Re-branding of pharmaceutical products essential for effective access to the UK market Nina O’Sullivan, King & Wood Mallesons The Court of Appeal has upheld an appeal by Doncaster Pharmaceuticals, finding that it was objectively necessary for it to re-brand imports of trospium chloride into the UK with the relevant UK trade mark in order to gain access to the UK market. In particular, the Court of Appeal considered that it was unrealistic to have expected Doncaster to adopt its own brand in order to compete in that market. Background Speciality European Pharma (SEP) is the exclusive UK licensee of a pharmaceutical product with the active ingredient trospium chloride, manufactured by Madaus GmbH. The patent for trospium chloride expired in 2009. The patent for an extended release version expires in 2024. Trospium chloride is sold under the trade mark Regurin in the UK, Céris in France and Urivesc in Germany. It is sold in two forms: ordinary release 20mg tablets and 60mg extended release capsules. The evidence was that 88.65% of prescriptions in the UK for the 20mg product are written generically, with only 8.61% written by reference to the Regurin brand. However, as the Court noted, with some surprise, a significant proportion of generic prescriptions are filled with the branded product. As it is still subject to patent protection, all of the 60mg product is dispensed under the brand Regurin XL (68% of prescriptions being written by reference to the generic name). Doncaster has, for many years, imported Céris (the 20mg product) into the UK from France, over-stickered with trospium chloride. However, after the trospium chloride patent expired in 2009, it began importing Céris into the UK re-branded with the trade mark Regurin. In 2011, it began importing Urivesc (the 60mg product) into the UK from Germany re-branded with the trade mark Regurin XL. Free movement of goods and enforcement of trade marks Article 34 of the Treaty on the Functioning of the European Union (TFEU) underpins the fundamental objective of the European single market of free movement of goods: quantitative restrictions between Member States on imports and measures having equivalent effect are prohibited. There is a carve out in Article 36 TFEU which provides that prohibitions or restrictions on imports which are justified on the 10 grounds of protection of intellectual property rights are legitimate, provided that those prohibitions or restrictions do not constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States. Accordingly, a trade mark owner cannot enforce its rights where this will lead to an ‘artificial partitioning of the market’. In Pharmacia & Upjohn SA v Paranova A/S, the Court of Justice of the European Union (CJEU) considered the conditions under which a parallel importer could replace the trade mark used in the country of export with that used by the brand owner in the country of import (subject also to it complying with the five Bristol-Myers Squibb (BMS) conditions). It decided that the relevant enquiry was: do the prevailing circumstances at the time of marketing in the Member State of import make it objectively necessary for the parallel importer to re-brand the product with the trade mark used in that Member State so that it can market the product? The necessity condition will be satisfied if the prohibition against the importer re-branding hinders effective access to the importing state’s market. The CJEU gave as an example where using the exporting state trade mark is forbidden in the importing state. In contrast, it would not be objectively necessary where the parallel importer was, by replacing the trade mark, solely attempting to secure a commercial advantage. In Boehringer Ingelheim v Swingward, the CJEU gave further guidance as to what could hinder effective access, including strong resistance from a significant proportion of consumers to relabelled pharmaceutical products. It also confirmed that a relevant impediment to access could exist where the barrier to entry was to a substantial part of the market or to a significant proportion of consumers. When assessing this question, a court can consider the parallel importer’s alternatives and whether they are realistic (e.g. trying to eliminate label-resistance). The trial Judge’s decision Asplin J had concluded that it was not objectively necessary for Doncaster to re-brand trospium chloride with Regurin in order to gain effective access to the trospium chloride market in the UK: it was effectively seeking to achieve greater margins and “piggy back” on SEP's investment and marketing strategy. In particular, the Judge considered the following to be important: l Doncaster had immediate access to that part of the market where trospium chloride is prescribed generically (90% for the 20mg product and 68% for the 60mg product); l There was no significant resistance by consumers or pharmacists to a product other than Regurin or an over-stickered product; The fact that only 8.62% of prescriptions specified Regurin 20mg was an objective indicator that effective access to the market was not hindered; The presence of the generic product Flotros on the market suggested effective access was not hindered unless use was made of Regurin; There were no “rules or structures” in the market creating a hindrance to effective access unless Regurin was used. In fact, NHS policy was strongly in favour of generic prescribing; In relation to the 60mg product, Doncaster could adopt a brand of its own to compete with Regurin XL (the Medecines & Healthcare products Regulatory Agency - MHRA requires the 60mg product to be dispensed under a brand name); As 70% of prescriptions for the 60mg product are written generically, Doncaster could compete for that 70% (which constituted effective access). l l l l l Court of Appeal Decision The Court of Appeal, in a decision given by Floyd LJ, decided that, for both the 20mg and 60mg product, Doncaster was hindered from reaching a substantial part of the market for trospium chloride in the UK, at both the prescribing doctor and pharmacist level. First, the UK rule that a branded prescription could only be filled by the branded product meant that it was necessary to re-brand in order to get access to that part of the market. Further, whilst the Court rejected Doncaster’s submission that it was legitimate to look at the percentage by value of the prescription market, it accepted its argument that the percentages of prescriptions for the branded product were underestimates, given the persistent practice of filling generic prescriptions