Accord Healthcare Ltd & Anor v Astellas Pharma GmbH & Anor [2015] EWHC 3676 (Ch)

[2015] EWHC 3676 (Ch)Case No HC 2015 003169
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 16/12/2015
Before
MR. JUSTICE MORGAN
Between
(1) ACCORD HEALTHCARE LIMITED(2) INTAS PHARMACEUTICALS LIMITED(a company incorporated under the laws of India)Claimant(1) ASTELLAS PHARMA GmbH(a company incorporated under the laws of theFederal Republic of Germany)(2) NAPP PHARMACEUTICALS LIMITEDDefendantMR. IAIN PURVIS QC, MS. JEMIMA STRATFORD QC and MS. KATHRYN PICKARD (instructed by Taylor Wessing LLP) appeared for Claimants.MS. KELYN BACON QC and MR. GERARD ROTHSCHILD (instructed by Bristows LLP) appeared for the Defendants.Hearing Hearing dates: 24 – 27 and 30 November, 1 – 3 December 2015
Approved JudgmentI direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic..............................MR JUSTICE MORGAN

Introduction

[1]I will refer to the Claimants collectively as “Accord”. Accord manufactures and supplies pharmaceuticals worldwide. The First Claimant is responsible for the European arm of the Accord business and is wholly owned by the Second Claimant.[2]The First Defendant is a member of the Astellas Pharma group of companies. For some years, it had marketed a drug under the name “Ribomustin” and more recently it has marketed the same drug under the name “Levact”. The Second Defendant markets and distributes Levact in the United Kingdom under licence from the First Defendant.[3]Accord is seeking to obtain marketing authorisations in the United Kingdom, and elsewhere, for a drug the active ingredient of which is an anti-tumour chemotherapeutic agent known as “bendamustine”. Accord’s drug is a generic of Ribomustin. Indeed, Accord has been successful in obtaining such marketing authorisations in a number of European countries and, just before the trial of this action commenced, the United Kingdom authority, the Secretary of State for Health, acting through an executive agency, the Medicines and Healthcare Products Regulatory Agency (“the MHRA”), granted or purported to grant a marketing authorisation in the United Kingdom for Accord’s generic drug. Astellas has consistently challenged these authorisations which have been granted to Accord in other European countries and during the course of the trial of this action, Astellas has commenced judicial review proceedings against the Secretary of State for Health seeking an order quashing the purported marketing authorisation granted to Accord by the MHRA.[4]At all material times, the granting of marketing authorisations for medicinal products has been governed by Directive 2001/83/EC of the European Parliament and of the Council (“the Directive”), which has been given effect in the United Kingdom, most recently by the Human Medicines Regulations 2012, made under the Medicines Act 1968.[5]The Directive lays down, in particular by Article 8 and Annex 1, detailed requirements which must be met by an applicant for a marketing authorisation for a medicinal product. In particular, Article 8(3)(i) normally requires an applicant to submit to the competent authority the results of pre-clinical tests and clinical trials so that the competent authority can form an assessment of the safety and efficacy of the medicinal product. However, by way of derogation from this requirement, Article 10 allows an applicant for a marketing authorisation to make its application, without complying with Article 8(3)(i), if its application is for a generic of a reference medicinal product which has been authorised in accordance with the Directive for a period of time.[6]This derogation is of obvious benefit to the applicant for an authorisation of a generic drug as it saves it the considerable expense and time involved in carrying out pre-clinical tests and clinical trials. It is also in the public interest to avoid the repetition of tests on humans or animals. However, this derogation can work to the disadvantage of the innovative drug company, which obtained the initial authorisation for the reference medicinal product. That drug company had to incur the expense and time involved in pre-clinical tests and clinical trials and it might be considered to be inappropriate to allow a generic drug company immediately to obtain a marketing authorisation for a generic of the same drug. This potential disadvantage is recognised by the Directive by imposing a period of delay, following the grant of the initial marketing authorisation, before the generic drug company is able to take advantage of the Article 10 derogation from Article 8(3)(i). Of course, if the generic drug company wants a marketing authorisation for its drug without waiting for the period of delay imposed by the Directive, it can always do its own pre-clinical tests and clinical trials. But if it wishes to avoid the expense and time involved in such tests and trials, then it must wait for the period of delay imposed by the Directive to elapse. The period of delay which is relevant in the present case is ten years between the issue of the marketing authorisation for the reference medicinal product and the first marketing of the generic product. This period of delay is typically referred to as the data exclusivity period, the idea being that this is the period of protection conferred on the innovative drug company to allow it to benefit exclusively from the data it assembled by way of pre-clinical tests and clinical trials.

The issues

[7]As explained, Astellas had marketed its drug Ribomustin for many years. Accord contends that Astellas obtained an initial marketing authorisation, in accordance with the Directive, for Ribomustin in July 2005 from the German competent authority, to which I will refer as “BfArM”. Accord therefore contends that the period of delay before the derogation in Article 10 can operate begins in July 2005. This is denied by Astellas. It contends that the action of BfArM in July 2005 did not amount to a marketing authorisation in accordance with the Directive. Astellas says that the first marketing authorisation which is relevant for present purposes is one granted by the French competent authority for Levact in July 2010 so that the period of delay, before the derogation in Article 10 applies, runs from that date.[8]Astellas puts forward two reasons why the action of BfArM in July 2005 did not amount to a marketing authorisation for Ribomustin in accordance with the Directive. The first is that the relevant decision of BfArM did not grant an authorisation “in accordance with the Directive” but, at most, granted an approval in accordance with a German ordinance which did not properly transpose into German law the provisions of the Directive. The arguments in relation to this first contention raise matters, principally if not exclusively, of European law. Astellas’ second argument is very different. It relies on the fact that it brought an appeal against a part of the BfArM decision of July 2005. It says that the appeal had the effect of suspending the operation of that decision and the appeal was later settled, after Astellas had obtained a marketing authorisation for Levact, with the result that the July 2005 decision was effectively nullified with the result that Accord cannot rely upon it as an initial marketing authorisation. This second argument raises matters of German administrative and procedural law on which I heard expert evidence from two German lawyers.

Procedural matters

[9]I was most concerned throughout the trial of this action as to the procedure adopted by the parties to seek the court’s determination of the issues between them. In this action, Accord seeks declaratory relief and Astellas counterclaims declaratory relief in essentially the opposite sense. Before the action began, Accord had already obtained marketing authorisations in other European countries but those authorisations were being challenged by Astellas. Around the same time as bringing this action, Accord applied to the MHRA for a marketing authorisation in the United Kingdom and it was predicted, as turned out to be the case, that Astellas would make representations to the MHRA against the grant of such an authorisation. No one sought to join the MHRA as a party to these proceedings. On the Friday before the trial of this action began on 24 November 2015, the MHRA did grant, or purport to grant, a marketing authorisation to Accord. During the course of the trial, Astellas issued proceedings for judicial review seeking an order quashing the decision of the MHRA. Further, Astellas applied in the Administrative Court for interim relief under CPR 54.10 and I heard that application in the course of the trial of the Chancery proceedings.[10]There is an obvious question as to whether a claim and a counterclaim for declaratory relief in the High Court is the appropriate procedure to use when the essential dispute between the parties is whether it was open to the MHRA to make a public law decision to grant a marketing authorisation to Accord. Before the MHRA made its decision, it could be said that the court should not itself decide the issues between the parties when it was for the MHRA to determine which issues arose and how it considered they ought to be decided. Now that the MHRA has decided that it is appropriate to grant Accord a marketing authorisation it might be said that the appropriate way for Astellas to challenge that decision was to seek judicial review of it. The procedure on a judicial review could be quite different from the procedure which has been followed by the parties in the Chancery proceedings. Astellas can only pursue an application for judicial review if the court considers that it should be granted permission to do so. In the Chancery proceedings, the parties have simply brought their claim and counterclaim without having to obtain any permission from the court and accordingly have side-stepped the requirement of permission for a judicial review. Further, in the Chancery proceedings, the parties have proceeded on the basis that the issues between them will be the subject of oral evidence and cross-examination.[11]On the first day of the trial, my very strong initial reaction to these considerations was that the Chancery proceedings should not go ahead and any challenge by Astellas to the decision of the MHRA would have to proceed by way of an application for judicial review. Accordingly, I adjourned the trial for a day to allow the parties to consider with the MHRA how the matter might be progressed and even to consider the possibility that the time set aside for this trial could be used by appropriate proceedings in which the MHRA could participate. By the next day, it was clear that it was not realistic to expect the MHRA to participate in any hearing to determine the issues raised by the parties, or if different, the issues which might arise in appropriate judicial review proceedings.[12]My concerns as to the procedure being followed by the parties increased when I considered what was said by the MHRA when it was notified of the existence of the present proceedings on the first day of the trial. On 24 November 2015, the MHRA wrote to the court making some preliminary comments. Those comments suggested to me that the issues which would arise in a judicial review would be different from the issues which I was being asked to decide in the Chancery proceedings. It might emerge that the issues I was being asked to decide would simply not arise in the judicial review proceedings and/or that I was not being asked to decide the issues which would arise in the judicial review proceedings. Thus, it might emerge that my decision was irrelevant to whether Accord had a valid marketing authorisation in the United Kingdom and, further, it might emerge that whichever party lost in the Chancery proceedings could nonetheless argue a different case in the judicial review proceedings.[13]When I put my concerns to the parties, they expressed considerable dismay and unhappiness at the idea of the Chancery proceedings being adjourned. They had prepared for trial at considerable expense. I was told that in the judicial review proceedings there might be an issue as to whether Accord had been granted a valid marketing authorisation in Austria which might be the subject of mutual recognition in the United Kingdom pursuant to Article 28 of the Directive. However, Accord’s marketing authorisation in Austria was being challenged by Astellas in Austria and a final decision of the Austrian courts might not be handed down until 2017. That might mean that one would simply not know the fate of the judicial review of the MHRA decision until after that time. It was suggested by Accord that if I determined the Chancery proceedings in its favour, this would greatly simplify its case for a marketing authorisation in the United Kingdom and it might even be the case that Astellas would not then pursue its application for judicial review of the MHRA decision. I was also told that the issues raised in the Chancery proceedings have been raised in a number of European countries and a decision of the English court after a full trial involving, in particular, an examination of the German law disputed matters, would be of real value in other jurisdictions. I was reminded that the court had held a case management conference in this action and although questions had been asked about the procedure being adopted, the court had not stayed the action and, indeed, had assisted the parties by ordering expedition. I was also told that the issue as to Accord’s ability to supply the generic drug in the United Kingdom and to compete with Astellas in a number of imminent tenders would be clarified by a decision in the Chancery proceedings. I was also told that this last question engaged the public interest as the outcome of these proceedings would, or might, affect the price which the National Health Service had to pay for the relevant drug.[14]I have also taken account of one other matter in the course of considering the procedural problems created by the Chancery proceedings. On 26 November 2015, Astellas issued proceedings in the Administrative Court seeking judicial review of the MHRA decision. Astellas also wished to have interim relief in those proceedings, in the form of an order under CPR 54.10 suspending the decision. The MHRA was given short notice of the application for interim relief and instructed counsel to attend a hearing of that application. I refused interim relief for the reasons I gave in a short judgment dealing with that matter. By reason of this involvement in the application for interim relief, the MHRA was made aware of the existence of the Chancery proceedings and the stage they had reached. The MHRA did not suggest that these proceedings were an abuse of process as they involved the determination of issues which should be dealt with by way of judicial review proceedings. I should not give too much weight to this consideration because the MHRA was brought to court to deal only with an urgent application for interim relief and it was not given time to assess whether there were possible consequences relevant to it of these proceedings to which it was not a party. Nonetheless, for what it is worth, I note that the MHRA has not raised any objection of its own to these proceedings continuing.[15]In the end, I considered that the right thing for me to do was to continue with the trial of the Chancery proceedings unless I felt that I ought to stop the proceedings as an abuse of the process of the court. In a case where the only parties to the proceedings were united in stressing the importance to them of the proceedings continuing and in the absence of anyone, such as the MHRA, suggesting otherwise, I considered that I would be going too far if I, of my own initiative, refused to try the action. Accordingly, I did not refuse to try it. Nonetheless, I wish to stress that the procedure adopted in this case is not a procedure which has been approved by the court as one which should be followed in other cases.[16]There is one final matter under this heading. The trial of this action was expedited. In the course of closing submissions, I was pressed to give my judgment as soon as possible in view of impending events which would be, or might be, affected by my decision. The arguments of the parties were very fully explored in the course of the hearing and the parties made a number of submissions in the alternative and various possibilities were examined and discussed. In view of the alleged urgency, I have prepared a judgment in as short a time as possible. I have therefore dealt with all of the matters which I consider that I have to deal with in order to decide the issues between the parties. I have attempted to deal with the issues as concisely as possible and I have not felt it appropriate to deal with all of the extraneous points which have been argued. In coming to my conclusions, I have fully considered the evidence. The extent to which that evidence was relevant to an issue which I have to decide and the extent to which I accepted that evidence will be apparent from the reasons which I give for my conclusions.

The Directive

[17]The Directive had been amended on a number of occasions prior to July 2005 and was further amended after that date. In this judgment, I will refer to the terms of the Directive as they stood in July 2005.[18]The Recitals to the Directive explain a number of matters, in particular:(1) The essential aim of the rules must be to safeguard public health but the attainment of this aim must not hinder the development of the pharmaceutical industry or trade in medicinal products within the Community: Recitals(2) and (3); (2) The concepts of harmfulness and therapeutic efficacy should be examined in relation to each other; an application for a marketing authorisation under the Directive must be supported by documents which demonstrate that potential risks are outweighed by the therapeutic efficacy of the product: Recital (7);(3) Standards and protocols for tests and trials were an effective means of control and uniform rules as to tests and trials and the compilation of dossiers were appropriate: Recital (8);(4) It was desirable to spell out the circumstances in which results of test and clinical trials did not have to be provided in the case of a product which was essentially similar to an authorised product while ensuring that innovative firms were not placed at a disadvantage: Recital (9);(5) There were reasons of public policy for not conducting repetitive tests on humans or animals without overriding cause: Recital (10).[19]Articles 6 to 12 were under the heading:
“Marketing Authorisation”
. Article 6(1) provided:
“Article 6 1. No medicinal product may be placed on the market of a Member State unless a marketing authorisation has been issued by the competent authorities of that Member State in accordance with this Directive or an authorisation has been granted in accordance with Regulation (EEC) No 2309/93. When a medicinal product has been granted an initial marketing authorisation in accordance with the first subparagraph, any additional strengths, pharmaceutical forms, administration routes, presentations, as well as any variations and extensions shall also be granted an authorisation in accordance with the first subparagraph or be included in the initial marketing authorisation. All these marketing authorisations shall be considered as belonging to the same global marketing authorisation, in particular for the purpose of the application of Article 10(1).”
[20]Article 8 provided:
“Article 8 1. In order to obtain an authorization to place a medicinal product on the market regardless of the procedure established by Regulation (EEC) No 2309/93, an application shall be made to the competent authority of the Member State concerned. 2. A marketing authorization may only be granted to an applicant established in the Community. 3. The application shall be accompanied by the following particulars and documents, submitted in accordance with Annex I: (a) Name or corporate name and permanent address of the applicant and, where applicable, of the manufacturer. (b) Name of the medicinal product. (c) Qualitative and quantitative particulars of all the constituents of the medicinal product, including the reference to its international non-proprietary name (INN) recommended by the WHO, where an INN for the medicinal product exists, or a reference to the relevant chemical name. (ca) Evaluation of the potential environmental risks posed by the medicinal product. This impact shall be assessed and, on a case-by-case basis, specific arrangements to limit it shall be envisaged. (d) Description of the manufacturing method. (e) Therapeutic indications, contra-indications and adverse reactions. (f) Posology, pharmaceutical form, method and route of administration and expected shelf life. (g) Reasons for any precautionary and safety measures to be taken for the storage of the medicinal product, its administration to patients and for the disposal of waste products, together with an indication of potential risks presented by the medicinal product for the environment. (h) Description of the control methods employed by the manufacturer. (i) Results of: — pharmaceutical (physico-chemical, biological or microbiological) tests, — pre-clinical (toxicological and pharmacological) tests, — clinical trials. (ia) A detailed description of the pharmacovigilance and, where appropriate, of the risk management system which the applicant will introduce. (ib) A statement to the effect that clinical trials carried out outside the European Union meet the ethical requirements of Directive 2001/20/EC. (j) A summary, in accordance with Article 11, of the product characteristics, a mock-up of the outer packaging, containing the details provided for in Article 54, and of the immediate packaging of the medicinal product, containing the details provided for in Article 55, together with a package leaflet in accordance with Article 59. (k) A document showing that the manufacturer is authorised in his own country to produce medicinal products. (l) Copies of any authorisation obtained in another Member State or in a third country to place the medicinal product on the market, together with a list of those Member States in which an application for authorisation submitted in accordance with this Directive is under examination. Copies of the summary of the product characteristics proposed by the applicant in accordance with Article 11 or approved by the competent authorities of the Member State in accordance with Article 21. Copies of the package leaflet proposed in accordance with Article 59 or approved by the competent authorities of the Member State in accordance with Article 61. Details of any decision to refuse authorisation, whether in the Community or in a third country, and the reasons for such a decision. This information shall be updated on a regular basis. (m) A copy of any designation of the medicinal product as an orphan medicinal product under Regulation (EC) No 141/2000 of the European Parliament and of the Council of 16 December 1999 on orphan medicinal products, accompanied by a copy of the relevant Agency opinion. (n) Proof that the applicant has the services of a qualified person responsible for pharmacovigilance and has the necessary means for the notification of any adverse reaction suspected of occurring either in the Community or in a third country. The documents and information concerning the results of the pharmaceutical and pre-clinical tests and the clinical trials referred to in point (i) of the first subparagraph shall be accompanied by detailed summaries in accordance with Article 12.”
[21]Article 10 provided:
“Article 10 1. By way of derogation from Article 8(3)(i), and without prejudice to the law relating to the protection of industrial and commercial property, the applicant shall not be required to provide the results of pre-clinical tests and of clinical trials if he can demonstrate that the medicinal product is a generic of a reference medicinal product which is or has been authorised under Article 6 for not less than eight years in a Member State or in the Community. A generic medicinal product authorised pursuant to this provision shall not be placed on the market until ten years have elapsed from the initial authorisation of the reference product. The first subparagraph shall also apply if the reference medicinal product was not authorised in the Member State in which the application for the generic medicinal product is submitted. In this case, the applicant shall indicate in the application form the name of the Member State in which the reference medicinal product is or has been authorised. At the request of the competent authority of the Member State in which the application is submitted, the competent authority of the other Member State shall transmit within a period of one month, a confirmation that the reference medicinal product is or has been authorised together with the full composition of the reference product and if necessary other relevant documentation. The ten-year period referred to in the second subparagraph shall be extended to a maximum of eleven years if, during the first eight years of those ten years, the marketing authorisation holder obtains an authorisation for one or more new therapeutic indications which, during the scientific evaluation prior to their authorisation, are held to bring a significant clinical benefit in comparison with existing therapies. 2. For the purposes of this Article: (a) ‘reference medicinal product’ shall mean a medicinal product authorised under Article 6, in accordance with the provisions of Article 8; (b) ‘generic medicinal product’ shall mean a medicinal product which has the same qualitative and quantitative composition in active substances and the same pharmaceutical form as the reference medicinal product, and whose bioequivalence with the reference medicinal product has been demonstrated by appropriate bioavailability studies. The different salts, esters, ethers, isomers, mixtures of isomers, complexes or derivatives of an active substance shall be considered to be the same active substance, unless they differ significantly in properties with regard to safety and/or efficacy. In such cases, additional information providing proof of the safety and/or efficacy of the various salts, esters or derivatives of an authorised active substance must be supplied by the applicant. The various immediate-release oral pharmaceutical forms shall be considered to be one and the same pharmaceutical form. Bioavailability studies need not be required of the applicant if he can demonstrate that the generic medicinal product meets the relevant criteria as defined in the appropriate detailed guidelines. 3. In cases where the medicinal product does not fall within the definition of a generic medicinal product as provided in paragraph 2(b) or where the bioequivalence cannot be demonstrated through bioavailability studies or in case of changes in the active substance(s), therapeutic indications, strength, pharmaceutical form or route of administration, vis-à-vis the reference medicinal product, the results of the appropriate pre-clinical tests or clinical trials shall be provided. 4. Where a biological medicinal product which is similar to a reference biological product does not meet the conditions in the definition of generic medicinal products, owing to, in particular, differences relating to raw materials or differences in manufacturing processes of the biological medicinal product and the reference biological medicinal product, the results of appropriate pre-clinical tests or clinical trials relating to these conditions must be provided. The type and quantity of supplementary data to be provided must comply with the relevant criteria stated in Annex I and the related detailed guidelines. The results of other tests and trials from the reference medicinal product's dossier shall not be provided. 5. In addition to the provisions laid down in paragraph 1, where an application is made for a new indication for a well-established substance, a non-cumulative period of one year of data exclusivity shall be granted, provided that significant pre-clinical or clinical studies were carried out in relation to the new indication. 6. Conducting the necessary studies and trials with a view to the application of paragraphs 1, 2, 3 and 4 and the consequential practical requirements shall not be regarded as contrary to patent rights or to supplementary protection certificates for medicinal products.”
[22]Article 19 provided:
“Article 19 In order to examine the application submitted in accordance with Articles 8, 10, 10a, 10b and 10c, the competent authority of the Member State: 1. must verify whether the particulars submitted in support of the application comply with the said Articles 8, 10, 10a, 10b and 10cand examine whether the conditions for issuing an authorization to place medicinal products on the market (marketing authorization) are complied with. 2. may submit the medicinal product, its starting materials and, if need be, its intermediate products or other constituent materials, for testing by an Official Medicines Control Laboratory or a laboratory that a Member State has designated for that purpose in order to ensure that the control methods employed by the manufacturer and described in the particulars accompanying the application in accordance with Article 8(3)(h) are satisfactory. 3. may, where appropriate, require the applicant to supplement the particulars accompanying the application in respect of the items listed in the Articles 8(3), 10, 10a, 10b and 10c. Where the competent authority avails itself of this option, the time limits laid down in Article 17 shall be suspended until such time as the supplementary information required has been provided. Likewise, these time limits shall be suspended for the time allowed the applicant, where appropriate, for giving oral or written explanation.”
[23]Article 22 provided:
“Article 22 In exceptional circumstances and following consultation with the applicant, the authorisation may be granted subject to a requirement for the applicant to meet certain conditions, in particular concerning the safety of the medicinal product, notification to the competent authorities of any incident relating to its use, and action to be taken. This authorisation may be granted only for objective, verifiable reasons and must be based on one of the grounds set out in Annex I. Continuation of the marketing authorisation shall be linked to the annual reassessment of these conditions. The list of these conditions shall be made publicly accessible without delay, together with deadlines and dates of fulfilment.”
[24]Article 26 provided:
“Article 26 1. The marketing authorisation shall be refused if, after verification of the particulars and documents listed in Articles 8, 10, 10a, 10b and 10c, it is clear that: (a) the risk-benefit balance is not considered to be favourable; or (b) its therapeutic efficacy is insufficiently substantiated by the applicant; or (c) its qualitative and quantitative composition is not as declared. 2. Authorisation shall likewise be refused if any particulars or documents submitted in support of the application do not comply with Articles 8, 10, 10a, 10b and 10c. 3. The applicant or the holder of a marketing authorisation shall be responsible for the accuracy of the documents and the data submitted.”
[25]Articles 27 to 39 provided for two procedures for applications for a marketing authorisation to be granted in two or more Member States. These procedures were described as the mutual recognition procedure and the decentralised procedure (as distinct from the centralised procedure under Regulation (EC) No 726/2004 (formerly under Regulation (EEC) No 2309/93)).[26]Articles 111 to 119 were under the heading:
“Supervision and Sanctions”
. Article 112 provided:
“Article 112 Member States shall take all appropriate measures to ensure that the holder of the marketing authorization for a medicinal product and, where appropriate, the holder of the manufacturing authorization, furnish proof of the controls carried out on the medicinal product and/or the ingredients and of the controls carried out at an intermediate stage of the manufacturing process, in accordance with the methods laid down in Article 8(3)(h).”
[27]Article 116 provided:
“Article 116 The competent authorities shall suspend, revoke or vary a marketing authorisation if the view is taken that the product is harmful or that it lacks therapeutic efficacy, or that the risk-benefit balance is not positive under the normal conditions of use, or that its qualitative and quantitative composition is not as declared. Therapeutic efficacy is lacking when it is concluded that therapeutic results cannot be obtained from the medicinal product. An authorisation shall also be suspended, revoked, withdrawn or varied where the particulars supporting the application as provided for in Article 8 or Articles 10, 10a, 10b, 10c and 11 are incorrect or have not been amended in accordance with Article 23 or where the controls referred to in Article 112 have not been carried out.”
[28]Annex 1 to the Directive (referred to in Article 8 and elsewhere) deals with a number of topics including, in Part I, requirements as to the dossier to be submitted by an applicant for a marketing authorisation. Part I refers to a number of modules. Module 3 refers to various pieces of information including information as to the manufacturing of the product and its quality. Module 4 refers to non-clinical reports and Module 5 refers to clinical study reports.

Some points on the Directive

[29]Article 6 refers to a marketing authorisation being granted in accordance with the Directive or in accordance with Regulation (EEC) No 2309/93. This Regulation provided for a centralised procedure (as distinct from the decentralised procedure under Article 28 of the Directive) to be followed in certain cases. This Regulation has now been replaced by Regulation (EC) No 726/2004.[30]Article 6 refers to a “global marketing authorisation”. The provisions of Article 6 in this respect conform to earlier case law substantially to the same effect: the position is described in Novartis Europharm Ltd v Commission Case T-472/12 at [45]. In the present case, if the decision of BfArM in July 2005 had been a marketing authorisation in accordance with the Directive then it was “an initial marketing authorisation” within Article 6 and the later authorisations for Levact are to be regarded as belonging to the same global authorisation as the July 2005 authorisation, in particular for the purposes of Article 10(1).[31]When Astellas applied to BfArM for a marketing authorisation which led to the grant in July 2005, Astellas had to comply, and did comply, with the requirements of Article 8(3)(i) as regards pre-clinical tests and clinical trials.[32]For the purposes of Article 10, it is accepted that the drug for which Accord seeks a marketing authorisation is a generic of the drug which was approved by BfArM’s decision in July 2005, so that the drug which was then approved will be a reference medicinal product for the purposes of Article 10 if the decision in July 2005 amounted to a marketing authorisation in accordance with the provisions of Article 8. In such a case, Accord will be able to rely on the derogation, pursuant to Article 10, from Article 8(3)(i) and so will be able to make an application for a marketing authorisation for its generic drug without having to provide the results of pre-clinical tests and of clinical trials for that generic drug.

Ribomustin

[33]Bendamustine is a chemotherapeutic agent that was first synthesised in the early 1960s by the Institute of Microbiology and Experimental Therapy in the German Democratic Republic (the GDR). It was first marketed in 1971, in the GDR, when it was authorised for use to treat a wide range of cancers.[34]In 1990, Germany was re-unified. Transitional arrangements were put in place so that pharmaceuticals which had been on the market in the GDR could remain on the market throughout Germany. The relevant legal provisions will be described later in this judgment. In summary, bendamustine was deemed to have a marketing authorisation without any submission of data, in particular without the submission of data as to pre-clinical tests or clinical trials. The deemed authorisation was given the number 3000336. The transitional arrangements were only intended to be temporary so that it was necessary for the holder of the deemed authorisation to apply under a re-registration procedure known as the Nachzulassung procedure. Zulassung means licence or permission or registration and Nachzulassung carries the idea of a permission or registration after the event. The process was described in the evidence as being a retrospective process or an a posteriori process. As will be seen, the European Commission required Germany to revise its Nachzulassung procedure so that it satisfied the requirements of the Directive and, following revisions made by Germany, the European Commission appeared to be satisfied that the procedure did so comply.[35]In June 1991, the holder of the deemed authorisation (a company which later became part of the Astellas group) submitted a Nachzulassung application. In 1993, it voluntarily limited the indications for bendamustine to five, namely: non-Hodgkin’s lymphoma (“NHL”), multiple myeloma (“MM”), chronic lymphatic leukaemia (“CLL”), breast cancer and Hodgkin’s disease.[36]Subsequently, in 2001 and 2002, Astellas submitted further scientific and quality data to BfArM in support of its Nachzulassung application. It had initially applied for authorisation for all five indications referred to above. Following objections from BfArM, Astellas withdrew its application in respect of Hodgkin’s disease in 2004.[37]On 19 July 2005, BfArM issued a re-registration of bendamustine, under the brand name Ribomustin, pursuant to the Nachzulassung procedure. However, BfArM only authorised Ribomustin for two out of the four indications for which authorisation had been sought. It authorised use for NHL and MM but it refused authorisation for use for CLL and breast cancer.[38]The BfArM authorisation was given the number 3000336.00.00. It was expressed to be based on the documents submitted and the information given by the applicant. It stated that the product was not to be stored at over 25 degrees centigrade. The authorisation contained four annexes. I was provided with copies of Annexes 1, 2 and 3 at my request but neither party submitted that they contained anything relevant to the present dispute. The authorisation contained a note as to Annexes 1 to 3 which referred to further requirements as to the separation of certain pieces of information and a requirement to submit further information under the German Medicines Act (referred to later in this judgment).[39]Annex 4 was referred to in the authorisation as containing “conditions”. Annex 4 was in these terms: “Conditions with respect to pharmaceutical quality pursuant to Section 105(5a) German Medicinal Products Act (AMG): The documentation on pharmaceutical quality dated February 2002 provided the foundation of assessment. The renewal of the marketing authorisation is therefore granted with the following conditions pursuant to Section 105(5) AMG. Q1. The nutrient medium of the company Thymorgan used to validate the aseptic manufacturing method does not permit any verifiable statistical analysis with respect to the 50H injection ampoules because, according to the manufacturer’s information, no batches can be produced with more than 3000 injection ampoules for technical reasons. So as to be able to accept the results of the 10ml injection vials as reference, it must be clearly explained whether identical methods are used to fill the two different glass vessels in terms of method and filling apparatus. Q2. The conditions must be described under which the bulk ware stating substance is stored up to filling, in which vessel and for how long. The storage conditions and the stand times may not negatively influence the quality. Q3. Documents of product-specific validation of the methods used at Thymorgan and Thissen to determine the bacterial endotoxins must be subsequently submitted. Q4. The physical conditions during charging which result during the sterilisation cycle must be recorded in a suitable manner, e.g. using a temperature/time chart. Q5. The micro-organisms used as bio-indicators to validate the sterilisation methods must be characterised precisely for both ready-to-use medicinal product manufacturers (in addition to the name of the bacterium species, by specifying the strain number, number of vital spores per carrier, D value). Observe the recommendations of the Ph. Eur. with respect to the test organisms to be used. Q6. In principle, all starting substances used in the synthesis of the active substance (synthesis starting substances, synthesis reaction products, solvents, catalysts etc.) may arise as potential impurities in the end product of synthesis. Insofar as it cannot be proven that these above-mentioned starting substances are no longer contained in the end product, tests are to be conducted for these starting substances with respect to potential impurities as part of the release procedure using a validated test method. Toxicologically significant concentrations of impurities may not be reached. Where necessary, it should be demonstrated that these impurities have no damaging effect or no disadvantageous influence. Q7. A validated test for palladium residue must be made in the release testing for the active substance. The residual quantity is to be limited to less than 5ppm. Q8. Insofar as no verifiable analytical method is available to detect ethylene oxide in the active substance bendamustine, tests are to be made routinely in the active substance precursor HBI for potential ethylene oxide residue using the GC method described in the documentation. The limit of 1ppm may not be exceeded. Q9. Since toluene-denatured ethanol is used as solvent during the active substance synthesis, toluene is to be incorporated as part of the testing for residual solvent. The requirements of Ph. Eur. (2.4: Limit tests, 2.4.24: Identification and determination of solvent residues, 5.4: Solvent residues) must be taken into consideration for the assessment of the content of residual solvents in the active substance. Q10. The limit values of the individual known impurities described in the bendamustine DMF - with the exception of bendamustine ethyl ester (BM1EE) - are inappropriately specified too broadly in the same way as the total of impurities and must therefore be subsequently adjusted with respect to the values determined. Q11. Q10. applies accordingly to contamination limit values stipulated in the release specifications. Q12. The requirement of the shelf life specifications with respect to the coloration of the solution should not deviate from the release specifications without a plausible reason. The reconstituted solution may not, therefore be coloured more strongly than the reference solution B6 of the general Ph. Eur. Monograph 2.2.2. Q13. Until the final qualification of the so-far unknown contamination which occurs at the relative retention time 1.15, the durability for lyophilisates should be restricted to 12 months if stored below 25ºC. Q14. The batch results submitted on the stability tests show no significant increase in the impurities over the storage period whilst complementary to this, the active substance content remains approximately constant. Accordingly the specifications for the active substance content and the impurities should be adjusted to those of the release specifications. A generalised lowering of the lower content limit to 90% is not acceptable if necessity is not proven. The limit value specified must be derived from the submitted tests. A criterion is a balanced mass balance under consideration of the molar masses and the analytical precision between the reduction of the active substance content (95% - X%) and the increase in the decomposition products (+X%). The satisfaction of the conditions with respect to pharmaceutical quality must be reported to [BfArM] within 12 months of this notice coming into force. We request that an expert opinion be submitted from a counter-expert in which the satisfaction of the condition(s) with respect to the quality in accordance with the level of scientific knowledge is confirmed. The expert opinion is to be accompanied by a declaration in lieu of oath of the counter-expert in accordance with the wording of the 31st publication dated 05 December 1995 (Federal Gazette No. 2, Page 33 dated 04.01.1996) and the documents provided to the counter-expert, submitted in duplicate. We point out that only persons appointed by BfArM may be appointed as counter-experts [reference was made to where the list of such persons had been published]. We refer to the statutory reasons for the exclusion set out in Sections 20, 21 of the Administrative Proceedings Act (VwVfG) under item 6 of the 32nd publication dated 05 December 1995 (Federal gazette No 9, Page 349 dated 30.01.1996).[40]The authorisation of 19 July 2005 was served on Astellas on 27 July 2005. As I have explained, BfArM authorised Ribomustin for the indications NHL and MM but refused authorisation for the indications CLL and breast cancer. Astellas accepted the way in which BfArM had described the indications for NHL and MM. Astellas apparently had no concerns as to the 14 conditions in Annex 4. Astellas accepted the refusal in relation to breast cancer. However, Astellas wished to challenge the decision to refuse the indication for CLL.[41]On 18 August 2005, Astellas filed an appeal in the Administrative Court of Cologne, against BfArM’s decision insofar as, and only insofar as, it related to the refusal of authorisation of the CLL indication. In that respect, the notice of appeal sought a determination that BfArM should make a new decision on the application for re-registration, taking account of the legal opinion of the court. The notice of appeal expressly declared that Astellas agreed with the modifications of the restrictions on the authorised indications.[42]On 22 November 2005, Astellas applied for a suspension of its appeal. On 23 December 2005, the Administrative Court granted a stay of the appeal with the result that there was no substantive step in the appeal until it was withdrawn in 2011 as described later in this judgment.[43]Thereafter, Astellas published its summary of product characteristics. This summary identified the authorisation as having number 3000336.00.00 and related to three indications, NHL, MM and CLL.[44]On 28 April 2006, an expert who had been duly appointed in accordance with the July 2005 decision, a Dr Löbering, prepared a detailed report containing his expert opinion confirming that the conditions in the July 2005 decision were satisfied. Astellas did not draw attention to anything in the report which ought to have been of concern to BfArM. The report was provided to BfArM. There was no evidence of what BfArM did on receipt of that report.

Levact

[45]In September 2007, Astellas applied for a marketing authorisation for bendamustine under the decentralised procedure referred to in Article 28 of the Directive. It named Germany as the reference member state. The application was for use for the treatment of NHL and MM but also for the treatment of CLL. At some point, the product was renamed Levact. This application led to objections from three member states, the United Kingdom, France and Belgium, relating to various aspects of the application. The issues were referred to the European Medicines Agency (“EMA”) Committee for Medicinal Products for Human Use (“CHMP”). On 7 July 2010, Astellas’ application was concluded by the decision of the European Commission. France was the first member state to grant a marketing authorisation for Levact, on 15 July 2010. Articles 2 and 3 of the French marketing authorisation imposed conditions as to manufacture and inspection and further conditions in Annex 2 to the authorisation, which I have not seen. It may be that Annexes 1 and IIIA and IIIB to that authorisation also imposed conditions but I was not shown them either. On 15 December 2010, BfArM granted a marketing authorisation for Levact and stated that the authorisation was based on documents submitted by the applicant without further identifying them or their terms. Marketing authorisations for Levact in other member states were then granted.[46]The EMA summary of the position in relation to Levact refers to Annex 2 and Annex 4. Annex 2 referred to a proposal made by Astellas to the CHMP which concerned the carrying out of further trials and studies following the grant of authorisation. In the light of Astellas’s proposal, the CHMP was satisfied that the submitted data were sufficient for a restricted indication for NHL even though the submitted data did not meet the relevant guideline. The CHMP also commented that there was a lack of ICH compliant efficacy data but the deficiency was compensated by a well established safety profile so that the benefit-risk ratio was positive for all indications applied for, albeit with different degrees of certainty. Annex 4, referred to by the EMA, stated that national competent authorities should ensure that certain conditions were fulfilled by the authorisation holder. The condition required the authorisation holder to perform, post authorisation, a specified clinical trial.[47]In connection with the application under the decentralised procedure, BfArM published a public assessment report, dated 5 November 2010. Section V of this report identified four conditions (also described as commitments) which required Astellas to submit further data as to tests or trials after the grant of authorisation. Three of the conditions related to clinical matters and the fourth related to a matter of quality.

The German legislation

[48]The German ordinance, which I will call the German Medicines Act or “GMA”, contains provisions which, as amended, were designed to give effect to the Directive. I was not provided with a full set of the relevant provisions but I was provided with sections 25 and 28 in particular and section 105, the latter dealing with the Nachzulassung procedure.[49]Section 25(2) of the GMA states that the competent authority may only refuse to grant a marketing authorisation, which has been applied for, on a number of specified grounds. Where a ground for refusal exists, section 25(2) does not appear by itself to oblige the competent authority to refuse to grant the authorisation but it “may” do so. Section 25(4) provides that if the marketing authorisation cannot be granted on the basis of the documents submitted, then the applicant is to be given a period within which to correct the flaws in the documents submitted. If the flaws are not corrected within the period provided, then the marketing authorisation shall be refused.[50]Section 28 of the GMA allows the authority to impose conditions on the grant of a marketing authorisation. Section 28(2) provides that conditions may be imposed to ensure 6 specified matters. Section 28(3) provides that the authority may also impose the condition that further trials be carried out in certain circumstances. Section 28(3a) allows the authority to impose a condition as to the evaluation of knowledge gained through the experience of the use of the drug. Section 28(3c) also allows the authority to impose requirements as to certain matters in relation to the production and control of the relevant drug; these requirements are described as “conditions”.[51]Before German re-unification, West Germany had a system of deemed, also called “fictitious”, marketing authorisations for medicinal products which were in circulation prior to and at the time of West Germany’s transposition of EU medicines regulatory law (dating from Council Directive 65/65/EEC, the predecessor of Directive 2001/83/EC). These deemed authorisations were limited in time so that it was necessary for the authorisation holder to apply to re-register or prolong the deemed authorisation.[52]Upon German re-unification, there was a similar system of deemed marketing authorisations for medicinal products which had been in circulation in the former GDR. The relevant legislative provision was Annex 3, Chapter II, paragraph 4(1), first sentence, of the Regulation of 18 December 1990 on Transposition of the Law of the European Communities in the Territory specified in Article 3 of the Unification Treaty. The consequence was that all medicinal products in circulation in the GDR as of 3 October 1990 were deemed to be authorised for marketing in the re-unified Germany. However, the holder of such a deemed authorisation had to apply to re-register or prolong the deemed authorisation under section 105 of the GMA. This process was described as the Nachzulassung procedure. In general terms, and without addressing the question whether this objective was achieved, the general objective of the procedure was to produce a marketing authorisation which would comply with Community law. The general intention was that if the authorisation were refused, the deemed authorisation fell away; if the authorisation were granted, it would be an authorisation which complied with Community law.[53]The European Commission scrutinised the German deeming provisions and the Nachzulassung procedure. On 24 November 1997, the Commission wrote to Germany identifying two suggested deficiencies in the latter procedure. The first was that there was no requirement under section 105 of the GMA for applicants to submit the results of pharmacological and toxicological tests in a systematic way; this was said to be contrary to Article 4 of Council Directive 65/65/EEC. The second was that a provision to the effect that deemed marketing authorisations would not expire until 1 January 2005 was contrary to the time scale required by Article 26 of Council Directive 65/65/EEC.[54]On 21 October 1998, the Commission commenced infringement proceedings against Germany in respect of its alleged failure to implement Council Directive 65/65/EEC. The Commission provided a reasoned opinion in support of its stance. In response, Germany enacted the 10th Amendment to the GMA; this came into force on 12 July 2000 and set a deadline of 1 February 2001 for applicants under the Nachzulassung procedure to submit pharmacological, toxicological and clinical data. Accordingly, applicants were thereby required to submit a full dossier in support of their applications to prolong the deemed authorisations.[55]Following the 10th Amendment to the GMA, the Commission withdrew its infringement proceedings. On 15 November 2000, the Commission confirmed that the 10th Amendment to the GMA resulted in a procedure compliant with Community law.[56]By July 2005, there had been further amendments (the 11th and 12th) to the GMA but these amendments did not change any matter of substance in relation to section 105.[57]Section 105(4a) of the GMA provides that an application under the Nachzulassung procedure must comply with the general German procedure (in sections 22 and 23 of the GMA) for submitting documents in support of an application for a marketing authorisation. Section 105(4a) was part of the 10th Amendment to the GMA introduced in response to the proceedings brought by the Commission. This sub-section was designed to reconcile the Nachzulassung procedure with Community law.Section 105(4f) provides that on an application under the Nachzulassung procedure, the authority should extend the deemed marketing authorisation for 5 years if there is no ground for refusal under section 25(2), to which I have referred above. Thus, section 105(4f) mandates a grant if there is no ground of refusal; it does not mandate a refusal if there is a ground of refusal. In such a case, as under section 25(2), the authority may refuse or may grant an authorisation.[58]Section 105(5) provides that if the authority raises objections to the application, the applicant should deal with “defects” within a stated period. If the defects are not remedied within that period, then the marketing authorisation should be refused. Therefore, section 105(5) deals with the case where the objections are to be remedied before the marketing authorisation is granted. The fourth sentence of section 105(5) provides that the authority should “in all suitable cases” not raise any objection but should combine extension of the authorisation with an obligation to remedy the defects in accordance with section 105(5a).[59]Section 105(5a) provides that the authority can combine extension of the authorisation with the imposition of certain conditions. The conditions may be those permitted under section 28(2), to which I have referred above, but may also include conditions designed to guarantee the requirements of quality, safety and efficacy, unless the authority should instead:(1) give notice of objections under section 105(5); or(2) refuse a marketing authorisation as a result of serious deficiencies in the pharmaceutical quality, efficacy or safety. The fifth sentence of section 105(5a) directs that notice is to be given to the competent authority of the fulfilment of the conditions which have been imposed. This notice is to be accompanied by a statutory declaration of an independent expert confirming that the quality of the medicinal product corresponds to the current state of scientific knowledge. The sixth sentence of section 105(5a) provides that earlier provisions in section 25(5) of the GMA, dealing with the use of experts by the authority are to apply in this instance also.[60]Astellas submits that the BfArM authorisation of Ribomustin in July 2005 was not a marketing authorisation in accordance with the Directive. At the beginning of the trial, Astellas made the following submissions:(1) The Directive required the competent authority to assess an application for a marketing authorisation by balancing positive therapeutic effects against any risks relating to quality, safety and efficacy: see Article 26, the reference to risks in Article 1(28) and the definition of “risk-benefit balance” in Article 1(28a);(2) The documents submitted with an application for a marketing authorisation must demonstrate to the competent authority that the risk-benefit balance is in favour of granting authorisation;(3) An application for a marketing authorisation must take into account relevant scientific guidelines: see Annex 1;(4) A competent authority may not delegate its functions and, in particular, may not delegate its decision making to an independent expert;(5) In exceptional circumstances, Article 22 allows a competent authority to impose conditions on the grant of a marketing authorisation; Article 22 did not apply in the circumstances of the present case;(6) In July 2005, there was no provision of the Directive which permitted the grant of a marketing authorisation subject to post-authorisation conditions or commitments, whether related to quality, safety or efficacy;(7) The July 2005 marketing authorisation did impose conditions; these were said to relate to quality but in substance they related to both safety and efficacy;(8) The subject matter of the conditions was important and significant;(9) Prior to the conditions being satisfied, BfArM was not in a position to conduct the exercise of assessing the risk-benefit balance;(10) When Astellas did comply with the 14 conditions in the July 2005 marketing authorisation, BfArM did not carry out any assessment of the risk-benefit balance or whether it was appropriate to authorise Ribomustin;(11) The above submissions were supported by the opinion of the Advocate General (at [23], [36] and [45]) and the decision of the court (at [27] and [32]) in R (Generics (UK) Ltd) v Licensing Authority C-527/07 [2009] ECR I-5259.[61]In its closing submissions, Accord made the following points:(1) On a purposive construction, the only purpose of the reference in Article 10 to a marketing authorisation granted under Article 6 is to require that the marketing authorisation was granted by a competent authority which had been provided with the materials required by Article 8(3)(i) and applied an approach required by the Directive to those materials;(2) When a generic company applies for a marketing authorisation for a generic product, it has to provide its own dossier dealing with all the matters in Article 8 and Annex 1, except some of those referred to in Article 8(3)(i); thus the generic company’s dossier would deal with its manufacturing processes and the quality of its product; any so-called defects in the manufacturing and quality information provided in the dossier submitted for the reference medicinal product were irrelevant to the generic company’s application;(3) An issued marketing authorisation, with or without conditions, is still a marketing authorisation which has been issued;(4) Post-authorisation commitments or conditions are commonplace;(5) The Directive permits and/or contemplates that post-authorisation commitments or conditions can be imposed;(6) The provisions of the GMA (sections 28 and 105(5a)) are compliant with the Directive; in any event, they are to be construed, in accordance with the Marleasing principle, so that they conform to the Directive;(7) It is absurd for Astellas to suggest that another member state, or in this case the court in another member state, should have to form an assessment as to the significance or the seriousness of the matters which were the subject of the conditions in the BfArM marketing authorisation, particularly where there is no access to the dossier submitted by Astellas to BfArM; such an approach was not required by R (Generics (UK) Ltd) v Licensing Authority C-527/07 [2009] ECR 1-5259;(8) The absurdity of Astellas’ case was shown by its inability to explain how the conditions in the Ribomustin marketing authorisation meant that it was not in accordance with the Directive but the conditions in the Levact marketing authorisation did not produce that result;(9) Although Astellas argues that the Ribomustin dossier was “incomplete”, Astellas has declined to give disclosure of the dossier and it is simply not possible to assess the contention that it was incomplete;(10) There was no delegation by BfArM of any decision making power to an independent expert.[62]In its closing submissions, Astellas put forward the following analysis:(1) The transitional provisions in the German legislation permitted a marketing authorisation to be re-registered on the basis of an incomplete dossier with outstanding issues being dealt with by way of conditions to be complied with post authorisation;(2) The German legislation then delegated assessment of the compliance with those conditions to an independent expert, with no provision for BfArM itself to review compliance;(3) The July 2005 decision relied on these provisions of the German legislation;(4) In July 2005, BfArM must have decided that that the data in the dossier were insufficient to allow it to grant a marketing authorisation under the normal, Directive compliant, rules; BfArM’s decision must have been that the dossier did not meet the standards required under the sections of the German legislation (in particular, section 25) because if it had considered that the dossier met those standards, then it would have granted an unconditional authorisation;(5) No provision in the Directive as it stood in July 2005 permitted a competent authority to grant a conditional authorisation in the way in which BfArM purported to do;(6) No provision in the Directive allowed the assessment of compliance with the Directive to be delegated to an independent expert;(7) The inescapable conclusion was that the 2005 decision did not meet the requirements of the Directive.[63]I consider that these submissions require me to address five principal matters, as follows:(1) What principles are established by R (Generics (UK) Ltd) v Licensing Authority?(2) Was the dossier submitted by Astellas to BfArM prior to July 2005 incomplete so that it failed to comply with the requirements of the Directive?(3) Did BfArM have power under the Directive to impose the 14 conditions identified in its decision of July 2005?(4) The effect of BfArM operating under GMA, section 105;(5) Did BfArM delegate to an expert the assessment of the Astellas’ dossier which BfArM alone was required to carry out?

What principles are established by R (Generics (UK) Ltd) v Licensing Authority?

[64]In the Generics case, Generics (UK) Ltd (“Generics”) wished to apply for a marketing authorisation for a generic version of galantamine relying on Article 10 of the Directive to exempt it from the requirement to comply with Article 8(3)(i). Generics wished to rely on a drug, Nivalin, as the reference medicinal product for the purposes of Article 10. Nivalin had not at any time been the subject of a marketing authorisation under the Directive or the predecessor Directive, 65/65/EEC. Instead, Nivalin had been authorised in Austria in 1963, under Austrian national procedures, and before Austria joined the EEA (in 1994) and the EU (in 1995). A question was referred to the Court of Justice as to Generics’ ability to rely on Nivalin as a reference medicinal product for the purposes of Article 10 of the Directive. Generics relied on the facts that:(1) Nivalin had been authorised in Austria before it joined the EEA and the EU;(2) Austria had transposed the authorisation provisions of the Directive into its national law (although Nivalin had not been authorised under those transposed provisions);(3) Nivalin had remained on the market after Austria’s accession to the EEA and the EU;(4) The Austrian national authorisation for Nivalin had been varied after Austria joined the EEA and the EU.[65]The Court decided, agreeing with the Opinion of the Advocate General, that Nivalin was not a reference medicinal product for the purposes of Article 10 of the Directive. It held:(1) The objective of the requirement in Article 8(3)(i) to submit the results of the tests therein referred to was to provide proof of the safety and efficacy of a medicinal product;(2) The concept of a reference medicinal product could not be interpreted so that the abridged procedure under Article 10 resulted in a relaxation of the requirements as to safety and efficacy;(3) In order for the abridged procedure under Article 10 to be available, there must remain available to the relevant competent authority all the particulars and documents originally submitted in relation to the reference medicinal product; otherwise, it would be open to a producer of a generic product to be relieved of the requirement to submit tests in accordance with Article 8(3)(i) even though there was no evidence of the safety and efficacy of the reference medicinal product;(4) It was not sufficient that Nivalin had been marketed for many years on the basis of Austrian national procedures which were not in accordance with the Directive; for a medicinal product to be a reference medicinal product, it must have been authorised in accordance with Community law;(5) Nivalin had never been the subject of an application for a marketing authorisation containing the particulars and documents required by Article 8 of the Directive.[66]Astellas submitted that the facts of the present case were essentially the same as the facts in R (Generics (UK) Ltd) v Licensing Authority. As to that, I make the following comments. On the facts of that case it was plain that the authorisation for Nivalin, granted under the Austrian national procedures long before Austria’s accession to the EEA and EU, was not in accordance with the Directive. Similarly, the authorisation of the drug later known as Ribomustin, granted in the GDR under its national procedures before the re-unification of Germany, was not in accordance with the Directive. However, the question in the present case is whether the authorisation granted by BfArM in July 2005 was a marketing authorisation in accordance with the Directive. I also note that there is no difficulty in the present case about the relevant competent authority having a complete dossier which complied with Article 8(3)(i) in relation to pre-clinical tests and clinical trials.[67]Article 8 of, and Annex 1 to, the Directive prescribe the information and material which is to be provided by an applicant for a marketing authorisation. As printed, Annex 1 is at pages 65 to 104 of the Directive. It is obvious that Annex 1 requires an applicant to submit a very large amount of information and material. A witness called by Accord, Dr Patel, who has considerable experience as to the practice in relation to the preparation and assessment of such dossiers, told me that a typical application for a marketing authorisation would be supported by documents comprising anything between 4 and 20 ring binders (if printed out). He also said that there will be many thousands of matters pertaining to the quality of the product.[68]Article 19 of the Directive identifies what a competent authority is to do by way of examination of an application for a marketing authorisation. Under Article 19(1), it must verify whether the particulars submitted in accordance with the application conform, relevantly, to Articles 8 and 10 and it must examine whether the conditions for issuing an authorisation are complied with. Under Article 19(2), the competent authority may, but is not obliged to, submit the product and its materials for testing. Under Article 19(3), the competent authority may, but is not obliged to, require the applicant to supplement the particulars accompanying the application in respect of the items listed, relevantly, in Articles 8 and 10. These provisions indicate that it is possible for a competent authority to be satisfied, following verification, that the particulars submitted in support of the application comply with Articles 8 and 10 but yet the competent authority wishes to have further information in certain respects in relation to matters listed in Articles 8 and 10.[69]Article 26 provides:
“1. The marketing authorisation shall be refused if, after verification of the particulars and documents listed in Articles 8, 10, 10a, 10b and 10c, it is clear that: (a) the risk-benefit balance is not considered to be favourable; or (b) its therapeutic efficacy is insufficiently substantiated by the applicant; or (c) its qualitative and quantitative composition is not as declared. 2. Authorisation shall likewise be refused if any particulars or documents submitted in support of the application do not comply with Articles 8, 10, 10a, 10b and 10c. 3. The applicant or the holder of a marketing authorisation shall be responsible for the accuracy of the documents and the data submitted.”
[70]Article 26(1) obliges the competent authority to withhold authorisation if, after verification of the matters listed, relevantly, in Article 8, certain matters are clear to the competent authority. Article 26(2) obliges the competent authority to refuse to authorise the product if any particulars or documents submitted in support of the application do not comply, relevantly, with Article 8. The process involved in Article 26(2) may well involve the competent authority in a process of assessment or evaluation as to whether a requirement of Article 8 is strictly necessary or whether some limited or insignificant non-compliance with a requirement of Article 8 could be overlooked.[71]Astellas’ case is that the dossier it submitted to BfArM prior to July 2005 was “incomplete”. I did not understand Astellas to submit that BfArM was obliged to withhold authorisation under Article 26(1) on the ground that it was “clear” that one of the matters in Article 26(1) was not satisfied. It was not initially clear whether Astellas intended to submit that BfArM was obliged under Article 26(2) to refuse to authorise Ribomustin on the ground that some particulars or documents submitted by Astellas did not comply with Article 8.[72]I asked Ms Bacon QC, leading counsel for Astellas, whether it was her case that BfArM was obliged under Article 26(2) to refuse to authorise Ribomustin. In response to that question, she contended in her closing submissions that the content of BfArM’s Q1, Q3, Q4, Q6 and Q7 (in Annex 4 to the July 2005 decision) showed that the dossier submitted by Astellas “fell short” of an express requirement of Annex 1 to the Directive.[73]The initial difficulty in the way of making a finding as to whether the particulars or documents submitted by Astellas in support of its application for Ribomustin complied with Article 8 is that Astellas has not disclosed to Accord and the court the dossier it compiled for that application. Accord and the court do not know the full extent of the particulars and documents submitted over a long period of years in support of its application. Further, Accord and the court do not have access to the internal papers and assessments of BfArM which might indicate its evaluation of the extent, if at all, to which the submitted particulars and documents did not comply with Article 8. On 24 September 2015, the solicitors for Accord wrote to the solicitors for Astellas and asked for copies of the “quality data” submitted by Astellas to BfArM in 2002. On 2 October 2015, the solicitors for Astellas replied to this request and stated that such documents were not relevant and that “[n]o part of the Claimants’ or the Defendants’ pleaded case relies on the content of those quality data”. This contention does not sit well with Astellas’ contention that it has established that the content of the quality data did not comply with Article 8 of, and Annex 1 to, the Directive.[74]Accordingly, Astellas’ case that the particulars and documents submitted by Astellas to BfArM prior to July 2005 did not comply with Article 8 of the Directive, so that BfArM was obliged under Article 26 to refuse to grant authorisation, now seems to rest on its case that it can demonstrate that fact by referring to Q1, Q3, Q4, Q6 and Q7 and without Accord or the court knowing anything else about the actual content of the particulars and documents relied on by Astellas at the time.[75]In relation to Q1 and Q4, Astellas drew attention to paragraph 3.2.2.3 of Annex 1 which referred to the manufacturing process of the finished medicinal product. In particular, the paragraph referred to a description of the manufacturing method accompanying the application pursuant to Article 8(3)(d) so as to give an adequate synopsis of the operations employed. It stated that the description should include, at least, for sterile medicinal products, details of the sterilisation processes and/or aseptic procedures used. Astellas then referred to Q1 and Q4, which I have quoted earlier in this judgment. It submitted that the content of Q1 and Q4 demonstrates that the dossier provided by Astellas “fell short” of an express requirement of Annex 1. I do not accept this submission. Q1 refers to one aspect of the information provided by Astellas which deals with its aseptic manufacturing method. Q1 does not summarise the information which Astellas did provide to BfArM so that one could begin to form a view as to whether the synopsis provided was “adequate” as required by paragraph 3.2.2.3. Nor is there any basis for concluding that BfArM considered that the information was inadequate as distinct from it forming the view that it would wish to have further information. It will be remembered that Article 19 distinguishes between cases where the particulars submitted by the applicant do not comply with the requirements of Article 8 and Annex 1 and cases where the particulars do comply with those requirements but the competent authority wishes to have more information.[76]Astellas also relied on Q4 in connection with paragraph 3.2.2.3 of Annex 1. I do not consider that the terms of Q4 go anywhere near suggesting that BfArM took the view that paragraph 3.2.2.3 had not been complied with, so that it was obliged to refuse to authorise under Article 26.[77]Next Astellas referred to part of paragraph 3.2(4) of Annex 1 and Q3, Q6 and Q7. Astellas did not quote the whole of paragraph 3.2(4) as it omitted the option for an applicant to refer to test procedures in the European Pharmacopoeia instead of the applicant’s own test procedures. The procedures in the European Pharmacopoeia will not be product specific whereas BfArM asked in Q3 for documents as to product-specific validation. I have no way of knowing what Astellas provided to BfArM with its application and equally no way of assessing whether that information complied with paragraph 3.2(4) of Annex 1.[78]Although Astellas also relied on Q6, I consider that Q6 does not contain any statement that Astellas had failed to comply with a requirement of Article 8 and of Annex 1. Q6 contains general statements of principle but does not itself state that Astellas failed to comply with such general statements. This is shown by the use of the words “insofar as it cannot be proven” and “where necessary” which show that Q6 does not itself say whether the relevant matter can or cannot be proven and whether the relevant matter is or is not necessary.[79]Lastly, Astellas relied on Q7 which stated that a validated test for palladium residue should be made. In the absence of production of the dossier actually submitted to BfArM, it is not known whether Astellas did provide information as to a proposed test for palladium residue or whether it did not propose to carry out such a test. In either case, Astellas had complied with the requirements of Article 8 and Annex 1 by describing the extent of the tests which it intended to carry out. However, as is clear from Article 19(3), BfArM was nonetheless entitled to ask for a further test and it did so in Q7.[80]I conclude that it has not been shown that the dossier submitted by Astellas prior to July 2005 did not comply with the Directive.[81]Astellas submitted that a competent authority had no power under the Directive to impose conditions on its grant of a marketing authorisation and, in particular, it had no power to impose conditions as regards the quality of the authorised product to be manufactured and marketed.[82]Ultimately, whether Astellas is right about this will depend on the wording and the purpose of the Directive. However, I confess that I found its proposition somewhat surprising, certainly as regards matters which went to the manufacturing process and the quality of the manufactured product. First of all, it seems to me to be inherent in the idea that a licensing body should consider whether to authorise something that it could specify the conditions on which it is prepared to give that authorisation. Secondly, an assessment of the quality of a manufactured product is somewhat different from an assessment of the safety or efficacy of a drug. With matters of safety and efficacy, the competent authority has a known certain commodity to deal with. It could take the view that the question for it can be given a “yes” or “no” answer; the drug can be authorised or it cannot. However, matters as to the quality of a manufactured product are different. The product will be manufactured and marketed for a period of time following the grant of the marketing authorisation. The competent authority may well take the view that it will authorise the marketing of a product provided that the authorisation holder conforms to certain standards and controls, but not otherwise. The obvious way to impose such standards and controls is to provide that the authorisation is granted on conditions that they are complied with.[83]Notwithstanding these comments, Astellas submitted that it was simply not possible in accordance with the Directive for a competent authority in July 2005 to grant a marketing authorisation subject to any conditions (apart from an exceptional case provided for in Article 22). There was then a discussion as to whether the competent authority could take “commitments” from an applicant as part of the application process. Ultimately, Astellas submitted that it was not possible for the competent authority to take, or request, commitments in this way. That submission appeared to be forced upon Astellas by the recognition that if the competent authority could take, or request, a commitment from an applicant before granting an authorisation, it was difficult to see why the competent authority could not record that commitment in the authorisation later granted and, if that were the position, it would be difficult to put forward any principled objection to an authorisation which imposed a condition, instead of recording a commitment.[84]Accord submitted that the wording of the Directive in a number of places indicated that it was envisaged that the competent authority, when granting a marketing authorisation, could impose on the applicant “conditions” or “controls” or “requirements” which were to be complied with post authorisation. These indications included the following:(1) Recital (37) stated that: “authorisation must be subject to certain essential conditions and it is the responsibility of the Member State concerned to ensure that such conditions are met”;(2) Article 1(15) referred to a “post-authorisation safety study” and to a clinical trial to be carried out in accordance with “the terms” of the marketing authorisation;(3) Article 8(3)(h) referred to “the control methods” employed by the manufacturer;(4) Article 8(3)(ia) referred to a detailed description of the pharmacovigilance and “the risk-management system which the applicant will introduce”;(5) Article 20 referred to “controls” according to the methods described in accordance with Article 8(3)(h);(6) Article 22 undoubtedly permitted the imposition of conditions (Astellas submitted that this was the single instance under the Directive as it stood in July 2005 where conditions could be imposed);(7) Article 23 referred to the methods of control in Article 8(3)(h);(8) Article 32(4)(c), in Chapter 4 of the Directive, dealing with the mutual recognition procedure and the decentralised procedure, referred to the authorisation being granted “subject to certain conditions, in view of conditions considered essential for the safe and effective use of the medicinal product including pharmacovigilance”;(9) Article 32(5)(b) referred to conditions within the meaning of Article 32(4)(c);(10) Article 41(b) (in the Title of the Directive dealing with manufacture and importation) referred to requirements which the Member State laid down as regards manufacture, control and storage of medicinal products in accordance with Article 20;(11) Article 42 (in the Title of the Directive dealing with manufacture and importation) stated that the authorisation might be made conditional on the carrying out of certain obligations either when authorisation was granted or a later date;(12) Article 46 (in the Title of the Directive dealing with manufacture and importation) stated that the holder of a manufacturing authorisation should at least be obliged to comply with a number of specific requirements;(13) Article 51 (in the Title of the Directive dealing with manufacture and importation) referred to requirements in the manufacturing authorisation which were in accordance with the requirements of the marketing authorisation;(14) Article 103 (in the Title of the Directive dealing with pharmacovigilance) referred to a qualified person providing to the competent authorities information relevant to the evaluation of the benefits and risks afforded by a medicinal products including information on post-authorisation safety studies;(15) Article 104(6) (in the Title of the Directive dealing with pharmacovigilance) referred to requirements being laid down as a condition for the granting of the marketing authorisation;(16) Title XI of the Directive was headed “Supervision and Sanctions” and included Articles 112, 116 and 117;(17) Article 112 provided: “Member States shall take all appropriate measures to ensure that the holder of the marketing authorization for a medicinal product and, where appropriate, the holder of the manufacturing authorization, furnish proof of the controls carried out on the medicinal product and/or the ingredients and of the controls carried out at an intermediate stage of the manufacturing process, in accordance with the methods laid down in Article 8(3)(h)”.(18) Article 116 provided: “An authorisation shall also be suspended, revoked, withdrawn or varied where the particulars supporting the application as provided for in Article 8 … are incorrect or have not been amended in accordance with Article 23 or where the controls referred to in Article 112 have not been carried out”;(19) Article 117 was without prejudice to Article 116 and referred to steps being taken to ensure that the supply of the medicinal product was prohibited and it was withdrawn from the market if the view was taken that the controls on the product had not been carried out or if “some other requirement or obligation relating to the grant of the manufacturing authorisation has not been fulfilled”;(20) Annex 1 dealing with the contents of Module 3 refers in a number of places to controls and to post-approval stability protocols and the giving of commitments.[85]Faced with this long list of references to controls, requirements and conditions intended to operate post-authorisation, Astellas adhered to its position that all of these references could be explained away consistently with its submission that (with the exception of a condition in accordance with Article 22), there was no power under the Directive for a competent authority to impose post-authorisation conditions. It said that Article 22 was for exceptional circumstances and its terms, as an exception to a general rule, indicated the existence of a general rule that there was no power to impose conditions. The other references to the dossier spelling out controls and requirements, it was submitted, did not demonstrate that the competent authority could actually impose those controls or requirements.[86]I prefer the submissions of Accord as to the power of the competent authority to impose conditions to be complied with by the authorisation holder post-authorisation. I do so for a number of reasons. First, that submission is consistent with the repeated references in the Directive to controls, requirements and conditions post-authorisation. Secondly, it is very much what one would expect; a situation where the competent authority was obliged to grant an authorisation but was wholly unable to impose conditions on the quality of the product being authorised would be surprising and would require considerable justification. Thirdly, the wording of Articles 112 and 116 seems to me to be apt to permit the imposition of conditions as regards the control methods to be used in the manufacture of the medicinal product and to permit a term which allows the competent authority to revoke the marketing authorisation where such controls have not been carried out.[87]As to Article 22, I do not consider that this Article compels me to conclude that it is the only case where a condition can be imposed. The express inclusion of this power to impose conditions does not carry with it the implication that there is no other power to impose conditions, particularly in the light of the other wording in the Directive which contemplates the imposition of controls, requirements and conditions.[88]Astellas also relied on Articles 21a and 22a which were introduced into the Directive by amendment by Directive 2010/84/EU. These Articles permit the imposition of conditions and obligations for certain specified purposes. Because these Articles were not part of the Directive in July 2005, they cannot be directly relied upon as an aid to interpretation of the Directive at that time. I recognise it can be said that if the terms of the Directive as at July 2005 already permitted a competent authority to impose conditions on a marketing authorisation, then some or all of Articles 21a and 22a might not have been strictly necessary. However, Articles 21a and 22a may have been introduced because there was uncertainty as to what could be done under the unamended terms of the Directive and because it was desirable to put the matter beyond doubt.[89]Astellas also relied on the terms of Regulation 4 of Commission Regulation (EC) NO 507/2006 which supplemented Council Regulation (EC) No 726/2000, dealing with the centralised procedure. Regulation 4 of the 2006 Regulation permitted conditional marketing authorisations in certain circumstances which do not arise in the present case. I am not persuaded that Regulation 4 of the 2006 Regulation, nor Article 22 of the Directive, carry the implication that these are the only circumstances in which conditions can be imposed in a marketing authorisation. The circumstances being addressed in Regulation 4 or Article 22 are very different from the type of control or requirement as to quality with which the present case is concerned. Regulation 4 and Article 22 expressly empower the grant of a marketing authorisation which would, on safety grounds, otherwise have to be refused.[90]I do not see anything in the character of the conditions, or controls or requirements, imposed by Q1 to Q14 which went beyond the powers of a competent authority under the Directive to impose such matters.[91]This conclusion makes it unnecessary to consider what the consequence would be if BfArM had imposed on Astellas in July 2005 conditions which it had no power to impose under the Directive. At that time, Astellas did not challenge the imposition of the conditions but complied with them. If I had held that these conditions could not be imposed under the Directive, it does not seem to me automatically to follow that the marketing authorisation would be of no effect under the Directive. One would have to consider whether the marketing authorisation took effect but free of the conditions which, on this hypothesis, BfArM had no power under the Directive to impose or whether the purported marketing authorisation was of no effect under the Directive.[92]I am comforted in reaching these conclusions as to the power of a competent authority to impose conditions by noting how Directive 65/65/EEC, and later the Directive, were transposed in the United Kingdom. The United Kingdom legislation seems to allow the competent authority to impose conditions on a marketing authorisation: see Medicines Act 1968, section 20 (“a licence containing such provisions as they consider appropriate”) and the Human Medicines Regulations 2012, regulation 49, dealing with the imposition of terms in a marketing authorisation, and regulation 59, dealing with conditions.[93]I also consider that Astellas did not have any real answer to the point that its own marketing authorisation for Levact, which it claims is Directive compliant, was also directed to be subject to conditions, including conditions dealing with post-authorisation clinical trials. Astellas was driven to submit that these conditions were not in fact imposed but I do not accept that submission.

The effect of BfArM operating under GMA section 105

[94]I have referred earlier in this judgment to the relevant provisions in section 105 of the GMA, in particular, sub-sections (4f), (5) and (5a). In summary, so far as immediately relevant:(1) section 105(4f) mandates the grant of a marketing authorisation if there is no ground for refusal according to section 25(2); it does not mandate refusal if there is a ground for refusal;(2) section 105(5) provides for the possibility of the competent authority requiring the remedy of defects before a marketing authorisation is granted; the fourth sentence of the sub-section states that the competent authority should “in all suitable cases” not proceed in this way but should instead combine an extension of the deemed authorisation with an obligation, imposed under section 105(5a), to remedy the defects within a specified period;(3) section 105(5a) allows the competent authority to grant an extension of the deemed authorisation on conditions; the conditions can be those permitted under section 28(2) but may also include conditions geared to guaranteeing the requirements of quality, safety and efficacy, unless notice must be given of flaws pursuant to section 105(5) or unless the extension of the deemed authorisation must be refused as a result of serious deficiencies in pharmaceutical quality, efficacy or safety.[95]The marketing authorisation granted in July 2005 described the 14 conditions as being “pursuant to section 105(5a)” and also “pursuant to section 105(5)”. The second of these references is probably inappropriate. The only part of section 105(5) which might be appropriate is the fourth sentence which directs the competent authority in all suitable cases to proceed under section 105(5a) rather than requiring a remedy of defects before the grant of an extension pursuant to section 105(5).[96]In this case, BfArM plainly thought that it was appropriate to proceed under section 105(5a). That indicates that BfArM did not think that the application should be refused as a result of serious deficiencies in pharmaceutical quality, efficacy or safety. It also indicates that BfArM did not think it was more suitable to delay the grant of authorisation until defects (if any) within the meaning of section 105(5) were remedied. These were matters for BfArM to determine as the relevant authority under the GMA and as the competent authority under the Directive.[97]As explained earlier, when considering the Directive, Astellas has not shown that BfArM was obliged to refuse to grant authorisation under Article 26 and I have held that, in accordance with the Directive, BfArM was entitled to impose the conditions it did impose. Accordingly, the fact that BfArM acted pursuant to section 105(5a) of the GMA does not indicate that it did something contrary to the Directive.[98]The way in which section 105 of the GMA operated was the subject of elaborate submissions on behalf of Astellas. Further, Professor Gassner, the expert witness in German law called by Accord, was cross-examined as to the meaning of section 105. As it happens, the meaning and the intended operation of section 105 is reasonably clear. Although Professor Gassner was asked to agree with a number of propositions about section 105, I do not think that anything he said is at variance from my interpretation of it. However, the premise of the questions seemed to be that it was not possible under the Directive, or under sections 25 and 28 of the GMA, to impose the sort of conditions that were imposed by BfArM in this case. I do not accept that premise.[99]The submissions made to me, based on the same premise, were that I should hold that:(1) what BfArM did, by imposing conditions, was to say that, absent a power to impose conditions, it would have to refuse to grant an authorisation or at least to delay such a grant until the suggested defects were remedied;(2) BfArM was thereby saying that the dossier provided to it was not in accordance with the Directive;(3) the authorisation granted was therefore in relation to a dossier which was not in accordance with the Directive; and(4) therefore, the authorisation was not in accordance with the Directive.[100]I consider that these submissions by Astellas are answered by the conclusions I have already reached in relation to two matters, namely, whether it has been shown that the dossier did not comply with the Directive and whether a competent authority has power in accordance with the Directive to impose conditions on the grant of a marketing authorisation. If, as I have held, the content of the conditions does not show that the dossier did not comply with the Directive so that a marketing authorisation ought to have been refused and if a competent authority can impose conditions on the grant of a marketing authorisation, what BfArM did was to grant a marketing authorisation which was compliant with the Directive.[101]Astellas referred to the fact that, having set out 14 conditions in the marketing authorisation of July 2005, BfArM went on to direct that the satisfaction of the conditions was to be reported to it within 12 months thereafter and it requested an expert opinion confirming the satisfaction of the conditions with respect to the quality of the product in accordance with the relevant level of scientific knowledge. It was not said that BfArM was not entitled to receive, and to act upon, the opinion of a suitable expert. It is however said that BfArM’s direction in this respect offended a basic rule of German administrative law.[102]Under German administrative law, a public law decision maker is not entitled to delegate its decision making to a private person. Astellas contended that BfArM’s direction that satisfaction with the conditions be confirmed by the opinion of an expert offended this rule.[103]I do not accept this submission of Astellas. The decision of 19 July 2005 to grant a marketing authorisation was taken by BfArM and was not delegated to an expert. It cannot be said that the BfArM decision was in some way incomplete or merely an indication of a possible decision which was to be taken later by the expert. It is clear that the BfArM decision was an immediately effective decision albeit BfArM reserved the right to suspend or revoke the decision if the conditions were not met in time. The direction by BfArM which required the provision of an expert opinion did not delegate the making of any decision to that expert. The expert’s opinion was to be information provided to BfArM. It was up to BfArM to decide what to do with that information. BfArM did not delegate its decision in that respect to the expert although it is to be expected that BfArM would have regard to the opinion of the expert when it made its decision.[104]I accept that the marketing authorisation of July 2005 did not spell out what was to happen at BfArM when it received the expert’s opinion. BfArM had reserved the right to suspend or revoke the marketing authorisation if the conditions were not met in time. That suggests that BfArM would need to review the matter at or before the end of the time for compliance in order to establish whether the conditions had been met. On such review, BfArM would need to consider the matter, taking account of the opinion of the expert, and make its decision. There is no evidence, one way or the other, as to what BfArM did following receipt of the expert’s report. If BfArM did not consider the matter at all, that does not mean that it delegated its decision making power to the expert. If BfArM did consider the matter, took account of the expert’s report and was satisfied that the conditions had been met in time, then that also does not mean that it delegated its decision making power to the expert.

Conclusion on whether the marketing authorisation of July 2005 was in accordance with the Directive

[105]Before considering the effect of Astellas’ appeal against BfArM’s decision of July 2005 and the effect of the settlement of that appeal, I will express my conclusions on the points I have considered so far. I find that the marketing authorisation of July 2005 was in accordance with the Directive and had been granted in accordance with Article 8 of the Directive.[106]As explained earlier in this judgment, on 18 August 2005, Astellas filed an appeal against BfArM’s decision insofar as, and only insofar as, it related to the refusal of authorisation of the CLL indication. In that respect, the notice of appeal sought a determination that BfArM should make a new decision on the application for re-registration, taking account of the legal opinion of the court. The notice of appeal expressly declared that Astellas agreed with the modifications of the restrictions on the authorised indications, NHL and MM. Astellas did not appeal the refusal of the indication for breast cancer.[107]The witnesses who gave evidence as to German law disagreed as to the effect of the appeal on the decision of July 2005. Professor Gassner stated that the appeal had no effect on the marketing authorisation in relation to the indications of NHL and MM. However, because the decision of July 2005 had refused to extend the deemed authorisation for CLL, that refusal was suspended by the appeal so that Astellas was able to continue to market CLL under the pre-existing and continuing deemed authorisation. On this basis, after bringing its appeal, Astellas was able to market for the indications NHL and MM under the decision of July 2005 and was able to market for the indication CLL under the original deemed authorisation.[108]Professor Koenig disagreed. He stated that the appeal had the effect of suspending the effect of the decision of July 2005 in its entirety. After the appeal, Astellas was entitled to market the product for the indications for NHL, MM and CLL under the original deemed authorisation but not under the authorisation granted by the decision of July 2005. Professor Koenig accepted that his reasoning produced the result that Astellas was also entitled to market the product for the indication for breast cancer, which indication had been refused by BfArM and against which refusal Astellas had not appealed.[109]Section 43 of the German Administrative Procedure Act provides that an administrative act is effective when the person affected by it is notified of the act. Section 44 of that Act provides for cases where an administrative act is ineffective. Section 44(4) provides that where the relevant invalidity applies only to part of the administrative act, the entire act is invalid where the invalid portion is so substantial that the authority would not have issued the administrative act without the invalid portion. It was agreed that it was open to Astellas to challenge the validity of the refusal of the indication for CLL whilst at the same time accepting that the authorisation for NHL and MM was valid and not open to challenge.[110]The suspensive effect of an appeal against an administrative act is governed by section 80 of the German Code of Administrative Court Procedure. It is possible that there are other cases of suspension in German law which operate in a way which is analogous to section 80. However, as to the effect of a suspension, there is not said to be any difference between a suspension under section 80 and a suspension under an analogous procedure. Suspension of the effect of the challenged decision is automatic.[111]The following examples illustrate what happens when there is a suspension of the effect of a challenged decision. If the administrative act imposes a burden on the affected person and he appeals, the imposition of the burden is suspended pending appeal. If, on the other hand, the affected person had applied for a permission or authorisation, which was withheld by the administrative act, then an appeal does not confer upon him that permission or authorisation pending appeal. There is a qualification to that last proposition which is relevant in the present context. If an application is made under section 105 of the GMA for the extension of a deemed marketing authorisation and the extension is refused with the result that the deemed authorisation would thereupon expire, and there is an appeal against the refusal, the burden on the affected person resulting from the expiry of the deemed authorisation is suspended pending appeal: see the decision of the Higher Administrative Court for North Rhine Westphalia of 10 November 2005. That decision is authority for the proposition that Astellas was able to rely on its deemed authorisation for the indication for CLL pending appeal against the refusal to extend the deemed authorisation for CLL.[112]I now need to resolve the difference of opinion of the German law witnesses as to whether Astellas’ appeal also suspended the effect of the decision of July 2005 in relation to NHL and MM.[113]Professor Koenig stated that the whole of the decision of July 2005, including the parts of it which were not subject to appeal, was put into suspense. The reasoning in his report on this point is not easy to follow. He appeared to me to suggest that the question whether only the challenged part or the whole of the decision is in suspense depended on whether the challenged part is severable from the remainder. As I understood it, he relied on cases where an authority granted a permission subject to conditions and the conditions were then challenged on appeal. In some cases, an invalid condition may be severable so that it can be set aside leaving the remainder of the decision effective. In other cases, the grant of a permission may depend upon a condition being valid so that if the condition is invalid then there is no effective grant of permission. Put that way, the point appears similar to the position under section 44(4) of the German Administrative Procedure Act to which I referred earlier. Professor Koenig did not explain how the application of that test would produce the result that a successful challenge to the refusal of an indication for CLL would produce the result that the whole decision of July 2005 would be invalid. It seems to me straightforward to sever the part of that decision which Astellas did not challenge from the part of it which Astellas did challenge.[114]In cross-examination, Professor Koenig added a further reason for his view that the appeal resulted in a suspension of the entirety of the decision of July 2005. He stated that it was not possible under German law, and for good measure under European law, to have two marketing authorisations for the same medicinal product. His view about European law appears to me to be contrary to Article 6 of the Directive and, after Professor Koenig gave his evidence, I was given evidence of a number of examples where the German authorities have granted more than one marketing authorisation for the same medicinal product. Professor Koenig did not refer me to any provision of German law to support his assertion.[115]I am not able to accept Professor Koenig’s evidence as to the effect of the appeal by Astellas on the July 2005 decision. He accepted that his conclusion was “paradoxical”. He also accepted that a result whereby Astellas’ appeal would permit them to market Ribomustin for breast cancer would be unexpected and not in the public interest. My principal reasons for rejecting his evidence on this point were that he was not able to refer me to anything which supported his conclusion and the reasons he put forward for his conclusion are not acceptable. I prefer Professor Gassner’s evidence as to the effect of Astellas’ appeal. That appeal did not suspend the effect of the July 2005 decision in relation to NHL and MM.[116]My finding means that in July 2005, BfArM issued a valid marketing authorisation of Ribomustin for the indications NHL and MM. Accordingly, Ribomustin will be a reference medicinal product for the purposes of Article 10 of the Directive unless something subsequently occurred which produced the result that the authorisation was cancelled or revoked with retrospective effect, so that one would proceed on the basis that it had never existed. Astellas contends that such an event did indeed occur; it refers to the terms agreed between Astellas and BfArM in 2011 which led to the settlement of the appeal against part of the decision of July 2005.[117]The terms of settlement of the appeal were essentially contained in two letters from the attorneys for Astellas to the Adminstrative Court of Cologne on 29 June 2011 and 22 December 2011. The parties are not agreed as to the meaning and effect of those letters. The original letters were written in German and I have been provided with a translation of them although the parties are not wholly agreed as to the accuracy of the translation.[118]The parties agree that earlier correspondence leading up to the two letters referred to above is admissible as an aid to construction of the letters. The parties are also agreed that the process of interpretation of the letters should be in accordance with sections 133 and 157 of the German Civil Code. Section 133 provides that when a declaration of intent is interpreted, it is necessary to ascertain the true intention rather than adhering to the literal meaning of the declaration. Section 157 provides that contracts are to be interpreted as required by good faith, taking customary practice into consideration.[119]I will now refer to a number of matters before referring to the detailed terms of the two letters. On 16 November 2005, there was a meeting between Astellas and BfArM. The decision of July 2005 was referred to as a marketing authorisation for the purposes of the Directive. There was discussion as to whether that authorisation could be used as the basis for a mutual recognition procedure under the Directive and BfArM stated that it could not be so used because that procedure required an authorisation which was “legally valid in all parts”; the suggestion appeared to be that Astellas’ challenge to the refusal of CLL as an indication meant that the authorisation could not be the basis of the mutual recognition procedure. I did not receive any submissions as to whether that opinion was correct. In fact, Astellas did not subsequently rely on the mutual recognition procedure but instead applied for authorisations for Levact under the decentralised procedure.[120]On 22 November 2005, Astellas applied for a suspension of its appeal. Its stated reasons were that it was carrying out further studies into the treatment of CLL and it wished in due course to apply to BfArM to vary the authorisation of July 2005. It indicated that it would withdraw the appeal if BfArM approved the use of Ribomustin for CLL. On 23 December 2005, the Administrative Court granted a stay of the appeal. The stay was continued thereafter with the result that there was no substantive step in the appeal until it was withdrawn at the end of 2011.[121]Astellas and BfArM met the Deputy Ombudswoman on 23 August 2006. It was stated that the July 2005 authorisation was the first marketing authorisation for Ribomustin in accordance with the Directive. BfArM explained that that they applied Annex 1 of the Directive when assessing the efficacy of the product.[122]By July 2010, Astellas had received a marketing authorisation for Levact under the decentralised procedure. The authorisation included an indication for CLL. The authorisation for NHL and MM was narrower than the authorisation of July 2005. On 5 November 2010, the attorneys for Astellas wrote to the Administrative Court reporting on the position under the decentralised procedure. They referred to a need for the July 2005 authorisation to be fundamentally amended to bring it into line with the authorisation for Levact. They proposed that BfArM “annuls” the decision in July 2005 (or possibly only the part of it which was challenged in the appeal), that Astellas would withdraw the appeal and when its marketing had been brought into line with the authorisation for Levact, it would withdraw the deemed authorisation.[123]On 14 January 2011, the attorneys for Astellas wrote again to the Administrative Court suggesting that “the challenged ruling” be “lifted”. On 25 January 2011, BfArM wrote to the Administrative Court stating that it was not necessary to “lift” the earlier ruling. On 11 February 2011, the attorneys for Astellas wrote again to the Administrative Court explaining the differences between the indications in the July 2005 authorisation and the Levact authorisation. They said that withdrawing the appeal would make the July 2005 decision final and that it was not in the parties’ interest to have lengthy amendment proceedings following the withdrawal. They therefore suggested that the July 2005 decision be “lifted”.[124]On 22 February 2011, BfArM wrote to the Administrative Court in response to the letter of 11 February 2011 and the attorneys for Astellas wrote again on 17 March 2011. At this stage the parties were not in agreement as to the steps to be taken. On 19 May 2011, the attorneys for Astellas wrote again to the Administrative Court. They suggested there would be problems if the challenged decision of July 2005 became final on withdrawal of the appeal and that it was appropriate to “tackle the problem at the root”. They then proposed a way forward. BfArM then agreed that suggestion subject to an amendment and the attorneys for Astellas wrote to the Administrative Court on 29 June 2011 in these terms (I have adapted the translation in the bundle to accord with the submissions of the parties at the trial):
“Our position is as follows: The Plaintiff agrees with all the Defendant’s proposed amendments. We therefore summarise the agreed final version of the settlement again below: 1. Both parties apply for a stay of proceedings. 2. The Plaintiff undertakes, in the terms of the Drugs Act §31.1.2, to waive fictitious licensing in the terms of the Drugs Act §105 in the fourth quarter of 2011. Such waiver, in the terms of the Drugs Act §31.1.2, means the drug covered by the fictitious licence under the Drugs Act §105 can no longer be circulated. 3. The Parties agree that the waiver of fictitious licensing under the Drugs Act §105 also renders the challenged Nachzulassung decision ineffective and inapplicable. 4. The merits of the legal dispute concerning the challenged and non-definitive Nachzulassung ruling are therefore settled. 5. To render a cost award by the Court after settlement of the main issue in the terms of the Administrative Courts Ordinance §161 superfluous and finally to meet the costs of the proceedings, the Plaintiff declares itself willing to withdraw its suit by the end of 2011, in order to trigger the cost consequences of the Administrative Courts Ordinance §155.2 Please therefore order a suspension of the proceedings in accordance with the agreed point 1 of the settlement. The Plaintiff will waive the fictitious licensing under no. 2 and declare the withdrawal of its suit as per no. 5 by the end of 2011.”
[125]On 22 December 2011, Astellas wrote to the Administrative Court as follows:
“… we hereby declare, in the terms of the Drugs Act §31.12.2, that we waive fictitious licensing in the terms of the Drugs Act §105 for Ribomustin® (licence no. 3000336.00.00) with effect from 31 December 2011. Such a waiver means the product Ribomustin®, which has a fictitious licence under the Drugs Act §105 can no longer be circulated. The distribution of Ribomustin® is therefore discontinued as of 31 December 2011. Following the Commission’s positive decision, of 7 July 2010, on the licensing of the drug for human use “Levact and related designations” containing the active agent “Bendamustine,” in the terms of Article 29 of Directive 2001/83/EC, of the European Parliament and of the Council, and of the licensing ruling of [BfArM] of 15 December 2010 for the drug Levact (licence no. 70972.00.00), bendamustine hydrochloride will be circulated in Germany exclusively on the strength of this licence from 1.1.2012. As of 31 December 2011, Astellas Pharma GmbH will withdraw the lawsuit pending before the Administrative Court of Cologne (7 K 4982/05) and meet the costs of these proceedings.”
[126]On 30 December 2011, Astellas withdrew its appeal against part of the decision of July 2005.[127]I have the following comments on the two letters quoted above. The reference to the Drugs Act is to the GMA. Section 31.1.2 of the GMA provided that a marketing authorisation could expire by written renunciation, that is, the authorisation holder can give up the authorisation. In such a case, the renunciation takes effect in accordance with its terms, either immediately or from a future date, but not retrospectively. The letters refer to the “fictitious” licensing whereas I have referred to the authorisation prior to the July 2005 decision as a deemed authorisation. That deemed authorisation was granted by an ordinance of 1990 and not by section 105 of the GMA, which provided for the prolongation of a deemed authorisation. The letters appear to distinguish between the deemed authorisation and the challenged decision or Nachzulassung as they refer to waiving the deemed authorisation and thereby making the Nachzulassung decision ineffective and irrelevant. However, in the letter dated 22 December 2011, they give the licence no. 3000336.00.00 for the deemed authorisation; this was the number given by BfArM to its authorisation and the original number for the deemed authorisation was 3000336. They also refer to the Nachzulassung decision being non-definitive.[128]There are certain legislative provisions which form part of the background to the two letters. Under section 48 of the Administrative Procedure Act, an unlawful administrative act may be withdrawn, either retrospectively or for the future. Under section 49 of that Act, a lawful administrative act may only be revoked for the future. Thus, the July 2005 decision in relation to NHL and MM, as a lawful administrative act, could only be revoked for the future and not retrospectively. Further, section 31 of the GMA and Article 126 of the Directive are also relevant by way of background. I have already referred to section 31 of the GMA which allows an authorisation holder to renounce its authorisation, but not retrospectively. Article 126 of the Directive provides that a marketing authorisation may not be revoked except on the grounds set out in the Directive.[129]The two letters appear to have been written on the common assumption made by Astellas and BfArM that the appeal had the effect that the whole of the decision of July 2005 was suspended and that Astellas was marketing the product for the indications for NHL, MM and CLL under the original deemed marketing authorisation. Astellas and BfArM agreed that Astellas would give up that deemed marketing authorisation with effect from 31 December 2011. They also appeared to agree that giving up the deemed marketing authorisation would mean that the July 2005 decision would then become irrelevant so that the merits of the dispute about CLL and the appeal need not be further considered.[130]If the common assumption of Astellas and BfArM as to the suspension of the decision of July 2005 had been correct, then a question could arise as to whether a marketing authorisation which had been granted, which was then suspended pending appeal and which appeal was then withdrawn on the basis that it had become irrelevant, was nonetheless a marketing authorisation which had been “issued” or “authorised” within Articles 6, 8 and 10 of the Directive. It might be said that such an authorisation had been “issued” or “authorised” in that way, especially where there was no challenge by anyone to the merits of the decision in July 2005 to grant an authorisation for NHL and MM. Astellas submitted that this would not be the result because it and BfArM agreed in the letters that the July 2005 decision was not definitive. However, it would be open to argument whether that agreement would be effective for the purposes of Article 10, in particular, where the position of third parties is relevant.[131]However, as I have earlier held, the common assumption of Astellas and BfArM as to the suspension of the entirety of the decision of July 2005 was incorrect. At the time of the settlement of the appeal, Astellas had the benefit of a marketing authorisation for NHL and MM and a deemed authorisation for CLL. The settlement resulted in Astellas renouncing the deemed authorisation but there is a question as to the effect of the settlement on the marketing authorisation for NHL and MM. I doubt if it was open to Astellas and BfArM to agree that the July 2005 decision was non-definitive retrospectively when the correct legal position was otherwise and I was not referred to any provision which would have allowed that to happen; sections 48 and 49 of the Administrative Procedure Act do not so provide. Conversely, Astellas and BfArM plainly intended that the July 2005 marketing authorisation for NHL and MM would not continue in effect after 31 December 2011. I consider that the effect of the settlement was that Astellas renounced both the July 2005 marketing authorisation and the deemed authorisation for CLL with effect from 31 December 2011.[132]I heard evidence from Dr Patzak who was involved on behalf of Astellas in connection with the negotiations which led to the settlement of the appeal. He told me that Astellas wanted to settle the appeal on terms which would bring about the result that the July 2005 decision would be nullified for all purposes as that would enable Astellas to argue that the July 2005 decision was not a marketing authorisation from which the data exclusivity period under Article 10 of the Directive would be measured. He said that Astellas deliberately drafted the terms of settlement to produce that result. I expect that Dr Patzak’s evidence is correct. It explains what was really behind some of the rather puzzling justifications which were put forward by Astellas to BfArM at the time as to why Astellas wanted BfArM to “annul” the decision, which BfArM declined to do. However, what Dr Patzak told me in evidence was not something that Astellas communicated to BfArM at the time. Astellas’ unexpressed intentions at the time are not an aid to the interpretation of the terms of settlement. Having construed those terms against the admissible background, I conclude that Astellas has not achieved what it says it privately wanted to achieve.[133]The result of the above is that the July 2005 decision was a marketing authorisation for Ribomustin for the indications for NHL and MM within the meaning of Articles 6, 8 and 10 of the Directive.

The application for a reference under Article 267 of the TFEU

[134]Before the trial, Astellas had applied for certain points of EU law to be referred to the Court of Justice under Article 267 of the TFEU. I declined to make a reference on that application. One reason for my decision was that it was premature to refer any issues of EU law when it was Astellas’ case that even if it lost on those issues, it still wished to rely on the terms of the settlement of the appeal, raising issues of German law but not EU law, in support of its case that the July 2005 Decision had been agreed to be void ab initio.[135]At the end of the trial, Astellas again submitted that the issues of EU law should be referred to the Court of Justice. In correspondence following the hearing and before this judgment was handed down, the solicitors of Astellas told me that if it was unsuccessful in these proceedings, it was likely that it would wish to appeal my decision to the Court of Appeal. Accordingly, there is still the possibility that Astellas will contend that even if the issues of EU law are decided against it, it ought still to succeed overall on the basis of the effect of the terms of settlement of the appeal. Accordingly, it is still premature to refer issues of EU law, which may not be determinative of this dispute, to the Court of Justice.[136]There is now an additional reason for not making a reference in this case. The MHRA has now decided to grant a marketing authorisation to Accord. That decision may be, subject to permission being granted to Astellas, the subject of a judicial review. As I explained earlier in this judgment, it is not yet clear whether the issues which were argued at this trial will be relevant for the disposal of the judicial review proceedings. This makes it even less appropriate that issues of EU law should now be referred to the Court of Justice.

The result

[137]In the result, I will make the declarations sought by Accord, which are in accordance with my conclusions, and I will dismiss Astellas’ counterclaim which claimed declarations in the opposite sense.