Compulsory licensing is not an effective policy tool, warns EU biopharma group as it reacts to European IP action plan

By Jane Byrne

- Last updated on GMT

© GettyImages/Olivier Le Moal
© GettyImages/Olivier Le Moal

Related tags Intellectual property compulsory licensing

The European Federation of Pharmaceutical Industries and Associations (EFPIA) gave a cautious welcome to the EU action plan on intellectual property (IP), published yesterday, expressing alarm, though, over proposals within it on compulsory licensing.

The group praised the EU Commission’s commitment to launch a unified supplementary protection certificate (SPC) grant mechanism and/or to create a unitary SPC title; it said this move will bring more certainty, predictability and cost-effectiveness to everyone involved in the discovery, development and use of medicines in Europe.

“The COVID-19 crisis has clearly demonstrated that IP has driven and enabled the unprecedented research response leading to the availability of new treatments and vaccines for use in the fight against the pandemic,”​ said director general, EFPIA, Nathalie Moll.

However, EFPIA said it was extremely concerned to see reference in the IP Action Plan​ to coordinating compulsory licensing - a government’s authority to grant permission to a party seeking use of a patented invention without the consent of the patent owner - in emergency situations in Europe given the Commission’s stated aspiration to become a “global standard-setter in IP”​ and its commitment expressed, yesterday, in the EU pharma strategy to “support the competitiveness and innovative capacity of the EU’s pharmaceutical industry”.

Moll commented: “Compulsory licensing is not an effective policy tool to create access and puts at risk any incentive to invest in medical innovation at a time when citizens across Europe, across the world, are looking to the life science community to find the answers to the coronavirus crisis and build our resilience to future outbreaks.”

The Commission noted that IP rights, patents and supplementary protection certificates, in particular, protect innovative medicinal products and influence when competing products can come on the market.

The EU executive added that incentivizing innovation while ensuring access, availability and affordability of medicines are key considerations of the EU pharma strategy​, released yesterday [November 25]. “The EU's IP system works in tandem with the EU system of pharmaceutical incentives [such as] market protection, and data protection, both contributing to the same objectives.”

Background to new European IP policy

The newEU Industrial Strategy​ adopted on 10 March this year acknowledged the need for the EU Intellectual Property policy to help uphold and strengthen Europe's tech sovereignty and promote global level playing field and announced the adoption of the IP Action Plan.

On November 10, the Council of Ministers invited the Commission to present proposals for future EU IP policy.

The Commission underscored the need for transformation of the IP landscape. “While the EU has traditionally a strong IP framework, we are facing several challenges that undermine our creative and innovative efforts and hinder the EU from translating its R&D spending into modern and accessible market solutions. For instance, our IP system remains too fragmented with a costly patent system because we still have no unitary patent nor a unitary supplementary protection certificate (SPC).”

It outlined how most small and medium sized enterprises (SMEs) and many research institutions are not making full use of opportunities offered by IP protection. “Tools to provide wider access to IP are insufficiently developed; counterfeiting and piracy are still increasing and there is a lack of fair play at global level.”

Review of SPC framework  

A supplementary protection certificate (SPC) is an IP right that extends a patent (by up to five years) for a pharmaceutical or plant protection product that has been authorized by regulatory authorities, thereby encouraging innovation and promoting growth and jobs in these sectors.

An evaluation of the SPC framework​ finds that the EU SPC Regulations appear to effectively support research on new active ingredients, and thus remain largely fit for purpose. However, the Commission is exploring measures to strengthen the EU SPC regime to address the legal uncertainty, red tape and extra costs for businesses arising from the fact that SPCs are nationally administered and managed. One option is to introduce a centralized (‘unified') grant procedure, under which a single application would be subjected to a single examination that, if positive, would result in the granting of national SPCs for each of the Member States designated in the application. The creation of a unitary SPC, complementing the future unitary patent, would be another option.

“The COVID-19 crisis highlights the need for Europe to have a strong pharmaceutical sector, and for that sector to remain a world leader in innovation and manufacturing. While SPCs are granted without any condition regarding the place where the protected medicine is to be developed and manufactured, we have found examples of SPCs supporting manufacturing location decisions.

“The SPC system has supported major technical developments in the pharmaceutical and PPP fields that have emerged since 1992, such as biotechnology techniques. However, as the SPC is an incentive based on extending a period of exclusivity of sales, the current SPC regime is not expected to be efficient in encouraging research in areas with low commercial viability, such as medicines for orphan and paediatric conditions,” ​noted the Commission.

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