EU Court Rebukes Poland For Importing Unauthorized Generics
This article was originally published in The Pink Sheet Daily
Executive Summary
The Court of Justice of the European Union has said that a Polish law allowing unauthorized medicines to enter the market and undercut the price of originator drugs is illegal.
The Court of Justice of the European Union has rebuked Poland for trying to circumvent EU law and introduce unauthorized medicines into its market in order to achieve cost savings. The CJEU decision effectively bans this illegal importation and means that manufacturers of originator drugs can be reassured that their market exclusivity periods remain protected.
Under the disputed Polish legal provision, importers could bring unauthorized drugs into the country, provided that they contained the same active ingredient, dosage and form as an authorized product already on the market. The only other caveat is that they had to be cheaper, a requirement clearly aimed at cutting health care costs.
Poland acceded to the EU in 2004, but the Commission only brought the case against the member state in 2008. Member states are supposed to have complied with existing EU legislation before they accede. Poland may well have done so, but then introduced the law after accession, in 2005.
The practice appears to have been geared towards undercutting the price of an originator product by allowing a generic medicine to enter the market following patent expiry, but still within the period of data exclusivity. A product on the market in the European Economic Area – 27 EU Member States, plus Norway, Liechtenstein and Iceland – enjoys at least 10 years of data exclusivity, during which an application for generic medicine authorization may not be filed. Moreover, the generic cannot actually be marketed until a further two years have passed. This full, 10-year protection is known as the data exclusivity period.
Poland has therefore violated EU law on two counts. Not only has it ignored the data exclusivity period, but it has allowed unauthorized products onto its market.
There is a provision in EU law that would permit an unauthorized product to be allowed into a member state market, but this is only for a “special need” and for a specific named patient upon the request of a doctor. Moreover, this is not permitted if there already is an authorized equivalent product on the national market.
The CJEU unsurprisingly did not buy Poland’s argument that financial considerations could constitute a “special need” because they guaranteed the stability of the health service and permitted poorer patients to get access to the medicines they need. The Treaty on the Functioning of the European Union does allow member states to organize their own social security systems, but the court underscored that they must comply with EU in doing this – something that Poland clearly was not doing.
The Polish argument also is irrelevant because EU law permits member states to set prices for medicines and regulate reimbursement so that they can effectively ensure the financial stability of their health services. This provision is undergoing a shake-up with the revision of the so-called Transparency Directive (Also see "EU Transparency Directive Revisions May Accelerate Access To New Medicines, But IP Issues Set To Cause A Storm" - Pink Sheet, 12 Mar, 2012.).
“In fact, the only really surprising thing about this case is that Poland was allowed to get away with it for so long,” Tim Worden, partner at international law firm Taylor Wessing, said.
Poland Health Minister Bartosz Arlukowicz said that the Court decision was indeed binding and that Poland would have to amend its law accordingly.
The impact on original manufacturers is unclear as there is little existing data on how many drugs were illegally introduced into Poland in this way. However, the Polish pharmaceutical market was valued at roughly $10 billion in 2011. Generic medicines constitute some 85% of the market by volume and 65% by value.