In April 2024, the European Parliament voted to adopt a revised version of a new Pharma Directive, part of the European Commission’s legislative reform of EU pharmaceutical law. One amendment, which might have slipped under the radar, could significantly alter the current legal framework for parallel imports of pharmaceuticals, eroding the rights of trademark proprietors.

This article is part of our series covering the amendments adopted by the European Parliament to the proposed reforms of EU pharmaceutical legislation on medicinal products for human use, known as the “Pharmaceutical Package,” presented by the European Commission on 26 April 2023. To read our first article and the entire series, please click here.

Current Legal Framework Under CJEU Jurisprudence

For nearly three decades, the European Court of Justice (CJEU) has established conditions under which a parallel importer can change the original packaging of medicinal products – always carefully weighing the interests of the parties involved, i.e. the general principle of free movement of goods (Article 34 TFEU) and the rights of trademark proprietors.

The CJEU established five criteria (the so-called ‘Bristol-Myers Squibb [BMS] Conditions’[1]) that must be cumulatively satisfied by a parallel importer to insulate itself from a trademark infringement challenge. According to the Court, the proprietor of a trademark may not oppose the further marketing of a pharmaceutical product bearing its trademark which has been repackaged by an importer if:

1. Repackaging is “necessary”

it is shown that such opposition would contribute to artificial partitioning of the markets between Member States, in particular because the repackaging is necessary for marketing the product in the Member State of import;

2. Repackaging does not affect the product

it is shown that the repackaging cannot affect the original condition of the product inside the packaging;

3. The repackager and name of manufacturer is indicated

the new packaging clearly indicates the repackager of the product and the name of the manufacturer;

4. Repackaging is not likely to damage the reputation

the presentation of the repackaged product is not liable to damage the reputation of the trademark and its proprietor, which implies in particular that the packaging must not be defective, of poor quality, or untidy; and

5. The repackager gives notice to the trademark proprietor (and supply of specimen)

the importer gives notice to the proprietor of the trademark before putting the repackaged product on sale, and supplies him, upon request, with a specimen of the repackaged product.

As concerns the way of repackaging, i.e., re-boxing vs relabeling, the CJEU established with regard to the ‘necessity’ criterion that the trademark proprietor may oppose replacement packaging where the parallel importer is able to reuse the original packaging for the purpose of marketing in the Member State of importation by affixing labels to that packaging.[2] In view of the Falsified Medicines Directive[3], the CJEU further clarified that this general notion is also not changed by the requirement of safety features such as the anti-tampering device (ATD). Rather, from a safety point view, repackaging in new packaging and relabeling of parallel-imported medicinal products are equivalent without one form taking precedence over the other. In consequence, a trademark proprietor may still demand reusing the original packaging and a national provision[4] that in any case requires the re-boxing of medicinal products is inadmissible.[5]

Thus, Member States are currently not allowed to require that medicinal products imported in parallel must be repackaged in new packaging (i.e. re-boxed).

Proposed Amendment by the EU Parliament and Its Consequences

Contrary to the CJEU’s position, the EU Parliament has proposed the following amendment to the new Pharma Directive (Amendment 188):

“Article 67 – paragraph 7a”

7.a “For the purpose of patient safety, Member States may decide that medicinal products imported or distributed in parallel shall be repackaged in new outer packaging.”

If adopted, this regulation would permit Member States to generally require re-boxing of parallel imports. The introduction of this provision came as a surprise. The legislative proposal from the European Commission of April 26, 2023, did not include such a regulation, and the EU Parliament’s reasoning for this deviation from the CJEU’s well-established case law remains unclear.

The potential consequences of this amendment are significant:

• Patchwork Situation: The implementation of such provision could lead to a patchwork situation in Europe. While some Member States my require re-boxing of parallel imports, others may not. This could jeopardize the uniformity of the principle of exhaustion of trademark rights within the EU.
• Interference with Trademark Proprietor Rights: This measure would mean a major interference with and curtailment of trademark proprietors’ rights, disregarding the doctrine of necessity established by the CJEU over decades, and ultimately disrupting the balance between the principle of free movement of goods on the one hand and the legitimate interests of trademark proprietors on the other hand.

Next Steps

The Council of the EU will review the proposed amendments. Their first reading position will indicate their stance on this rather drastic reform of the parallel trade framework.

Stay tuned for further updates as this legislative process unfolds.

Related articles

• EU Parliament Adopts Position on Pharmaceutical Reform
• EU Parliament Adopts Position on Pharmaceutical Reform: Focus on Combating Antimicrobial Resistance
• Revamping the European pharmaceutical industry: A closer look at the EU’s proposed legislative framework

References

[1] Bristol-Myers Squibb [CJEU Joined cases C-427/93, C-429/93 and C-436/93].

[2] Ferring II [CJEU Case C-297/15], margin 29.

[3] Directive 2011/62/EU of the European Parliament and of the Council of 8 June 2011 amending Directive 2001/83/EC on the Community code relating to medicinal products for human use, as regards the prevention of the entry into the legal supply chain of falsified medicinal products.

[4] The national legal provision which gave rise to the questions referred to the CJEU was a Danish provision of the Medicinal Products Act which generally required the parallel importers to repackage the medicinal product in new packaging. Only in exceptional cases and upon request were parallel importers allowed to relabel the original packaging.

[5] MSD [CJEU Case C-224/20], margin 98 f.