February 2025

by Ileana Nicolescu and Jasmine Botiș

A cornerstone provision in pharmaceutical law, the Bolar Exemption allows the conduct of studies and trials for the purpose of obtaining regulatory approvals, without infringing the patent or supplementary protection certificate (SPC) holder’s rights. Originating in the United States, it has since been incorporated into European law as a mechanism to balance the protection of intellectual property with the need to ensure timely access to affordable medicines, particularly generics and biosimilars.

The Origins and Function of the Bolar Exemption

Introduced In the U.S. under the Hatch-Waxman Act of 1984[1], the Bolar Exemption was designed to enable medicines manufacturers to rely on patented products when conducting the necessary tests and studies for the purposes of obtaining the regulatory approvals from the U.S. Food and Drug Administration (FDA). This exemption was a direct response to the Roche v. Bolar case[2], where the court ruled that using a patented medicine upon conducting the tests for regulatory approvals for the generic version product constituted patent infringement. The ruling underscored the need for a legal framework to balance patent protection with generic drug availability.

Shortly after Roche v. Bolar, Congress passed the Hatch-Waxman Act, introducing the Bolar Exemption to allow the use of patented products in FDA approval experiments.

This exemption aimed to prevent patent holders from delaying generic market entry after patent or SPC expiration by impeding generic companies from conducting the necessary clinical tests and trials while the patent or SPC was still in force.

The exemption was later adopted into European legislation following the introduction of Article 10(6) of Directive 2001/83/EC of the European Parliament and of the Council of 6 November 2001 on the Community code relating to medicinal products for human use (Directive 2001/83/EC)[3], which regulates the marketing of human medicines in the European Union. The article allows for the use of patented medicines for studies and trial purposes, particularly for obtaining marketing authorization for generics and biosimilars. This ensures that generics and biosimilars can reach the market as soon as the patent or, if applicable, SPC expire, thereby enhancing competition and improving access to more affordable medicines.

Scope and Application of the Bolar Exemption in the European Union

While the Bolar Exemption is acknowledged across the European Union, its application varies significantly from country to country. Some member states offer broader interpretations of the exemption, by allowing studies and trials for a wide range of pharmaceutical products or by allowing the activities leading to obtaining pricing and reimbursement, while others limit it strictly to generics and biosimilars intended for marketing authorization within the EU.

The provision primarily allows generics and biosimilars manufacturers to carry out clinical trials, bioequivalence studies, and other essential research without facing legal challenges from patent holders.

However, the exemption’s application has been the subject of legal debates, particularly regarding which activities and actors can benefit from it. While the exemption applies to the direct development by the manufacturer of generics and biosimilars, there are uncertainties about whether third-party service providers, such as contract manufacturers or contract research organizations (CROs), can benefit from the exemption when conducting research on behalf of generic manufacturers. Similarly, member states have varying interpretations of whether the exemption covers the pricing and reimbursement process.

In Romania, the practical application of the Bolar Exemption faces challenges due to varying judicial interpretations, particularly regarding its extension to activities like pricing and reimbursement or the inclusion of hybrid and bio-hybrid medicines. While the exemption facilitates the preparation of generics and biosimilars for market entry, the absence of detailed national guidelines leaves key aspects open to dispute, highlighting the pressing need for clearer legal and procedural framework.

The general Romanian legal framework on healthcare (i.e., Law no. 95/2006 on healthcare reform) transposes the Bolar Exemption in alignment with Article 10(6) of Directive 2001/83/EC, focusing solely on permitting the necessary tests and studies for generics and biosimilars, without this being considered as infringing patent or SPC rights.

Further supporting this framework, Romania’s patent legislation also includes specific provisions that align with the principles of the Bolar Exemption. The patent law and its implementing regulations explicitly state that conducting tests and studies required for obtaining marketing authorization does not constitute patent infringement. Additionally, the legislation allows for the use of patented inventions for research, development, and educational purposes, provided these activities remain strictly non-commercial.

National case law confirms that obtaining a marketing authorization for a generic or biosimilar using the results of the clinical studies of the innovator does not constitute patent infringement, thereby providing additional clarity and support for generics and biosimilars as they prepare for market entry.

On the contrary, in relation to obtaining a pricing & reimbursement decision, the case-law is not consistent. Thus, in 2021, in a preliminary injunction concerning the medicine called Sorafenib, the court found that obtaining a price decision from the Ministry of Health was not an (imminent) act of infringement. However, multiple earlier decisions issued by the Romanian courts expressly qualified that obtaining a price decision is an infringement act and does not fall within the Bolar exemption.

The recent amendments brought to the Romanian legal framework on pricing of medicinal products, while not stating it explicitly, seem to imply that generic or biosimilar should be placed on the market upon or shortly after obtaining a price decision, which, in terms of intellectual property rights, could be an infringement of patent or SPC rights. There is no current case-law tackling the subject of whether amendments exclude the pricing and reimbursement process from the Bolar Exemption.

Moreover, there is no specific guidance in Romanian legislation on whether hybrid or bio-hybrid medicines fall under the exemption, leaving these aspects open to judicial interpretation. As a result, stakeholders often face uncertainty when navigating the boundaries of the Bolar Exemption in Romania, particularly in light of the proposed harmonization efforts at the EU level.

The April 2023 EU Draft Proposal: A Step Towards Harmonization

On April 26, 2023, the European Commission released a draft proposal as part of the EU Pharmaceutical Package. The proposed revisions to the Bolar Exemption are included in the Proposal for a Directive of the European Parliament and of the Council on the Union ode relating to medicinal products for human use, and repealing Directive 2001/83/EC and Directive 2009/35/EC (Procedure 2023/0132) and aim to expand its scope and clarify its application to ensure that generics, biosimilars, hybrid, and bio-hybrid products can benefit from the exemption to a greater extent. This proposal is a response to industry concerns over the varying interpretations of the exemption across member states, and it seeks to establish a more harmonized and transparent framework within the EU.

The key change proposed in the draft is a broader application of the exemption to expressly include not just generics and biosimilars, but also hybrid and bio-hybrid medicines. Hybrid medicines are those that are similar to an authorised medicine containing the same active substance, but where there are certain differences between the two medicines such as in their strength, indication or pharmaceutical form. Bio-hybrids refer to a combination of biologic and non-biologic products. The inclusion of these products is significant as it acknowledges the evolving landscape of pharmaceutical innovation, where new types of medicines are becoming increasingly common.

The proposal also seeks to include research activities related to health technology assessments (HTA) and pricing and reimbursement procedures under the Bolar Exemption. In some member states (including Romania, as showed by some older court decisions before Romanian Courts), these assessments were interpreted as being outside the scope of the exemption, as they were considered not to be directly linked to regulatory approval. By extending the exemption to expressly include HTA and pricing-related research, the European Commission aims to streamline the regulatory process and promote quicker market entry for generics and biosimilars once a patent expires.

Moreover, the draft proposal clarifies that certain steps undertaken by third-party providers assisting in the regulatory approvals, such as contract manufacturers and CROs, will also benefit from the exemption. This is an important clarification for the industry, as many generic and biosimilar manufacturers rely on third-party services for the development of investigational medicinal products.

It is worth noting that not all proposals in the EU Pharmaceutical Package were embraced by the European Parliament. Certain provisions seeking to broaden regulatory flexibility and to introduce procedural adjustments were rejected, highlighting the complexity of achieving consensus on balancing innovation with effective and harmonized implementation across Member States. The negotiations on this matter will continue until a consensus is found.

Remaining Questions and Potential Impacts on the Industry

While the proposed changes represent a step forward in the modernization and harmonization of the Bolar Exemption and could be seen as detrimental to patent or SPC holders, the proposed regulation remains consistent when it comes to the Bolar Exemption: it does not allow for the commercial sale of the medicines resulting from the studies and trials while a patent or SPC is in force and before the expiry of the market exclusivity. Therefore, the expansion of the Bolar Exemption appears to only determine a stronger competition for patent or SPC holders instantly after their rights lapse, without however creating the possibility for competitor companies to enter the market with the products before that moment.

Additionally, the harmonization of the Bolar Exemption will still require national governments to implement the changes into their own legal frameworks. The proposal included in a Directive draft aims to create a uniform approach, but differences in how national courts and regulators interpret and apply the exemption could still lead to discrepancies between countries.

Conclusion: Work in Progress

The Bolar Exemption continues to play a pivotal role in ensuring that affordable medicines can enter the market in a timely manner, fostering competition and improving access to affordable treatments. The proposed changes in the European Commission’s draft 2023 proposal demonstrate a clear intent to harmonize and modernize the exemption, ensuring that generics, biosimilars, and even newer forms of hybrid and bio-hybrid medicines can be developed and become available to the public as soon as patent or SPC rights lapse.

However, the process of reaching the final form of new Directive is still in progress, and industry stakeholders will need to closely monitor the developments in the European Parliament and the Council. As the pharmaceutical landscape continues to evolve, the European lawmakers must carefully update the scope of the Bolar Exemption to ensure balance between incentivizing innovation through patent protection and ensuring that patients have access to affordable alternatives in a reasonable timeframe.

In the meantime, the Romanian market remains subject to different approaches and, therefore, opportunities and challenges since the interpretation of the Bolar Exemption is not yet consistent.

Given this evolving landscape, a careful and well-informed assessment of each specific scenario is essential to navigate regulatory uncertainties and develop a robust legal strategy, ensuring compliance while maximizing market entry opportunities.

[1] Available at the following link: https://www.congress.gov/bill/98th-congress/house-bill/3605

[2] Available at the following link: https://law.justia.com/cases/federal/appellate-courts/F2/733/858/459501/

[3] Available at the following link: https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2001:311:0067:0128:en:PDF