutical Industries and Associations (EFPIA) as Director...
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