The European Commission

Study on the economic impact of supplementary protection certificates, pharmaceutical incentives and rewards in Europe

In April 2017 the European Commission awarded Copenhagen Economics the task of carrying out the study entitled ‘Study on the economic impact of supplementary protection certificates, pharmaceutical incentives and rewards in Europe’ (call for tender 590/PP/GRO/SME/16/F/121).

This report represents the results of the study. 

Two recent events prompted the need for the study as spelled out in the tender specifications. 

First, the European Commission Single Market Strategy of October 2015 had identified a need to “…consolidate and modernise the intellectual property (IP) rights as a way to stimulate innovation and growth within the European Union and to engage in a reflection on ways to improve the patent system in Europe…for pharmaceuticals…”. 

Second, Council Conclusions of 17 June 2016, invited the Commission to prepare an analysis of the impact of the pharmaceutical incentives and rewards on innovation, availability and accessibility of medicinal products.

Abstract of the study:

In this study, we utilise a unique, new dataset to assess the economic impact of supplementary protection certificates (SPC’s) and the pharmaceutical incentives and rewards in the EU. We develop a measure called the ‘Effective protection period’. It reflects the time that elapses from a medicinal product obtains a marketing authorisation until the last measure of protection on it expires; this could be the original patent, an SPC or one of the other incentives and rewards in the pharmaceutical legislation.

We find that 45% of the medicinal products in our dataset have obtained an SPC in at least one of the European countries. We find that the SPC has added years to the effective protection period for those innovator products where the SPC is the last measure of protection to expire. While the protection for medicinal products in the EU is amongst the strongest in the world, we find that for the medicinal products in our dataset the average effective protection period has decreased by approximately two years from 15 to 13 years since 1996 (with variations in individual cases).

We find that a longer effective protection period stimulates research and development into new medicinal products. We also find that it delays an average price drop of approximately 50 pct. following the entry of generics.

We find that companies choose to launch more medicinal products faster in larger and wealthier countries. Hence, not all new products are made available in all European countries and not at the same time.

The study is commissioned by The European Commission

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