The Government has recently imposed restrictions on the parallel export of certain drugs from the UK to the EEA. At the moment, parallel imports tend to flow into the UK, where goods can be bought inexpensively in other EU member states and resold at a higher price in the UK. As the pound continues to weaken, the tide has recently turned and we are seeing more parallel exports. As a result, and particularly in response to the ABPI’s call for ministers to restrict parallel exports and attempt to stem the flow of drugs out of the UK, the Government has now announced a ban on drug exports of the medicines considered to be in shortest supply across the country. The export ban lists 24 drugs in total, including 19 hormone replacement therapy drugs, adrenaline pens for severe allergies, hepatitis B vaccines and a number of contraceptives. It is not yet clear how long this ban will stay in place for.

Currently, under EU legislation, for the UK Government to impose a temporary export ban to prevent stockpiled drugs being sold out of the UK, it would need to do so on the basis of Article 36 of the Treaty on the Functioning of the European Union (TFEU). Article 36 provides that the provisions of Articles 34 and 35 (which themselves prohibit restrictions on imports and exports between Member States) “shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of … the protection of health and life of humans … Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.”

Article 36 allows for a limited exception to the prohibition of any restrictions of the free movement of goods within the EU only where the public health justification is:

  1. genuine (i.e. designed to achieve a real and stated public policy perspective), and
  2. proportionate (i.e. the measure is appropriate to achieve the stated public health objective and not more restrictive than is necessary to achieve its legitimate objective).

A number of EU Member States have applied to the Commission to restrict exports on the basis of Article 36, with varying success. For example, the Belgian Constitutional Court is currently considering the legitimacy of an amendment to the Medicines Act made earlier this year by the Belgian Parliament which sought to tackle medicines shortages in Belgian pharmacies.

Another recent example is Romania: on 13 September 2019, the Romanian Ministry of Health announced, as a result of a public consultation, that it would suspend the exportation of 127 medicines for a six month period. The targeted medicines all run an increased risk of shortage and are indicated for the treatment of cancer and transplant patients. The measure will be notified to the European Commission and is expected to be blessed given the short-term, targeted, nature of the proposed restriction.

The EU has already made clear that, if the UK leaves the EU without a deal, parallel exports into the EU would not be possible as the UK would be outside of the single market. Ahead of Brexit, any restriction imposed by the UK on exports would need to be genuine and proportionate, meaning a temporary, targeted restriction could constitute a legitimate way of preventing the drugs stockpiles in the UK from being run down ahead of Brexit. As the precise details of the Government’s new ban are still to be released, in particular its duration, it is not yet clear whether it would be deemed to be genuine and proportionate for the purposes of Article 36.

For further information please contact Iona Silverman or Julia Gillert of our London office.

Author

Iona is a Senior Associate in the London IP team. She has significant experience handling intellectual property aspects of transactions. Iona regularly assists clients in the healthcare industry on licensing, joint development agreements, IP aspects of acquisitions and disposals as well as trade mark portfolio management. Iona finds her background in science invaluable to understanding clients in the healthcare and technology sectors.

Author

Julia Gillert is a Senior Associate in the Corporate Department of Baker & McKenzie's London office and is a key member of the Healthcare industry group within the London office and European and Global networks. Julia advises both domestic and international companies in the med-tech, pharma and healthcare sectors on a wide range of regulatory and general compliance matters. Julia has contributed to a variety of regulatory healthcare related publications and practice handbooks and co-edits the firm's European Healthcare Newsletter. Julia sits on the ABHI's Legal Issues Committee.

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