Rebranding generics as branded medicines – CJEU issues new guidance
The CJEU has provided welcome new guidance on when parallel importers can rebrand generic medicines with the original trade mark of the reference medicinal product.
Its ruling in Impexeco NV v Novartis AG and PI Pharma NV v Novartis AG (Joined cases C‑253/20 and C‑254/20) is one of series of landmark judgments concerning parallel imports of pharmaceuticals released by the CJEU last month. (See our article here for details of these other judgments which put parallel imports and new anti-tampering devices under the spotlight.)
Facts – overview
The Novartis pharmaceutical group includes the Sandoz division which manufactures the generic medicinal products. Novartis challenged the rebranding of two of its generic medicines in Belgium by Impexeco and PI Pharma, Belgium companies active in the parallel trade in medicinal products.
The key facts were as follows:
- Novartis sold the two branded reference products, FEMARA and RITALIN/RILATINE, in the Netherlands and Belgium. (Case 253/20 concerns the first product and Case 254/20 the second.)
- At the same time, Sandoz (Novartis’ generics division) sold in the Netherlands a generic version of the Novartis reference products containing the same active pharmaceutical ingredient as the branded products. They were sold using the international nonproprietary name (INN) nomenclature, combined with the Sandoz company name.
- The parallel importers imported the generic Sandoz products from the Netherlands. They then repackaged and rebranded them as the Novartis’ reference products (ie using the trade marks FEMARA and RILATINE) to market them in Belgium.
Novartis sought injunctions before the Brussels Commercial Court and were successful. On appeal, the Brussels Court of Appeal referred several questions to the CJEU.
Questions to the CJEU
The Belgium court in essence asked the CJEU whether the owner of trade marks for both a reference medicinal product and a generic medicinal product could stop parallel imports of the generic products, where that medicinal product had been repackaged in new outer packaging to which the trade mark of the corresponding reference medicinal product had been affixed.
Putting it in simple terms, the CJEU said “yes”. An owner (such as Novartis) could stop parallel imports of the generic products, where that medicinal product had been repackaged in new outer packaging to which the trade mark of the corresponding reference medicinal product had been affixed, unless:
- The two medicinal products were identical in all respects; and
- The replacement of the trade mark satisfied the well-known “BMS conditions” for the repackaging of medicines.
Taking these criteria in turn:
- Need for identical medicines
The CJEU emphasised that only a medicinal product which is identical in all respects to another medicinal product can be repackaged in new outer packaging bearing the trade mark of the other medicinal product. This could occur when the reference medicinal product and a generic medicinal product are manufactured by the same entity (or by economically linked entities) and they comprise the same product marketed under two different sets of rules.
The court added that differences in the rules for the two identical products and how they are perceived by health professionals or patients was not sufficient to consider them different. Otherwise brand owners could contribute to an artificial partitioning of the markets between EU countries by marketing an identical medicinal product sometimes as a reference medicinal product and sometimes as a generic medicinal product.
However, the CJEU gave “identity” a strict interpretation. Generics are not identical to branded medicines where they differ over the pharmaceutical form, the chemical form of the active substance and its excipients.
Turning to the facts in these cases: it was agreed that the Novartis and Sandoz medicines in question were identical, so the second criterion came into play.
- The BMS conditions
A reminder of the BMS conditions
The BMS conditions will be familiar to many businesses in this space. In short, a pharmaceutical trade mark owner can oppose the repacking of it medicines in the EEA unless five conditions are met. These were originally set out in the landmark CJEU judgment in Bristol-Myers Squibb v Paranova (Joined Cases C-427/93, C-429/93 and C-436/93) and have evolved with subsequent CJEU judgments. (For details of these conditions see our earlier article].
In its judgment the CJEU looked at the first of the BMS conditions, the requirement that the rebranding is objectively necessary for commercialising the medicines in the import market.
The CJEU considered that where the parallel importer can market the generic medicinal product under its trade mark of origin, by adapting the packaging to satisfy the market requirements of the importing country, there is no objective “necessity” to rebrand. In this situation the free movement of goods (underpinning the rules on trade mark exhaustion) is not threatened and therefore can’t come before the brand owner’s legitimate interests.
The court noted that a country can’t generally refuse a parallel import licence for a generic medicinal product if the corresponding reference product already has a marketing authorisation in that country. The parallel importer can then market the generic product under its trade mark of origin, and does not need to rebrand.
Similarly, the CJEU said that there was no objective “necessity” if the rebranding is exclusively motivated by the pursuit of an economic advantage. For example, where a parallel importer seeks to take advantage of the reputation of the trade mark of a reference medicinal product, or, to place a product in a more profitable category.
This judgment of the CJEU, together with its other judgments released on the same day and discussed in our other article, provide clear guidance for brand owners and parallel importers in the pharmaceutical sector. The CJEU’s answers to the Brussels court’s questions (with its detailed analysis) can be viewed as a checklist to apply and a further refinement of the well-known BMS conditions.
The case will now be remitted to the Brussels Court of Appeal. It will be interesting to see how the Brussels court interprets the CJEU’s judgment as it has not been left with much flexibility.