Parallel import licences to continue after withdrawal of reference product marketing authorisation

Recent European Court rulings in two very similar cases spell the end of the automatic lapse of parallel import licences on the withdrawal of the marketing authorisation for the reference medicine, except where the withdrawal is on the grounds of risk to the health of humans from the continued existence of that medicinal product on the market of the importing Member State (or as otherwise allowed by Article 30 of the Treaty of Rome).

The exact wording of the ruling in both cases was as follows:

"Article 28 EC and Article 30 EC preclude national legislation under which the withdrawal, at the request of its holder, of the marketing authorisation of reference of itself entails the withdrawal of the parallel import licence granted for the medicinal product in question. However, those provisions do not preclude restrictions on parallel imports of the medicinal product in question if there is in fact a risk to the health of humans as a result of the continued existence of that medicinal product on the marketing of the importing Member State."

The two cases concerned the drug Losec, which is used to treat conditions caused by stomach acid. Sweden and Finland both referred questions to the European Court for a ruling. Losec was on the market in capsule form throughout Europe and was being parallel imported from other European countries directly into Finland and Sweden. The parallel import licences in the countries concerned had originally been issued on the basis of the product being sufficiently similar to be considered identical to one which was already covered by a marketing authorisation in that country of export. As is the case in most European countries, withdrawal of the marketing authorisation for the reference medicine meant the automatic withdrawal or suspension of the marketing authorisation for the parallel import. The marketing authorisation holders of the reference medicine in both countries requested the withdrawal of the authorisation when they replaced it with a tablet form, which was easier to manufacture than the capsule form.

Important relevant facts in both cases were as follows:

• the parallel import licence for the capsules (the old version of the medicinal product) was issued by reference to the marketing authorisation granted by the national authorities for that same medicinal product;
• that marketing authorisation for the reference product was withdrawn at the request of its holder for reasons unconnected with the safety of the product;
• that holder obtained a marketing authorisation for a new variant of that medicinal product;
• the old version of the medicinal product is still marketed legally in other Member States under marketing authorisations which have not been revoked;
• the two versions of Losec are therapeutic equivalents;
• no reason was put before the Court to justify why the mere fact that a marketing authorisation of reference was withdrawn at the request of its holder should entail the automatic withdrawal of the parallel import licence issued for the medicinal product in question.

The reasoning of the Court can be summarised as follows:

1. The cessation of validity of a parallel import licence following the withdrawal of the marketing authorisation of reference constitutes a restriction on the free movement of goods contrary to Article 28 EC (Case C-172/00 Ferring [2002] ECR I-6891, paragraph 33).
2. Such a restriction may be justified by reasons relating to the protection of public health (inter alia), in accordance with the provisions of Article 30 EC.
3. The restrictions must, however, not constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States and, therefore, national legislation or practice cannot benefit from the derogation laid down in Article 30 EC when the health and life of humans can be protected equally effectively by measures less restrictive of intra-Community free trade.
4. No reasons were put before the Court to justify the restrictions, the withdrawal of the marketing authorisation of reference does not mean in itself that the quality, efficacy and non-toxicity of the old version is called into question (and it continues to be legally marketed in other Member States under the marketing authorisation issued in that State) and it appears that the health and life of humans can be protected equally effectively by measures less restrictive of intra-Community free trade than the automatic cessation of the validity of the parallel import licence.

Despite these conclusions, the Court noted that it cannot be ruled out that there are reasons relating to the protection of public health which require a parallel import licence for medicinal products to be linked to a marketing authorisation of reference or that there will be reasons, in specific circumstances, relating to the protection of public health which could justify the withdrawal of the parallel import licence. For example, the Court has held in Ferring that such reasons could arise where there is in fact a risk to public health arising from the coexistence of two versions of the same medicinal product on the market of the importing Member State.

Pharmaceutical companies will need to factor into their research, product development, marketing and business plans a consideration of the effects of these rulings, particularly a consideration of whether there would be any implications for human health of having both a new medicine and a parallel imported product on the market at the same time and also, whether withdrawal of the old product version should where possible and appropriate be carried out simultaneously in all jurisdictions.

The two cases were Paranova Oy v Högsta förvaltningsdomstolen (Finland) (Case C-113/01) and Paranova and others v Regeringsträtten (Sweden) (Case C-15/01). The full text of the judgments can be found at http://curia.eu.int by reference to the case numbers.

For advice on the implications of these decisions or for further information, please contact:

Zelda Pickup
CMS Cameron McKenna
T: +44 (0) 20 7367 2043
zelda.pickup@cms-cmck.com

Natalie Wood
CMS Cameron McKenna
T: +44 (0) 20 7367 2523
natalie.wood@cms-cmck.com