Zammit Dimech steps in to safeguard interests of pharmaceutical sector

"The pharmaceutical industry is an important economic sector for Malta as it generates sustainable economic growth and good jobs which we need to safeguard in all possible ways. Through good co-operation we have managed to safeguard Malta’s pharmaceutical industry following a review of EU regulations concerning pharmaceuticals and the impact which that review would have left on the industry." MEP Francis Zammit Dimech made these remarks after the committee on Legal Affairs adopted the provisional agreement resulting from interinstitutional negotiations on the supplementary protection certificate (SPC) for medicinal products with 24 votes in favour, 1 against and 0 abstentions.

Earlier on, Francis Zammit Dimech had held discussions with the Rapporteur and meetings with officials from the Permanent Representation of Malta to the EU and representatives of Malta Enterprise whom he thanked for their collaboration and support. Zammit Dimech also held a meeting with the European Federation of Pharmaceutical Industries and Associations (EFPIA).

The SPC is a ‘sui generis’ right which intends to partially compensate innovators for the substantial patent time lost during lengthy clinical tests, trials and other regulatory requirements needed to secure approval of a medicine. This right was created to provide the pharmaceutical industry with appropriate incentives to innovate. It ensures protection from unfair competition for a limited period of time allowing companies to sustain investments in research and development. An SPC comes into effect after the corresponding basic patent expires and cannot go beyond five years. Under the current EU scheme, holders of SPCs have the right to prevent third parties from importing or manufacturing the product whilst the SPC is effective.

As part of the Digital Single Market Strategy review, the European Commission proposed the introduction of a manufacturing waiver for export in the SPC regulation allowing generic manufacturers to produce a medicinal product still under SPC protection for export to third countries. The aim is to boost their competitiveness and tackle competitive disadvantages they may face with manufacturers outside the EU in terms of access to export markets. 

Problems with the review emerged when proposals were made to introduce a two-year stockpiling window in the proposal as presented by the Commission allowing production of products for the purposes of placing them on the market of Member States after the expiry of the certificate.  MEP Zammit Dimech opposed the inclusion of stockpiling in line with Malta’s position, as this would further weaken holders’ rights within the EU. MEP Zammit Dimech contributed to restrict the time window from 2 years to 6 months arguing that it is crucial to safeguard EUs’ competitiveness.

Zammit Dimech emphasised: “We need to continue ensuring robust IP protection. Only by doing so will we ensure provision of new medicines to treat diseases, save and lengthen human life. Innovation is crucial for a competitive economy and we need to reinforce it rather than do anything that would weaken it.” He also called for a full assessment of the impact of stockpiling including on R&D investments and jobs, as this remains lacking. Zammit Dimech remarked that innovation is crucial not only for patients to ensure a healthier future but also for Europe’s competitiveness and to tackle societal challenges.

Through an attractive legislative framework, Malta has managed to develop a competitive advantage in the pharmaceutical sector that needs to be safeguarded. The pharmaceutical sector is important for Malta and has contributed to increasing exports both within the EU and to third countries. It also helped to offer new career opportunities to those studying sciences both at MCAST and at the University of Malta.

Zammit Dimech said that this was an example of how reviews of EU law could impact Malta and how the work of MEPs was crucial to ensure that legislation reflects our priorities. Another similar scenario is a report on Company Law adopted last year by the Committee on Legal Affairs. The original legislative text proposed by the European Commission suggested that cross-border conversion of companies was to be prohibited by competent authorities if this was an arrangement aimed to obtain “undue tax advantages. Zammit Dimech tabled amendments and obtained consensus from the other political groups to ensure that the text which relates to taxation issues be deleted in order to ensure that all taxation issues remain within each country’s national competence.

Zammit Dimech urged the government to invest further in new economic sectors that create high quality jobs and investment. He reiterated his call for further investment in R&D as Malta stands third from last in the EU in this regard.