R The Pharmaceutical Society of Great Britain (Respondent (Respondent) ex parte The Association of Pharmaceutical Importers (Applicant (Appellant)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE KERR,LORD JUSTICE RALPH GIBSON,LORD JUSTICE RUSSELL |
| Judgment Date | 30 July 1987 |
| Judgment citation (vLex) | [1987] EWCA Civ J0730-11 |
| Docket Number | 87/0833 |
| Court | Court of Appeal (Civil Division) |
| Date | 30 July 1987 |
[1987] EWCA Civ J0730-11
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(DIVISIONAL COURT)
(LORD JUSTICE MAY AND
MR. JUSTICE SIMON BROWN)
Royal Courts of Justice
Lord Justice Kerr
Lord Justice Ralph Gibson
and
Lord Justice Russell
87/0833
CO/1509/86
MR. DAVID VAUGHAN Q.C. and MR. DERRICK WYATT (instructed by Messrs. S.J. Berwin & Co., Solicitors, London WC1X 8HB) appeared on behalf of the Applicant (Appellant).
MR. JOHN PEPPITT Q.C. and MR. ROBERT WEBB (instructed by Messrs. Walker Martineau & Co., Solicitors, London WC1R 5JL) appeared on behalf of the Respondent (Respondent).
MR. JOHN LAWS and MR. NICHOLAS PaINES (instructed by The Treasury Solicitor, London SW1H 9JS) appeared on behalf of the Secretary of State for Social Services.
(A) Introduction.
The applicants to whom leave to move for judicial review has been granted are a Trade Association, a company limited by guarantee incorporated in March 1984, and its members. The business interests of the applicants appears from their name, but their primary concern is with the importation from other countries in the EEC of so-called "parallel" pharmaceutical products and their marketing in this country. "Parallel imports", as explained hereafter, are pharmaceuticals whose manufacturers have already received a product licence in this country and which have passed the necessary tests to qualify for a parallel licence. The applicants' contention is that certain measures introduced or applied in 1986 by the respondents, the Secretary of State for Social Services and the Pharmaceutical Society of Great Britain ("the Society"), infringe Article 30 of the Treaty of Rome on the ground that their effect is equivalent to imposing quantitative restrictions on the importation of some of the parallel pharmaceutical products in which the applicants deal. Since the provisions of the Treaty are directly enforceable by virtue of section 2 (1) of the European Communities Act 1972, the applicants have applied for declarations and order of mandamus against both respondents to secure the discontinuance of the alleged measures, as well as for an award of damages. Their contention that these measures involve an infringement of Article 30 was rejected on 10th April 1987, albeit not without some hestitation, by a Divisional Court consisting of Lord Justice May and Mr. Justice Simon Brown. In view of their decision that there had been no infringement of Article 30 the Divisional Court did not find it necessary to go on to consider whether the measures complained of would nevertheless have fallen within the ambit of Article 36 of the Treaty, which exempts restrictions on imports which are justified on the grounds of (inter alia) the protection of health or of industrial or commercial property, i.e., trade marks in the present case. But the judgment of the court delivered by Lord Justice May indicated a prima facie view that in all the circumstances Article 36 appeared unlikely to be applicable.
The applicants now appeal to this court against the decision of the Divisional Court, which has meanwhile been reported in (1987) Common Market Law Reports 504.
Initially the appeal took a normal course. The applicants' notice of appeal challenged the decision of the Divisional Court in relation to Article 30 and the respondents issued cross-notices relying on Article 36 if necessary. However, by the beginning of the hearing before us on 29th June 1987 there had been a change of mind on the part of the applicants. Their primary submission was then that, instead of considering the merits of the application under Article 30 and—if necessary—the defence under Article 36, this court should refer all the issues to the Court of Justice of the European Community pursuant to Article 177 of the Treaty. The applicants frankly conceded that they would not have applied for a reference if they had been successful below and there had been an appeal against them, but submitted that in all the circumstances this course was now appropriate. The respondents rightly did not contend that this court is in any way inhibited from making a reference at this stage by reason of the fact that the applicants had not applied for a reference below. They agree that ultimately the matter is entirely one for the court, whatever may be the views of the parties. But they submit that a reference would in any event be inappropriate for a number of reasons.
The arguments have accordingly ranged widely over all aspects of the issues under Articles 30 and 36, but with the focus on the question whether or not the case is appropriate for a reference by this court at this stage under Article 177. That question was not raised at all before the Divisional Court, and we have no indication as to what would have been its view if it had been invited to approach the case on that basis. It follows, however, that our approach to the issues is bound to be different on this appeal. Our concern, at any rate at this stage, is not to reach decisions in relation to Articles 30 and 36. Our concern is to decide whether or not the issues raised in relation to these Articles should be referred to the Court of Justice pursuant to Article 177 or whether they should be retained for decision by this court, followed by the possibility of an appeal to the House of Lords.
(B) The background.
The case is concerned with the prescription and dispensing of proprietary medicines, i.e., drugs marketed under brand names which are registered trademarks, as opposed to so-called "generic" pharmaceuticals. It is therefore convenient to begin by setting out the relevant provisions of the governing statute, the Medicines Act 1968. These are as follows:
"Section 7.
General provisions as to dealing with medicinal products.
…….
(2) Except in accordance with a licence granted for the purposes of this section (in this Act referred to as a 'product licence' no person shall, in the course of a business carried on by him, and in circumstances to which this subsection applies,—
(a) sell, supply or export any medicinal product, or
(b) procure the sale, supply or exportation of any medicinal product, or
(c) procure the manufacture or assembly of any medicinal product for sale, supply or exportation.
(3) No person shall import any medicinal product except in accordance with a product licence.
Section 58.
Medicinal products on prescription only.
(1) The appropriate Ministers may by order specify descriptions or classes of medicinal products for the purposes of this section; and, in relation to any description or class so specified, the order shall state which of the following, that is to say—
a) doctors,
b) dentists, and
(c) veterinary surgeons and veterinary practitioners,
are to be appropriate practitioners for the purposes of this section.
(2) Subject to the following provisions of this section—
(a) no person shall sell by retail, or supply in circumstances corresponding to retail sale, a medicinal product of a description, or falling within a class, specified in an order under this section except in accordance with a prescription given by an appropriate practitioner; and
(b) no person shall administer (otherwise than to himself) any such medicinal product unless he is an appropriate practitioner or a person acting in accordance with the directions of an appropriate practitioner."
The 1968 Act and the Regulations made thereunder impose stringent requirements for the grant of product licences, but it is unnecessary to refer to these in detail. It is also unnecessary to refer to the contents of a number of Directives which have been adopted by the Council of the EEC in this field, save to point out that their principal objectives have been (a) to remove trade barriers in proprietary medicines within the Community, whilst ensuring that public health is not endangered, and (b) to ensure that the conditions governing the grant of marketing authorisations for proprietary medicines are generally uniform throughout the EEC.
These objectives were reflected in the important decision of the Court of Justice in De Peijper (1976) European Community Reports 613 and the subsequent system of "parallel" product licences to facilitate the importation of branded pharmaceutical products. In De Peijper the court was concerned with a situation in the Netherlands which was then typical of the laws in other Member States. Would-be importers of branded medicines were unable to satisfy their national authorities that the imported products were identical or equivalent in their therapeutic effect to domestic products for which a product licence had already been granted, because the importer did not have access to the manufacturers' records etc., which were essential to establish this. The effect of the decision of the court was to require the national authorities to establish systems which removed the obstacles to such imports subject to a number of important safeguards. The ultimate result was the adoption throughout the EEC of the system known in this country as the Product Licence (Parallel Import) scheme ("P.L. (P.I.)") which was introduced by the Department of Health and Social Security in May 1984.
The relevant requirements of a P.L. (P.I.) licence were set out in a memorandum issued by the DHSS Medicines Division in April 1984. and can be summarised as follows. First, the product must be imported from an EEC state in which...
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