SPC manufacturing waiver (Part 2): The fairy tale of day-1 entry under the manufacturing and stockpiling waiver – a German view

As indicated in the June 2019 edition of Synapse, the Regulation (EU) 2019/933 (MW-Regulation) amending the SPC Regulation EC/469/2009 to introduce a manufacturing and stockpiling waiver for EU-based generic and biosimilar manufacturers entered into force on 1 July 2019.

According to recital 8, the MW-Regulation aims to promote the competitiveness of the Union, amongst other things by allowing makers:

"to make and store products, or medicinal products containing those products, in a Member State for a defined period pending the expiry of the certificate, for the purpose of entering the market of any Member State upon expiry of the corresponding certificate, thereby helping those makers to compete effectively in the Unionimmediately after protection has expired ('EU day-one entry')." (emphasis added)

Accordingly, the MW-Regulation privileges amongst others the following activities as not patent infringing:

• the making, no earlier than six months before the expiry of the certificate, of a product, or a medicinal product containing that product, for the purpose of storing it in the Member State of making, in order to place that product, or a medicinal product containing that product, on the market of Member States after the expiry of the corresponding certificate, or
• any related act that is strictly necessary for the making, in the Union, referred to in above or for the actual storing, provided that such related act is carried out no earlier than six months before the expiry of the certificate.

But is it enough to privilege the manufacture and storage of a corresponding product in the Union in the six months preceding the expiry of the SPC to achieve a day-1 entry?

On the one hand, there are the purely factual considerations. Although the vast majority of products may be manufactured within six months, there are also numerous more complex products, in particular biologic products and biosimilars for which manufacture within the six month period will be very challenging.

Given that the MW-Regulation explicitly intends to promote biosimilar manufacture in the European Union according to Recital 8, it is surprising that the privileged time window is so short. For these more complex products, manufacturing within the Union is unlikely to be an option due to the relatively short time window provided by the MW-Regulation.

Regarding Germany, the placing on the market of a finished medicinal product requires, inter alia, that the product be notified to the competent body as 'marketable'. As part of the master data, this notification is forwarded to lists of medicinal products authorised for sale in Germany, which in particular serve pharmacists as merchandise management systems.

In other words, before a finished medicinal product appears in said merchandise management systems, it at least practically cannot be sold in Germany.

Said notifications, as well as the respective lists, are only published or made available twice a month, namely on the 1st and 15th of each month. In other words, pharmacists are informed on the 1st and 15th of every month whether new products are available.

Following the Federal Supreme Court decision on "Simvastatin" (Federal Supreme Court, decision dated 5 December 2006, docket no. X ZR 76/05), German infringement courts in general classify appearance on a corresponding list before expiry of the underlying patent or SPC as a patent infringing offer, no matter whether a day-1 entry of the product after expiry of the respective patent/SPC is only possible if the new product is listed in advance because the next listing possibility exists only after patent/SPC expiry. The seller must therefore decide whether he accepts to take the risk of an injunction if he lists his product in such a way that a day-1 entry is possible.

As the listing requirement equally affects sellers from third countries as well as those from the Union, it is not to be expected that the German infringement courts will, in view of the MW-Regulation, give up their practice of treating the listing of a counterfeit product prior to patent or SPC expiry as a patent infringing offer. The day-1 entry targeted by the MW-Regulation thus remains either unattained or associated with a significant injunction risk for the generic seller, at least with regard to Germany and the listing requirement there.

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Please click here to read the original article: SPC manufacturing waiver (Part 2): The fairy tale of day-1 entry under the manufacturing and stockpiling waiver – a German view