Insights

On the 25 November 2021, in ‘Delfarma sp.zoo vs. Prezes Urzędu Rejestracji Produktów Leczniczych, Wyrobów Medycznych i Produktów Biobójczych’, the Court of Justice of the European Union (the ‘‘CJEU’’) ruled that the automatic expiration of a parallel import license of a medical product following the lapse of one year from the termination of the marketing authorisation without an assessment of the risks posed to human life and safety, amounts to a restriction on the free movement of goods within the internal market.

By way of background, Delfarma sp.zoo (‘‘Delfarma’’) was in possession of an authorisation granted by the Polish Minister of Health for the parallel importation of the medicinal product Ribomunyl. This license had been granted on the basis of a marketing authorisation for Ribomunyl and the authorisation was extended by the President of the Office for Medical Products, Medical Devices and Biocidal Products, Poland (the ‘‘President of the Office”) on 15 January 2016.

Given that the marketing authorisation expired on 25 September 2018, in terms of Article 21a(3a) of the Ustawa- Prawo framaceutyczne  (Pharmaceutical Law) of 6 September 2001 (the ‘‘Polish Law On Medicinal Products’’), the parallel import license  automatically expired after the lapse of one year from the expiry of the marketing authorisation in the territory of the Republic of Poland, meaning that the President of the Office’s decision was that the parallel import license for Ribomunyl was no longer valid as of the 25 September 2019.

Following the expiration of the marketing authorisation, Delfarma applied for a review, seeking a renewal of the parallel import license. Such renewal was not granted and Delfarma, feeling aggrieved, brought an action against the President of the Office in the Wojewódzki Sąd Administracyjny w Warszawie (Warsaw Voivodeship Administrative Court, Poland) (the ‘‘Referring Court’’) alleging that the automatic expiration by operation of law of a parallel import authorization (at the end of a period of one year from the expiry date of the reference marketing authorisation) violated EU law.

The Referring Court itself, having doubts as to whether such a law is consistent with the freedom of movement of goods as guaranteed under Articles 34 of the Treaty of the Functioning of the European Union (the ‘‘TFEU’’), stayed proceedings and requested the CJEU to offer clarity on the following questions:

1. Does Article 34 TFEU preclude national legislation under which a parallel import licence is to expire after one year from the expiry of the marketing authorisation for the reference medicinal product?
2. In the light of Articles 34 and 36 TFEU, may a national authority adopt a decision of a declaratory nature to the effect that a marketing authorisation for a medicinal product in connection with parallel import is to expire automatically, solely on the ground that the period laid down by law has expired, as from the date on which the marketing authorisation for the reference medicinal product expired, without examining the reasons for the expiry of [the marketing authorisation for] that product or other requirements referred to in Article 36 TFEU relating to the protection of the health and life of humans?
3. Is the fact that parallel importers are exempt from the obligation to submit periodic safety reports, and the authority consequently has no current data on the [risk-benefit balance] of pharmacotherapy, sufficient to adopt a decision of a declaratory nature to the effect that a marketing authorisation for a medicinal product in connection with parallel import is to expire?’

It is important to note that Article 34 TFEU prohibits any quantitative restrictions on imports and holds that, all measures having equivalent effect shall be prohibited between Member States. On the other hand, Article 36 TFEU moves away from this general rule and allows certain derogations to the rule established under Article 34 TFEU, if such prohibitions or restrictions on imports, exports or goods in transit are justified on grounds of, inter alia, the protection of health and life of humans.

Primarily, the CJEU observed how the matter at hand fell squarely within Articles 34 and 36 of the TFEU. The CJEU held that, given that Article 21a(3a) of the Polish law On Medicinal Products provided for the automatic cessation of the validity of a parallel import license, meaning that the provision was effectively automatically preventing the important of medical products imported in parallel into Poland, this measure fell within the meaning of a restriction on the free movement of goods within the meaning of Article 34 TFEU and must be assessed considering this provision.

On this matter, the CJEU acknowledged that a justification for such a restriction may be compatible under EU law if, for instance, such a restriction is imposed for reasons such as those relating to the protection of public health or if it satisfies any other mandatory requirement as set out under Article 36 TFEU.

In their observations, the Polish and German governments held that given that the marketing authorisation had expired, the national authorities responsible for pharmacovigilance would no longer be in a position of fulfilling their responsibilities in keeping updated information on the quality, safety and efficacy of the medicinal product which is subject to the parallel import. In a nutshell, pharmacovigilance are the rules which are put in place by a member states national authority which are necessary for the protection of public health, to prevent, detect and assess adverse reactions to medicinal products placed on the Union market.

Whilst acknowledging the fact that the protection of health and life of humans is of paramount importance, the CJEU observed how existing case-law requires that for a restriction to fall within the ambit of Article 36 TFEU, it must be appropriate for securing the achievement of the objective pursued and must not go beyond what is necessary to attain it.  The CJEU, in pointing out the burden of having a prohibition satisfy the requirements of Article 36 TFEU, further held that such a prohibition must be applied proportionately, and it must be restricted to what is necessary to achieve the aims concerning the protection of health that are legitimately pursued.  The principle of proportionality necessitates that the means chosen by the Member States are limited to what is appropriate and necessary to safeguard the legitimate objective pursued.

In analysing the arguments and observations made by Delfarma and the Polish and German governments, the CJEU acknowledged that the fact that the marketing authorisation has expired will impose a significant burden on national authorities on member states, given the fact that they are now deprived of a significant source of information and data of the medicinal product at issue. However, such a circumstance still didn’t justify the measures that the Polish law was implementing. Effectively, for the CJEU, the measures that the Polish law were taken were not in line with Article 36 TFEU since they were neither proportionate nor justified.

In support of this, the CJEU held that in the absence of a marketing authorisation of reference, national authorities which are tasked with the pharmacovigilance of a Member State are still able to adequately carry out their obligations. This can be achieved by accessing the necessary information from other sources, including cooperation with national authorities of other Member States. This should facilitate access to the documents and data produced by the manufacturer in the Members States where the medicinal products are still marketed on the basis of a marketing authorisation which hasn’t expired.

Furthermore, the CJEU explained how the national authorities have other avenues which can aid them in their pharmacovigilance such as the possibility of seeking clarity from national authorities of other Member States and enquiring as to whether any new risks have been identified with regards to the medicinal product in question, or whether any changes to the benefit-risk balance of that medicinal product have taken place.

Additionally, there also exists the possibility of national authorities referring to periodic safety update reports which are available to them by virtue of Directive 2001/83/EC on the Community code relating to medicinal products for human use, and Regulation (EC) No 726/2004 laying down Community procedures for the authorisation and supervision of medicinal products for human and veterinary use and establishing a European Medicines Agency.

In view of the above, the CJEU held that while on the one hand the national authority responsible for pharmacovigilance may have additional administrative and economic burdens imposed upon it once the marketing authorisation has expired, this does not justify the automatic expiration of a license for a parallel importation and therefore such a measure will not fall within the scope of Article 36 TFEU and is therefore a breach of the free movement of goods within the internal market.

This case highlighted the fact that while Article 36 TFEU allows the imposition of certain measures which impede cross-border trade, such measures must be justified by the Member State seeking to impose them and must also respect the principle of proportionality. Requirements which, time and time again, have been proven to be an insurmountable hurdle for Member States.