In three separate preliminary rulings delivered by the Court of Justice of the European Union (CJEU) on 17 November 2022 (Novartis v Abacus Medicine, Bayer v kolpharma, and Merck Sharp & Dohme (MSD) v Abacus Medicine), the pharmaceutical industry received welcome guidance as to the extent to which brand owners may oppose the repackaging of medicinal products to comply with EU rules on tamperproof packaging.
The EU Falsified Medicines Directive (FMD) (Directive 2011/62/EU) introduced new rules to safeguard medicinal products requiring the outer packaging of medicinal products to incorporate two safety features:
(a) a unique identifier to enable verification of authenticity and identification of individual packs; and
(b) an anti-tampering device to show whether the packaging has been opened or altered.
These provisions were implemented via secondary legislation (Commission Delegated Regulation 2016/161) which came into force on 9 February 2019, and so the three cases referenced above represent the CJEU’s first attempt to provide guidance on the impact of the new safety features rules on the ‘BMS conditions’ (the well-established body of case law surrounding repackaging of products by parallel importers – see Bristol-Myers Squibb at paragraph 79; Boehringer Ingelheim at paragraph 32; Junek at paragraph 28).
In the cases before the CJEU, the parallel importers had notified the relevant brand owners that they intended to repackage parallel imported products. They claimed that they were lawfully obliged to open the outer packaging of the medicinal products so as to replace the package leaflet with one in the language of the importing country. As this would damage the integrity of the anti-tampering device on the outer packaging, the parallel importers claimed that they had to replace the packaging.
Brand owners argued that repackaging in this scenario was not ‘necessary’ (as required by the first of the five BMS conditions), as the safety requirements could be met by applying a barcode with a new unique identifier using an adhesive label, and affixing a new anti-tampering device to the original packaging. Parallel importers disagreed, claiming that adhesive labels could be easily removed, and that even with new anti-tamper devices it would be apparent that the original outer packaging had been opened, casting doubt in the minds of consumers as to the authenticity of the products.
The CJEU noted that the FMD safety measures did not preclude the reuse of the original packaging, so long as the original safety features could be replaced by equally effective features which enable the verification of the medicinal products concerned.
In relation to the anti-tampering device, the CJEU went on to provide additional guidance on this general rule:
- Any replacement anti-tampering device must make it possible to verify, with the same effectiveness as the original anti-tampering device, that the medicinal product has not been opened after repackaging.
- If it is clear to wholesalers and pharmacists that any traces of opening on the outer packaging are attributable to the parallel importer, that is not sufficient to justify replacing the outer packaging.
- If a medicinal product’s outer packaging bears visible traces that it has been opened, the effective access of that medicinal product to the market will only be considered hindered if a significant proportion of consumers in the importing Member State oppose the idea of acquiring that medicinal product. In such circumstances, a trade mark owner cannot oppose the use of new outer packaging, as otherwise it would contribute to artificial partitioning of the markets between the Member States.
- A parallel importer cannot simply rely on a general presumption of consumer resistance for products which bear visible traces that the outer packaging has been opened. Rather, consumer resistance must be assessed on a case-by-case basis, taking into account:
i. the circumstances prevailing in the Member State of importation at the time in which the medicinal product was marketed; and
ii. whether traces of opening on the outer packaging can only be detected after a thorough verification by wholesalers or pharmacists, pursuant to their verification obligations.
As regards the unique identifier, the CJEU had no issue with the use of adhesive labels, provided they could not be removed without being damaged and that the identifier remains readable until the later of one year after the expiry date of the relevant pack, or five years after the date on which the pack was released for sale or distribution.
In relation to repackaging generally, the parallel importers in Bayer argued that relabelling did not offer equivalent safeguards in terms of safety to repackaging. However, the CJEU disagreed, clarifying in both Bayer and MSD that repackaging and relabelling of medicinal products are “equivalent forms of repackaging as regards the effectiveness of the safety features”.
In circumstances where the trade mark on the original outer packaging is replaced by a different product name, the CJEU has confirmed the circumstances in which rebranding is objectively ‘necessary’, namely:
- the immediate packaging (i.e. the packaging immediately in contact with the medicinal product) also bears the original trade mark; and/or
- the new outer packaging refers to the original trade mark (in addition to the new product name).
The CJEU also provided that trade mark owners can still oppose the marketing of repackaged products, even if the requirement to repackage is a result of a Member State’s domestic rules and regulations.
The CJEU’s rulings provide useful guidance for the pharmaceutical industry, as they have clarified that parallel importers cannot merely rely on the obligations under the FMD, or indeed under related national laws, to justify the adoption of new outer packaging for medicinal products unless they have a legitimate reason to do so. The fact that compliance with the FMD rules may lead to visible traces of opening on the outer packaging does not, on its own, justify repackaging.
The CJEU has attempted once again to strike a balance between protecting the rights of brand owners and the interests of parallel importers, with the objective of ensuring that the free movement of goods is not disproportionately restricted. Although the rulings have been positively received by pharmaceutical companies, they leave room for further development of the case law at national court level in deciding whether and when consumer resistance to traces of opening on the outer packaging of a product should be considered strong enough to justify the adoption of new outer packaging by parallel importers. This will be fact-sensitive and the different attitudes and approaches to be adopted by national courts remain to be seen.
Although the UK is no longer in the EU, it does still recognise EEA exhaustion of IP rights and allows parallel imports from the EEA into the UK. The FMD obligations to affix safety features no longer apply in Great Britain, although packs that have FMD safety features are still accepted. The MHRA encourages – but has not required – companies to retain tamper evidence devices on packs, so it is feasible that UK courts faced with a similar factual scenario may reach a different conclusion as to the necessity of any repackaging. Parallel imports of medicines into Northern Ireland will continue to be subject to the FMD requirements.
Readers of our BioSlice Blog may also be aware that these three CJEU rulings were delivered on the same day as the joined cases of C-253/20 Impexeco NV v Novartis, and C-254/20 PI Pharma v Novartis, which we discuss in this blog post. This ruling examined the circumstances under which a parallel importer may rebrand a generic product that is being imported with the brand name of a reference product. This was the first time that the CJEU considered and applied exhaustion of trade mark rights principles in circumstances in which a generic product is rebranded to that of the reference product by parallel importers, with the CJEU once again ruling in favour of brand owners.