New EU pharmaceutical legislative changes were proposed in April 2023. Further changes approved in April 2024 lessen the impact on regulatory exclusivity periods, but significantly extend the Bolar exemption – a patent law exemption encouraging generic medicine manufacturing. It is unlikely that the new Bolar provisions are compliant with the WTO’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement.

Changes to regulatory exclusivity periods for innovative medicinal products

As drafted, the new directive reduced data exclusivity for patent holders from eight years to six years, with options for some additional exclusivity – although this would be difficult.

The amended version sets a 7.5-year period for data exclusivity, with extensions available for:

• products addressing an unmet medical need;
• new active substances where the clinical trials supporting authorisation use a relevant comparator; and,
• products developed in collaboration with public entities.

Total data exclusivity may not exceed 8.5 years. In addition, as at present, two years of market protection is available to patent holders. The changes balance what would otherwise have been a major shift in EU law in favour of generics.

Changes to the Bolar exemption

The new directive aimed to clarify the scope of the Bolar exemption and harmonise its application across Europe, for example by providing security for suppliers of patented products for use in generic clinical trials. Differences in Bolar provision application in different countries could be resolved by judicial harmonisation, rather than further legislation.

Nevertheless, the EU Parliament has approved major changes to the proposed Bolar provisions. Those changes extend the exemption to innovative products which happen to fall within the scope of pending patents. The changes also fail to clearly state that the safe harbour only applies to activities carried out in pursuit of authorisation.

The Bolar provision does not expressly forbid a party from offering to sell patented medicinal products. Neither does it expressly prevent a party from placing medicinal products on the market after patent expiry, if those products were made, stored and/or offered for sale during a lawful term of protection. It appears that the Bolar exemption will have a significantly wider scope under the new directive, to the benefit of generics.

Is the new Bolar exemption compliant with the WTO’s TRIPS agreement?

Article 30 of the TRIPS agreement provides limited powers to implement exceptions to the exclusive rights conferred by a patent, as addressed by the WTO in Canada vs European Commission. In that case, an exemption for acts carried out solely for the purpose of seeking regulatory authorisation was deemed permissible, but that the exemption of commercial acts (such as stockpiling) was not.

The new directive is intended to permit “the timely market entry of medicinal products, in particular the market entry of generics and biosimilars on day one of loss of the patent or SPC protection”. To that end, a broad range of acts for obtaining pricing and reimbursement approval is allowed. Obtaining such approval can represent an offer to sell a medicinal product, which arguably breaches Article 30 TRIPS for the same reasons as stockpiling.

Conclusions

The EU Parliament has dialled back the heavily pro-generic stance on regulatory exclusivity. The changes made to the Bolar exemption, however, swings the pendulum firmly back in favour of generics. Not only may innovative products fall within the Bolar exemption, but the directive lacks clarity about which commercial activities would be exempted.

The new directive is arguably not TRIPS compliant with regard to its potential for stockpiling and pricing and reimbursement activities. Overall, while the balance has shifted, the new directive still weakens the protections currently afforded to the innovator pharmaceutical industry.

Stephen Garner is a partner and European patent litigator at Mathys & Squire.