The latest draft pharmaceutical legislation published by the European Commission (“Commission”) is set to shake up the regulatory exclusivity protections available to innovator pharmaceutical companies operating in the EU (as discussed in further in our previous blog). As part of these developments, the Commission has clarified the concept of the Bolar exemption under EU law, which broadly is an exemption for generic/biosimilar manufacturers to make use of the patent rights underlying an innovative medicinal product when preparing a corresponding generic/biosimilar marketing authorization application. These changes will be of particular interest to patent right holders for innovative medicinal products and generic/biosimilar pharmaceutical companies alike.

Background

The so called ‘Bolar exemption’ (inspired by the principle established in the U.S. case of Roche v Bolar) provides that conducting the necessary studies and trials in connection with a marketing authorization application for a generic/biosimilar, or hybrid generic/biosimilar medicinal product (“Generic/Biosimilar Product”), and any consequential practical requirements thereof, shall not be regarded as an infringement of relevant patent rights. This generally includes any studies, tests and trials carried out to show that a Generic/Biosimilar Product is bioequivalent to an approved, patented product, where these acts are required under the relevant Generic/Biosimilar Product marketing authorization application.

In the EU, this principle is currently set out under Article 10(6) of Directive 2001/83/EC, which states that “conducting the necessary studies and trials with a view to [preparing Generic/Biosimilar Product marketing authorization applications] and the consequential practical requirements shall not be regarded as contrary to patent rights or to supplementary protection certificates [(“SPCs”)] for medicinal products.” This principle is implemented on a Member State by Member State basis under national laws. The remit of Directive 2001/83/EC is restricted to the regulation of medicinal products, however Article 10(6) has been implemented in Member States (such as the UK under section 60(6D) of the Patents Act 1977, prior to its departure from the EU) to cover activities related to pricing and reimbursement issues for Generic/Biosimilar Products. The Commission’s new draft Directive (the “Directive”) confirms in its recitals that the current Bolar exemption is “fragmented across the Union and it is considered necessary, in order to facilitate the market entry of generic, biosimilar, hybrid and bio-hybrid medicinal products, to clarify its scope in order to ensure a harmonised application in all Member States, both in terms of beneficiaries and in terms of activities covered.

Proposed Changes to the Bolar Exemption

The Directive seeks to provide additional clarity regarding the scope of the Bolar exemption in the EU.  Article 85 clarifies that the following activities shall not be regarded as infringement of patent rights or SPCs:

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

  1. a marketing authorisation of generic, biosimilar, hybrid or bio-hybrid medicinal products and for subsequent variations;
  2. health technology assessment as defined in Regulation (EU) 2021/2282;
  3. 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.

Notably, health technology assessments, including pricing and reimbursement activities, are now expressly addressed under the language in Article 85 by reference to the new Health Technology Assessment Regulation (EU) 2021/2282 (which is due to come into force in 2025). This language is clearer than the ambiguous concept of “consequential practical requirements” in the current EU Bolar exemption language.

We further note that section b) described above expressly expands the concept of the Bolar exemption to include third party suppliers and service providers for the first time. This clarification may provide comfort for the CMOs of generic/biosimilar pharmaceutical companies who manufacture investigational medicinal products that are subject to third party patent rights. At the same time, this expansion may cause some concern for innovator pharmaceutical companies. However, the Directive is clear that the Bolar exemption “shall not cover the placing on the market of the medicinal products resulting from such [exempted] activities”.  The recitals of the Directive provide further background information regarding the intended scope of the updated Bolar exemption and state:

The [Bolar] exemption must be confined to conduct studies and trials and other activities needed for the regulatory approval process, health technology assessment and pricing reimbursement request, even though this may require substantial amounts of test production to demonstrate reliable manufacturing.  During the term of protection of the patent or SPC of the reference medicinal product, there can be no commercial use of the resulting final medicinal products obtained for the purposes of the regulatory approval process.

It will allow, inter alia, to conduct studies to support pricing and reimbursement as well as the manufacture or purchase of patent protected active substances for the purpose of seeking marketing authorisations during that period, contributing to the market entry of generics and biosimilars on day one of loss of the patent or SPC protection.

On the whole, these changes strike a balance between providing further certainty for generic/biosimilar pharmaceutical companies who wish to bring new Generic/Biosimilar Products to the market, and respecting the crucial intellectual property rights of innovator pharmaceutical companies.

This blog is based on the wording of the EU’s proposal published on 26 April 2023. This wording could significantly change during the legislative process. Our Dublin, Brussels, Frankfurt and London teams will continue to monitor this legislation. We will be hosting a webinar to discuss the impact on 9 May. To sign up for the webinar please click here.

Photo of Robin Blaney Robin Blaney

Robin Blaney is a partner in the firm’s Life Sciences practice. He advises pharmaceutical, biotechnology, medical device and cosmetic manufacturers and trade associations on a wide range of regulatory, compliance, transactional and legislative matters, as well as the full range of commercial agreements…

Robin Blaney is a partner in the firm’s Life Sciences practice. He advises pharmaceutical, biotechnology, medical device and cosmetic manufacturers and trade associations on a wide range of regulatory, compliance, transactional and legislative matters, as well as the full range of commercial agreements that span the product life-cycle in the life sciences sector. His expertise includes clinical trial agreements, manufacturing and supply agreements, distribution and other marketing agreements, regulatory services agreements, and tenders. He has particular experience structuring and documenting EU pharmaceutical distribution arrangements and transitional arrangements relating to product acquisitions. Robin writes and speaks regularly on subjects such as medical device regulation, pharmacovigilance and clinical trials.

Photo of Roderick Dirkzwager Roderick Dirkzwager

Roderick Dirkzwager advises clients in the life sciences sector on a broad range of regulatory, transactional and intellectual property matters relating to the discovery, development and commercialization of their products.

Roderick is a member of Covington’s Diversity and Inclusion Committee and is a…

Roderick Dirkzwager advises clients in the life sciences sector on a broad range of regulatory, transactional and intellectual property matters relating to the discovery, development and commercialization of their products.

Roderick is a member of Covington’s Diversity and Inclusion Committee and is a co-lead of the LGBT+ Affinity Group in London.

With a broad life sciences practice, Roderick regularly advises on:

  • EU, Irish, and UK regulatory issues relating to pharmaceutical products, medical devices and consumer products;
  • commercial agreements that span the product life-cycle in the life sciences sector, including collaborations and other strategic agreements, clinical trial agreements, distribution arrangements and manufacturing and supply contracts;
  • regulatory and commercial due diligence for life sciences transactions; and
  • intellectual property issues arising in corporate transactions and IP-related contracts.

Prior to joining the firm, Roderick completed his Ph.D. in Biochemistry, focusing on the development of novel, low-cost malaria diagnostic technologies using DNA aptamers.