On 22 December 2022, the Court of Justice of the European Union (CJEU) — sitting in Grand Chamber — published its judgement in case C-530, Euroaptieka. The judgement adds further commentary to the meaning of “advertising medicinal products” in the EU and the competencies of EU Member States to restrict drug advertising activities. The judgement has particular implications for advertising “unspecified medicinal products”. No doubt, this judgement will be of interest to pharmaceutical companies and pharmacies looking at the communications activities they carry out in the EU and the risks entailed.

Background

The case concerned Euroaptieka, a group operating a network of pharmacies and companies distributing medicines in Latvia. In 2016, Euroaptieka advertised a promotion on its website and in a monthly magazine, offering retail customers (i.e., members of the public) a 15% discount off the cost of medicines, when the customer purchased at least three products (the “Euroaptieka Promotion”).

Latvian authorities banned the advertisement, citing domestic legislation that prohibits advertising medicines to the public by “encourag[ing] the purchase of the medicinal product…. on the basis of its price by announcing a special clearance sale, or by indicating that the medicinal product is sold as a bundle together with other medicinal products (including at a reduced price)…” (the “Latvian Restriction”).

The Latvian Restriction does not have a direct antecedent in EU medicines advertising legislation. It is in effect a national rule. The EU Medicines Directive (2001/83/EC) does, however, include the following provisions:

  • The definition of “advertising medicinal products” includes “any form of … canvassing activity or inducement designed to promote the prescription, supply, sale or consumption of medicinal products…” (Article 86(1));
  • Prescription-only medicines must not be advertised to the general public (Article 88);
  • All medicines advertising (including advertising non-prescription medicines to the public) must “encourage rational use” (Article 87(3)).

The referring Latvian court asked the CJEU to rule upon, in essence:

(i) whether “advertising of medicinal products” as defined under EU law included the type of activity that Euroaptieka had undertaken, notwithstanding the fact that the Euroaptieka Promotion was essentially price-promotional and did advertise any particular medicinal product or group of medicinal products; and

(ii) whether the EU Medicines Directive precludes/allows a Member State to enact legislation which extends the list of prohibited advertising methods and imposes stricter restrictions than those provided in the EU Medicines Directive; and

(iii) whether the specific Latvian Restriction, prohibiting such promotional activities, was consistent with the EU Medicines Directive.

CJEU Ruling

In summary, the Grand Chamber of the CJEU ruled that:

  1. The concept of “advertising medicinal products” may include communications that encourage the purchase of medicines through price promotions, even where the medicines being promoted are “unspecified” or “general.” In other words, where the promotional communication does not concern specific medicines but also to “unspecified medicinal products” (i.e., medicinal products in general or a set of non-identified medicinal products), it may still fall under the restrictions for “advertisement”.
  2. The EU Medicines Directive does not preclude Member States from enacting national laws such as the Latvian Restriction (i.e., restrictions against promoting non-reimbursable OTC medicines to the public using particular types of price promotion) that go beyond the prohibitions of the EU Medicines Directive.

Discussion

The meaning of “advertising medicinal products” has been the subject of various CJEU rulings in the past.[1] The Court has consistently favoured a broad definition, keeping in mind the public health implications of communications relating to health and medicines advertising. The Court has also stressed the importance of assessing the underlying intention — whether or not it is designed to encourage the prescription, sale or use of medicinal products. The Court may infer intention from the communication itself and its context, which makes the content and context key. In general, those cases have concerned situations where the reference to particular medicinal products was clear — the question at issue was whether the communication was promotional or not.

In a pair of recent cases, the CJEU discussed the definition in the context of online pharmacies.[2] In effect, the Court distinguished between medicines advertising (as conceived of in the EU Medicines Directive) and the rights of pharmacies to advertise themselves and the services they offer to patients, including the supply of medicines in general. It may have been tempting to conclude that the case law pointed to a distinction between promoting specific medicines (which clearly is “medicines advertising”) and communications about medicines generally without reference to a particular product or group of products.

The ruling in Euroaptieka suggests that distinction is rather more nuanced, when it comes to advertising or communicating about medicines in general. According to the Court here, the concept of medicines advertising (as conceived of under the EU Medicines Directive) can also cover situations where promotional activity relates to unspecified medicinal products (i.e., medicinal products in general) or the entire portfolio of a pharmacy or pharmaceutical company.

The Court’s view is based on a purposive interpretation of the EU Medicines Directive, keeping in mind the Directive’s objective of protecting public health. Looking at the judgement, two aspects were particularly noteworthy in respect of communications that relate to medicines in general (as opposed to specific, identifiable products): (i) the communication was promotional in and of itself (i.e., there was an underlying intent to increase purchases by offering discounts); and (ii) the potential risks for the public health posed by advertisers encouraging the excessive or irrational use of medicines through advertising multi-buy and similar price promotions. Given both factors above, the absence of any reference to specific, identifiable medical products was not enough to suggest this was not “medicines advertising.” The risk to public health through potentially encouraging excessive use was apparent. That risk seemed particularly pronounced for OTC medicines, where the purchase of a medicine may not be intermediated by a clinician or pharmacist.

The Court also provided clarifications regarding the competencies of the EU Member States. In a previous decision, the CJEU already stated that the EU Medicines Directive does not prevent Member States from prohibiting advertising measures that promote the inappropriate use of a medicinal product and therefore endanger the public health.[3] The CJEU now decided that the EU Medicines Directive does not preclude Member State laws that prohibit the inclusion (in advertising to the general public of medicinal products that are neither subject to medical prescription nor reimbursed) of information which encourages the purchase of medicinal products by justifying the need for that purchase on the basis of the price of the products, by announcing a special sale, or by indicating that those medicines are sold together with other medicines (including at a reduced price) or with other types of products. When reading the reasoning of the judgement, the CJEU’s view appears even stricter as it states that in the interest of public health, the EU Member States even ”must prohibit” such advertising.

Practical Implications

Advertising for medicines is a constant hot topic in the practice of pharma law in the EU. With new technologies and advertising channels, the practical and legal nuances of pharmaceutical advertising become increasingly sophisticated.

There is a relatively well-established distinction in EU medicines advertising regulation between “advertising” to the general public and the legitimate provision of general, non-product-specific public information about medicinal products and treatment. On the basis of this distinction, pharmaceutical companies often carry out institutional or corporate advertising or run disease awareness campaigns. Such campaigns often encourage patients to seek diagnosis or medical treatment, in general rather than specific treatments.

In our view, this Euroaptieka judgement likely preserves the overall distinction between advertising medicines and the legitimate provision of product agnostic information. However, it does add further nuance and intricacy when communicating about medicines in general.

Actors in the pharmaceutical and healthcare space will not be able to rely on the concept that talking about medicinal products non-specifically and in general instantly takes them outside the definition of advertising. Arguably, that approach was always somewhat of a false-friend and potentially overly simplified. National medicines advertising authorities and courts in the EU rule against companies for indirect (unlawful) medicines advertising. That included cases where the company had not named specific medicinal products, but where an underlying intention to promote the unnamed medicine could be inferred.

If anything, the Euroaptieka ruling adds further nuance and breadth to indirect and portfolio advertising. However, even with this decision, there will still be practical challenges when it comes to drawing the line between indirect advertising of medicines and the many non-promotional information activities. This will be a relevant question in practice where a holistic legal assessment of the activities will remain necessary.

This CJEU judgement may nevertheless embolden national authorities to interpret the legislation yet more purposively. Where unspecified medicines are concerned, there may need to be a closer examination of whether: (i) the underlying context and intent were promotional; and (ii) whether the communication risked encouraging the irresponsible or excessive use of medicines. If so, those communications risk being viewed as advertising even if a particular product is not being advertised.

The judgement may well concentrate minds in the Marketing, Communications and Legal departments of pharmaceutical companies and other healthcare players. Companies should assess the impact of this judgement for their advertising practices and other information activities like institutional/corporate advertising or disease awareness campaigns.

The EU medicines advertising specialists of Covington & Burling LLP are always on hand to help navigate clients through this increasingly nuanced legal area.

[1] For example, MSD v Merckle, C‑316/09, EU:C:2011:275.

[2] Judgment of 1 October 2020, A (Advertising and sale of medicinal products online), C‑649/18, EU:C:2020:764; judgment of 15 July 2021, DocMorris, C‑190/20, EU:C:2021:609.

[3] CJEU, Judgment of 8 November 2007, Gintec, C‑374/05, EU:C:2007:654, marginals 51, 55 and 59.

Further to our discussion on the European Commission’s proposal to extend the transition period under the Medical Devices Regulation (EU) 2017/745 (MDR), the Commission has adopted a formal proposal for a legislative amendment of the MDR and In Vitro Diagnostic Medical Devices Regulation (EU) 2017/746 (IVDR) and published a press release, Q&A and factsheet on the proposal. The proposal does not introduce any substantive changes to the broader MDR but focuses on amending the transitional provisions in the MDR.

The proposed changes to the MDR transition provisions aim to address concerns regarding Notified Body capacity and the significant number of medical devices yet to transition from the former Directives to the MDR. This situation is currently threatening the availability of such devices within the EU market.

In essence, the proposal extends the period companies have to obtain MDR-compliant certificates and also provides more time for Notified Bodies to clear the backlog in their conformity assessments.

The main elements addressed in the proposal are:

  • For medical devices approved under the Medical Devices Directive 93/42/EEC (MDD) or the Active Implantable Medical Devices Directive 90/385/EEC (AIMDD) covered by a certificate or a declaration of conformity issued before 26 May 2021, the relevant transition periods will be extended:
    • to 31 December 2027 for high-risk devices (class III devices and for class IIb implantable devices, except sutures, staples, dental fillings, dental braces, tooth crowns, screws, wedges, plates, wires, pins, clips and connectors); and
    • and to 31 December 2028 for medium and low-risk devices (class IIb devices other than those covered in the foregoing point, for class IIa devices, and for class I devices).
  • The extensions set out above will only apply to devices that are considered “safe” and for which the manufacturers have taken steps to transition to the MDR (initiate MDR conformity assessment and implement a QMS both no later than 26 May 2024).
  • The transition period for class III implantable custom-made devices will be extended to 26 May 2026, subject to the manufacturers of such devices applying for a conformity assessment before 26 May 2024.
  • To allow for the above, the proposal will extend the validity of certificates issued under the MDD prior to 26 May 2021 (the date on which the MDR became applicable).
  • The removal of the “sell-off”-deadline established in the MDR and the IVDR, after which MDD/IVDD/AIMDD-certified medical devices already placed on the market had to be withdrawn. This will ensure that healthcare systems and patients will continue to have access to safe and crucial medical devices that are already on the market.

The proposal obviously gives the medical device industry more time to transfer their devices from MDD (and AIMDD) to the MDR. This also reduces the capacity issues of the Notified Bodies. Nevertheless, the extended timelines only apply if certain conditions are met and these include that the manufacturer company must have applied for the MDR-based conformity assessment with a Notified Body no later than 26 May 2024. Further, the manufacturer must have put in place a quality management system in accordance with the MDR no later than 26 May 2024. Hence, despite the extended timelines there is still a lot of work to do for device companies and the Notified Bodies.

Even though the new extended timelines would provide device manufacturers some relaxation, it still remains to be seen whether they will be sufficient in light of the significant implementation issues of the MDR.

The proposal also clarifies that the MDR requirements relating to post-market surveillance, market surveillance, vigilance, registration of economic operators and of devices shall apply to the above “extended” devices in place of the corresponding requirements of the MDD and AIMDD.

As discussed in our separate blog last month, the EU’s Medical Device Coordination Group (MDCG) released new guidance (MDCG 2022-18) on the use of the non-compliance procedure under Article 97 of the MDR for devices that do not yet comply with the MDR. Article 97 MDR, even if not designed for these MDR transition and implementation issues, formally enables such medical devices to continue to be available on the market if they do not pose an unacceptable risk to the health or safety of individuals or to public health. In the EU Member States, manufacturers and regulatory authorities have already been discussing the Article 97 MDR route ahead of this new MDCG guidance as a means to cope.  

The new proposal, along with the MDCG Article 97-MDR-guidance, shows that the European Commission is working towards resolving the issue of the large number of devices yet to transition to the MDR. As noted, the proposal also “helps” the diagnostics industry by removing the sell-off period from the IVDR. The need to transition (a huge number of) IVDs from the IVDD to the IVDR will likely cause an even more delicate regulatory situation than the device industry has been facing with the MDR. In particular, the diagnostics industry and pharmaceutical companies engaged in companion diagnostics (CDx) should take steps as early as possible to secure compliance with IVDR.

As to next steps, the proposal now has to be adopted by the European Parliament and Council, using an accelerated co-decision procedure. The Covington medical device team will continue to monitor this process and provide further updates.

A snapshot by yours truly while following the debate on synthetic biology.  As you can see, business gets a seat in a place far, far away – in the back of the room.

After two weeks of intense negotiations in Montreal, on 19 December 2022, the Conference of the Parties (COP) to the Convention on Biological Diversity (CBD) adopted the new Global Biodiversity Framework.  Covington partner Bart Van Vooren was on the ground as a business delegate to these talks. 

Brief Summary

This blog explains one the most consequential outcomes for companies from COP15: the decision to set up a global mechanism requiring the private sector to pay into a new Global Biodiversity Trust Fund.  The COP15 Decision was to decide to set up the mechanism immediately, and to tease out the details over the next two years.  In short, the new fund is expected to generate up to 15 billion USD per year from companies that “use digital sequence information on genetic resources“.  The revenue generated will then be disbursed in support of the four (4) Goals for 2050 and twenty-three (23) Targets for 2030 that together make up the Global Biodiversity Framework (GBF).  This new mechanism will no doubt impact most life sciences companies, but the COP15 Press Release hinted at two sectors that are being singled out (my emphasis):

“Digital sequence information on genetic resources – a dominant topic at COP15 –  has many commercial and non-commercial applications, including pharmaceutical product development, improved crop breeding, taxonomy, and the monitoring of invasive species.“

Reader beware, this blog is a long read.  I will first provide some insight on the political narratives and financial expectations underpinning the new system, and then deep dive into the legal nitty-gritty and (un)knowns of the Decision on Digital Sequence Information (DSI) adopted by COP15.

Continue Reading Outcome from COP 15: a New Global Biodiversity Fund Paid For by Life Sciences Companies that “Use Digital Sequence Information on Genetic Resources”

It’s all happening in the device space. Further to the European Commission’s meeting we discussed last week on the proposed three-year extension to the transition period under the Medical Devices Regulation (EU) 2017/745 (MDR), the EU Medical Device Coordination Group (MDCG) has now published guidance clarifying the use of the non-compliance procedure under Article 97 of the MDR.

Under Article 97, competent authorities can temporarily allow devices that do not comply with the MDR to continue to be placed on the market if they do not present an unacceptable risk to the health or safety of individuals or to public health.

Continue Reading New Guidance on the Application of Article 97 of the MDR to Legacy Devices Certified under the MDD or AIMDD

The European Commission intends to extend the transition period under the Medical Devices Regulation (EU) 2017/745 (MDR) for an additional three years. The proposal comes among concerns with the number of devices yet to transition to the MDR, along with rising costs of re-certification and extended time periods for assessment. It is estimated that around 23,000 certificates of conformity for EU medical devices have not yet transitioned, which will expire on May 26, 2024 (if not before). Low notified body capacity is a key contributing factor for the transition delays.

Continue Reading European Commission Announces Intention to Introduce Three-Year Extension to the MDR Transition Period

On the 27 October 2022, the Court of Justice of the EU (“CJEU”) issued a preliminary ruling  regarding the definition of foods for special medical purposes (“FSMP”).  The CJEU held that for a food product to be classified as an FSMP, it must cover the increased or specific nutritional requirements caused by the disease.  It is not sufficient that the product counteracts the disease or alleviates its symptoms, as that would blur the lines between foods and medicinal products. 

1. Background to the Dispute

This ruling arose in the context of an action brought by Verband Sozialer Wettbewerb e.V. (“VSW”) against Orthomol pharmazeutische Vertriebs GmbH (“Orthomol”) regarding two Orthomol products classification as FSMPs.  This action was brought before the Landgericht Düsseldorf (Regional Court, Düsseldorf, Germany) at the first instance and was then appealed to the Oberlandesgericht Düsseldorf (Higher Regional Court, Düsseldorf, Germany) which then referred the case to the CJEU for a preliminary ruling. 

Continue Reading CJEU clarifies the Food for Special Medical Purposes Definition

The German regulation of pricing and reimbursement of pharmaceuticals is probably one of the most complicated legal areas in the entire world of life sciences laws. Now, the German government is adding another layer of complexity to the existing rules.

On 20 October 2022, the German Parliament has accepted the draft Act for the Financial Stabilization of the German Statutory Health Insurance System („GKV-FinStG“). The new act was subject to month-long controversial discussions within and outside of the Parliament and affected stakeholders. This was due to the fact that the new rules will affect almost all players within the healthcare system, including the health insurers, doctors, hospitals, pharmacies and, especially, the pharmaceutical industry. The new law encompasses significant cost-containment measures as the German healthcare system faces increased costs while, at the same time, the system suffers from a reduced inflow of funds.

Continue Reading Germany significantly tightens Drug Pricing and Reimbursement Laws

The UK has reaffirmed its commitment to leading the way in regulatory innovation in software as a medical device (“SaMD”) and artificial intelligence as a medical device (“AIaMD”).  On 17 October 2022, the UK Medicines & Healthcare products Regulatory Agency (“MHRA”) published its Guidance on “Software and AI as a Medical Device Change Programme – Roadmap.”  It builds on the Government response to consultation on the future regulation of medical devices in the UK and follows on from the Software and AI as a Medical Device Change Programme, which was published in 2021.  The MHRA has provided deliverables, which map out a course for change to the regulation of this sector.

Continue Reading Change is Coming for Software and AI Medical Devices in the UK

The Medical Device Coordination Group (“MDCG”) has published a new position paper (MDCG 2022-14) acknowledging the significant and urgent lack of capacity of EU notified bodies.  It acknowledges the risk that this could lead to many existing and new medical devices and in vitro diagnostic medical devices (“IVDs”) not undergoing timely conformity assessments under Regulation (EU) 2017/745 (the “MDR”) or Regulation (EU) 2017/746 (the “IVDR”) (together, the “Regulations”)).  In turn, this could mean patients miss out on access to, potentially, lifesaving medical devices and IVDs.  As such, the MDCG has suggested actions for mitigating such challenges.  Importantly, there is a focus on flexibility and pragmatism.

Continue Reading Notified body capacity needed! MDCG proposals recognize need to increase notified body capacity to ensure device availability

On 28 September 2022, the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) and European Federation of Pharmaceutical Industries and Associations (EFPIA) published joint guidelines concerning the use of social media and digital media channels by pharmaceutical companies (Joint Digital Guidelines).  IFPMA  and EFPIA are umbrella trade bodies for the innovative pharmaceutical industry on the global and European stages, respectively.

The Joint Digital Guidelines are timely.  Digital communications and the use of social media have become hot compliance topics for the pharmaceutical industry, both in Europe and globally.  Actors in the healthcare world increasingly use digital communication channels; many clinicians, patients and patient organizations actually prefer to receive content digitally.  With more content comes higher compliance risk.  Digital communications, particularly over social media, can spread fast across borders and are often publicly accessible. 

It is no surprise that a very significant number of pharmaceutical advertising cases in European markets now concern digital channels or social media.  This certainly reflects our experience; and this is an area where our pharmaceutical advertising experts are continually advising clients.

Continue Reading IFPMA and EFPIA Publish New Joint Guidance Note on Social Media and Digital Channels