Bolar exemption update will harmonise EU-wide pharma law interpretation

On 26 April 2023, the European Commission put forward a legislative package aimed at revising and replacing existing pharmaceutical legislation. Among the objectives is the continued offering of an attractive and innovation friendly framework for research and development and production of medicines in the EU.

Included in the package is a draft Directive (2023/0132 (COD)) which proposes to revise the Bolar exemption with the aim of harmonising the application of the exemption across member states. 

The Bolar exemption allows the use of patented medicinal products in studies and trials before the expiration of the patent or supplementary protection certificate (SPC) for the purpose of obtaining market authorisation. This is an exception to what would otherwise be considered a patent infringement. Its aim is to facilitate the entry of generic medicinal products into the market as soon as possible after the expiration of the patent or SPC, which in turn promotes increased competition, as well as affordability and accessibility of medicinal products in the market.

The Bolar exemption is implemented into EU law by way of article 10(6) of Directive 2001/83/EC, as amended by Directive 2004/27/EC.

The effect of article 10(6) is to allow for studies and trials to be carried out for the purpose of an abridged application for marketing authorisation for a generic or biosimilar product without this amounting to patent or SPC infringement.

The implementation and interpretation of article 10(6) and the Bolar exemption, however, has varied across member states, with some adopting a broader exemption than others.  This has led to uncertainty for innovator and generic manufacturers and has resulted in some member states being more attractive locations than others for manufacturers. By way of example, Ireland, Poland, Denmark and France have extended the scope of the exemption to innovative products. Further, Ireland, Germany, Poland and Denmark have extended the exemption to cover applications for marketing authorisations outside of the EU.

In the recitals of the draft Directive, the Commission said that the application of the exemption across member states has been fragmented, and that the clarification of its scope is necessary to ensure harmonised application.

The update would revise the scope of the Bolar exemption to expressly include studies, trials and other activities conducted for the purpose of obtaining a marketing authorisation and subsequent variations, conducting a health technology assessment (HTA), obtaining pricing and reimbursement approach, and the subsequent practical requirements associated with such activities.

While pricing and reimbursement activities already fell within the scope of the exemption in some member states, their express inclusion in the draft, along with HTAs, is an important change from the Directive currently in force. This highlights the Commission’s objective to harmonise the application of the exemption across the EU.

The draft, in its current form, also provides that the activities conducted shall cover, in addition to the submission of an application for marketing authorisation, “the offer, manufacture, sale, supply, storage, import, use and purchase of patented medicinal products or processes, including by third party suppliers and service providers”.

As is clear from the draft text, activities carried out by third party suppliers and service providers fall within the scope of the exemption, which will provide comfort to third party suppliers entering into agreements with generic manufacturers. 

Unsurprisingly, the draft clarifies that the exemption does not cover the placing on the market of the resultant medicinal products.

The draft article does not provide that the exemption is limited to acts carried out in furtherance of an application for marketing authorisation within the EU, therefore opening the possibility that activities carried out for the purpose of a market authorisation application outside the EU would fall within the scope of the exemption. As noted above, some member states, including Ireland, already have extended the scope of the exemption to such applications outside of the EU.

The removal by the European Parliament of reference to generic, biosimilar, hybrid or bio-hybrid medicinal products from the draft article also suggests that innovative products will also fall within the scope of the exemption, which is already the case in Ireland. 

The draft article is subject to ordinary legislative procedure. The first reading of the draft in the European Parliament took place in April.

The existing Bolar exemption, as per article 10(6), was transposed into Irish law by way of SI No. 50/2006, which inserted a new subsection (g) in article 42 of the Patents Act 1992. 

In transposing the Directive, Ireland adopted quite a literal – and narrow – interpretation of the exemption. Concerned that the narrow interpretation of the Bolar exemption in article 42(g) might place companies in Ireland at a competitive disadvantage and might interfere with Ireland’s attractiveness, the scope of the Bolar exemption in Ireland was broadened in 2014 by the Intellectual Property (Miscellaneous Provisions) Act 2014. By inserting a new subsection (h) in article 42 of the 1992 Act, the scope of the exemption was widened to include acts done in conducting studies, tests, experiments and trials, including clinical trials and field trials, with a view to obtaining marketing authorisation outside the EU and for innovative products.

In Ireland, while the draft Directive when transposed will expand the scope of the Bolar exemption in respect of HTA and pricing reimbursement, the scope of the exemption is less impacted insofar as it related to innovative products and third countries.

Given the breadth of the draft Directive, and its importance to stakeholders, it may take some time before it is adopted. The Directive is now with the Council for consideration and the final wording adopted remains to be seen.

Co-written by Laura Finn of Pinsent Masons.