Parallel imports of medicinal products: Four CJEU rulings provide clearer guidance
On the hotly debated topic of parallel imports the Court of Justice of the European Union (CJEU) recently issued four rulings, which clarified the conditions for the repackaging and relabelling of medicines and medicinal products in their distribution to other markets.
All these decisions were preliminary rulings in response to requests made by national courts in Germany, Denmark, and the Benelux, on the interpretation of the harmonised EU laws. The main focus in three of the cases was the question regarding whether a trade mark owner is entitled to oppose a parallel importer's repackaging of a medicinal product if the replacement of anti-tampering devices would leave visible traces. The fourth case touched on the question of whether parallel importers can rebrand generic medicines with the trade mark of the reference medicinal product.
Exhaustion of rights
EU law entitles exclusive rights to the distribution of goods to the proprietor of a trade mark, but only until those goods are placed on the European Economic Area (EEA) market. At this point, the trade mark owner is prohibited from enforcing their rights over distribution, commercialisation or sale of the goods by third parties. However, there are limitations to such exhaustion of rights in the context of parallel importation (when products have been purchased in one EU member state, where they had been sold by the trade mark owner or with their consent, and later sold in another EU member state). The importer is entitled to repackage and relabel the original products only if the five “Bristol-Myers Squibb (BMS) conditions” are satisfied:
- Reliance on trade mark rights and any objection by the trade mark owner would contribute to the artificial partitioning of the markets between EU member states;
- The repackaging does not affect the original condition of the product inside it;
- The new packaging clearly states who repackaged the product and the name of the manufacturer;
- The presentation of the repackaged product is not such as to be liable to damage the reputation of the trade mark and of its owner; and
- The importer gives notice to the trade mark owner before the repackaged product is put on sale and provides a specimen if requested.
EU Medicines Directive and the Falsified Medicines Directive
Pharmaceutical products are regulated by a number of specific rules, which aim to ensure that such products are safe and that their trade is controlled. Many of such rules are laid down in the EU Medicines Directive (2001/83/EC), as amended by the Falsified Medicines Directive (FMD) (2011/62/EU), and the Commission Delegated Regulation (EU) 2016/161, which introduced additional requirements for the packaging of medicinal products.
Importantly, the outer packaging or (if not applicable) the immediate packaging of a medicinal product must include two main safety measures:
- a unique identifier (such as a barcode, which verifies the product’s origin and authenticity), and
- an anti-tampering device (for example, a safety seal, which shows if the packaging has been opened or altered).
The verification of those two safety features is necessary in order to guarantee the authenticity of a medicinal product throughout the supply chain. Those safety features may be removed or covered only under strict conditions intended to guarantee the authenticity of the medicinal product and the absence of any tampering.
In recent years some parallel importers have used the FMD as an attempt to justify the necessity of repackaging over relabelling as a general rule.
Relabelling required instead of repackaging despite visible traces of opening
The CJEU had to assess in three very similar cases the legitimacy of repacking of medicinal products, where the replacement of anti-tampering devices (as required by the FMD) would leave visible traces. While the parallel importers feared that the visible and irreversible traces of opening of the original packaging cast a doubt on the integrity of the medicinal products, the pharmaceutical companies said that importers can be compliant by adding a new anti-tampering device covering the traces of the opening of the original packaging to indicate that this new safety seal was affixed during a lawful repackaging.
The CJEU now confirmed in the Bayer and Merck cases that in general repackaging in new packaging and relabelling of parallel imported medicinal products are equivalent forms of repackaging, as regards the effectiveness of the safety features. The legislator explicitly did not want to prevent the reuse of the original outer package.
That said, according to the CJEU in the Bayer case, there is however no per se repackaging entitlement or justification for the importer merely because of the presence of traces on the outer packaging of a medicinal product which were caused by the opening by the parallel importer. As such, these visible traces do not necessarily hinder the importer’s access to the new market. Rather, the trade mark owner may oppose repackaging (and insist in relabelling) provided that:
- the relabelled product still complies with the safety-feature requirements set out in the FMD, and
- the relabelled product has effective access to the import market.
As defence, the importer will need to provide concrete reasons (and evidence) why they think it is necessary to repackage the product, and why they could not simply replace the security features of the packaging with new security features of equivalent effect.
In the Novartis and Merck cases the CJEU confirmed that the trade mark owner may oppose repackaging and insist on relabelling where:
- the visible traces of opening of the original outer packaging are clearly attributable to the (lawful) repackaging by the parallel importer; and
- the traces would not cause such a strong consumer resistance on the part of a significant proportion of consumers in the importer market to medicinal products repackaged that this would create a barrier to the effective access to the market.
This means that the packaging of the medicinal product should clearly mention the re-packager and provide sufficient information regarding the supply chain on the possible origin of those traces. Also, the CJEU said that parallel importers cannot rely on a general presumption of consumer resistance to such medicinal products. Instead, the parallel importer has to show that there is such a consumer resistance that constitutes a barrier to effective access to that market, which must be established on a case-by-case basis.
No stricter rules in EU member states allowed
Finally, in the Merck and the Bayer cases, the CJEU also confirmed that the EU member states have no discretion to impose that parallel imported medicinal products must, as a general rule, be repackaged instead of relabelled, which had been the situation in Germany and Denmark. Therefore, EU member states cannot request parallel importers to always repackage a medicinal product rather than to relabel the same.
Rebranding generic products
In the Impexeco case the CJEU ruled that parallel importers cannot generally repackage generic medicines in a new outer packaging and then affix the corresponding trade mark of the reference medicinal product. Such use of the trade mark would only be allowed if (in addition to satisfying all the BMS conditions including “objective necessity“) the two medicinal products are identical in all aspects.
The court clarified that identity could be assumed if the reference medicinal product and a generic medicinal product are manufactured by the same entity (or by economically linked entities) and they constitute the same product marketed under two different sets of rules. The differences in the rules for those products and how they are perceived by health professionals or patients were not sufficient to consider them different. Otherwise, trade mark owners could contribute to an artificial partitioning of the markets between EU countries by marketing an identical medicinal product sometimes as a reference medicinal product and sometimes as a generic medicinal product. However, there would be no identity if the generics and the branded medicines differ over the pharmaceutical form, the chemical form of the active substance, and its excipients.
In this particular case, the court held that the specific Novartis and Sandoz products in question were identical. However, a rebranding was not considered objectively necessary for the distribution of the medicines in the new market. In particular, the court said an EU member state cannot generally refuse a parallel import licence for a generic medicinal product if the corresponding reference product already has a marketing authorisation in that country. If the reference product has been authorised, the importer does not need to rebrand the product but can simply market the generic medicinal product under the generic brand and the international nonproprietary name (INN). Using the (reputation of the) trade mark of the reference product would only be to the economic advantage of the parallel importer.
In the Merck case, the CJEU also dealt again with questions of “debranding”. The court confirmed that the parallel importer may be liable to damage the reputation of a trade mark in case the importer only reaffixes to the new outer packaging the product specific trade mark of the proprietor, without reproducing the other trade marks and/or the other distinctive signs which appeared on the original outer packaging. Whether or not there is indeed any damage to the reputation of the trade mark concerned is then, however, to be assessed by the national courts.
Case details at a glance
Jurisdiction: European Union
Decision level: CJEU Parties: Novartis Pharma GmbH v Abacus Medicine A/S
Date: 17 November 2022
Citation: C‑147/20
Decision: dycip.com/novartis-abacus
Jurisdiction: European Union
Decision level: CJEU Parties: Bayer Intellectual Property GmbH v kohlpharma GmbH
Date: 17 November 2022
Citation: C‑204/20
Decision: dycip.com/bayer-kohlpharma
Jurisdiction: European Union
Decision level: CJEU Parties: Merck Sharp & Dohme BV and others v Abacus Medicine A/S and others
Date: 17 November 2022
Citation: C 224/20
Decision: dycip.com/merck-abacus
Jurisdiction: European Union
Decision level: CJEU Parties: Impexeco NV v Novartis AG / PI Pharma NV v Novartis AG
Date: 17 November 2022
Citation: Joined cases C‑253/20 & C‑254/20
Decision: dycip.com/impexeco-novartis-pi
“BMS” conditions
CJEU, 11 July 1996, Bristol-Myers Squibbs v Paranova A/S (Case C-427/93), C. H. Boehringer Sohn and others v Paranova A/S (Case C-429/93) and Bayer AG and others v Paranova A/S (Case C-436/93) – the criteria were further clarified by subsequent CJEU decisions.