The revision of EU-“Bolar Exemption“ under the draft EU Pharmaceutical Package

Harmonization requirements due to the current “Bolar Exemption”-rule under EU law

As part of its draft of an EU Pharmaceutical Package, the European legislator is seeking to amend the so-called "Bolar Exemption" that applies during patent or Supplementary Protection Certificate (“SPC”) protection of the reference medicinal product for human use.

This amended “Bolar Exemption” is drafted in Article 85 of the “Proposal for a Directive of the European Parliament and of the Council on the Union code relating to medicinal products for human use, and repealing Directive 2001/83/EC and Directive 2009/35/EC” of 26 April 2023 (COM(2023) 192 final, 2023/0132 (COD)) (“Draft”). The Draft is subject to the ordinary legislative procedure under Art. 294 TFEU. The Commission submitted the Draft to the European Parliament and Council. At present it is not yet foreseeable when a final version can be expected.

What is the “Bolar Exemption” under current EU law?

The "Bolar Exemption" allows the use of a medicinal product for human use as an exception to patent or SPC-protection. It is named after Roche Products, Inc. v. Bolar Pharmaceutical Co. (U.S. Court of Appeals for the Federal Circuit - 733 F.2d 858 (Fed. Cir. 1984)). The exemption regularly covers the conduct of certain activities in preparation for regulatory marketing approval of drugs, allowing especially generic manufacturers to develop generic drugs before the patent or SPC expires.

Currently the “Bolar Exemption” is implemented into EU law by Art. 10(6) of the Community code relating to medicinal products for human use (Directive 2001/83/EC – as amended by Directive 2004/27/EC) and Art. 41 of the Regulation on veterinary medicinal products (Regulation (EU) 2019/6). The overriding objective of the “Bolar Exemption” according to the European legislator is to promote affordability of medicinal products and patient access by increasing competition through facilitating an early market entry ofmedicinal products (cf. recital 14 of the Directive 2001/83/EC – as amended by Directive 2004/27/EC):

Art. 10(6) of Directive 2001/83/EC permits applicants for a marketing authorization of medicinal products during the term of protection of the patent or SPC to conduct studies, trials and the consequential practical requirements which are necessary to obtain the respective regulatory approval. Therefore, these conducts are not considered as patent or SPC infringement.

What will be new for “Bolar Exemption” under the draft of the EU Pharmaceutical Package?

The European legislator identified in principle three gaps of regulatory aspects which conflict with the regulatory objective at the legal and legal application level:

First, the scope of application is considered to be too narrow, due to the inconsistent application of the “Bolar Exemption” within the EU by its Member States. Therefore, the Draft proposes to significantly extent the scope of application of the exemption with respect to the group of benificiaries and their exempted activities (cf. also Explanatory Memomarandum, p. 17 and rec. 63 et seq. of the Draft). Not only studies and trials to studies, trials and the consequential practical requirements which are necessary to obtain the marketing authorization will be exempted, but also those necessary for the obtention of health technology assessment and pricing and reimbursement.

Second, in addition to the current exemption related to activities to obtain a generic or biosimilar drug, the proposed exemption aims to allow also the conduct of studies, trials, and other activities to obtain data for hybrid or biohybrid drugs and subsequent variants. Also, activities for health technology assessments and pricing and reimbursement procedures are explicitly included in the exemption – a clarification with respect to the current regulation of consequential practical requirements.

Third, the Draft also provides clarity regarding its application to commercial suppliers of active pharmaceutical ingredients when they supply medicinal products protected by a patent or SPC to generic manufacturers to conduct studies to obtain marketing approval. These third-party suppliers and service providers are now explicitly covered:

Article 85

Exemption to the protection of intellectual property rights

Patent rights, or supplementary protection certificates under the [Regulation (EC) No 469/2009 - OP please replace reference by new instrument when adopted] shall not be regarded as infringed when a reference medicinal product is used for the purposes of:

(a) studies, trials and other activities conducted to generate data for an application, for:

(i) a marketing authorisation of generic, biosimilar, hybrid or bio-hybrid medicinal products and for subsequent variations;

(ii) health technology assessment as defined in Regulation (EU) 2021/2282;

(iii) pricing and reimbursement.

(b) the activities conducted exclusively for the purposes set out in point (a), may cover the submission of the application for a marketing authorisation and the offer, manufacture, sale, supply, storage, import, use and purchase of patented medicinal products or processes, including by third party suppliers and service providers.

This exception shall not cover the placing on the market of the medicinal products resulting from such activities.

Our assessment

In line with the EU’s aim to incentivize manufacture and supply of medicines in the EU, the Draft acknowledges the practical realities of the generic pharmaceutical industry since supply of active pharmaceutical ingredients by third parties is usually necessary. The question of whether third party supply is exempted and if this would be the case, under which conditions, was subject of proceedings before the Düsseldorf Court of Appeals (Cf. Düsseldorf Court of Appeals, Decision of 5 December 2013, case no: I-2 U 68/12, only German), which referred these questions to the Court of Justice of the European Union (“CJEU”). However, no clarification was provided by the CJEU, following the withdrawal of the complaint by the patentee. The EU Pharma package now gives a clear answer to the first question but it remains unclear under which conditions third party supply is exempted. The Düsseldorf Court of Appeals applied a rather strict standard at the time by generally requiring the third party to take precautions to effectively counteract any unlawful use of the provided active ingredient outside of a privileged approval procedure, such as a use agreement including clear guarantees and contractual penalties in case of contravention from both parties. So there remain uncertainties that will have to be decided by the CJEU in the end.

What does it mean for the UPC?

Art. 27(d) of the UPC Agreement (“UPCA”) provides that the rights conferred by a patent shall not extend to the acts allowed pursuant Art. 10(6) of Directive 2001/83/EC. According to Art. 217(3) of the Draft, “[r]eferences to the repealed Directives 2001/83/EC […] shall be construed as references to this Directive”. Therefore, Art. 27(d) of the UPCA will refer to Art. 85 of the Draft once it will enter into force (cf. in the policy area of veterinary medicines: Art. 149, 41 of Regulation (EU) 2019/6 of the European Parliament and of the Council of 11 December 2018 on veterinary medicinal products in connection with Art. 27(d) UPCA). Eventually, there will be a more harmonized application of the “Bolar Exemption” as explained above also under the UPC, with the CJEU as ultimate decision-making authority.

For further questions please ask our experts

Dr. Damian Roscher, LL.M.

Dr. Anja Lunze, LL.M.

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