Medicines in transit through the EU are not subject to the EU medicines regulations for licensing purposes. However, the implementation of the Falsified Medicines Directive (FMD) has, from our experience, led to greater oversight of such medicines in the UK, even where not falsified, by the Medicines and Healthcare Products Regulatory Authority (MHRA). The same is likely to be true for other EU countries.
Goods in transit
Goods in transit are those that are within the EU customs territory but which have not been released for free circulation in the EU. Instead, the goods will have been entered into one of the customs suspensive procedures, such as transit, customs warehousing, inward processing or processing under customs control. Each procedure has specific requirements which have to be met for the goods to be treated as being covered by one of them.
Medicines regulation in the UK
The licencing regime in the UK is set out in the Human Medicines Regulations 2012 (“the HMR”) and applies to medicinal products that have been imported into the UK, are manufactured or otherwise dealt with within the UK or which are being exported from the UK.
“Import” is defined in Regulation 4 of the HMR as:
“import, or attempt to import, into the United Kingdom, whether by land, sea or air”.
There is no case law or other guidance that defines “import” more specifically in the context of the HMR (or the preceding legislation). The status of goods in transit through the EU under a customs suspensive procedure, and in particular whether such goods have been imported into the EU, has, however, been considered in a number of cases relating to the infringement of intellectual property rights (in particular trade marks).
This line of cases has established that such goods, although physically in the EU, are not considered to have become Community goods or goods that are released for free circulation and so have not been “imported” into the EU. They have also established that such goods cannot, by definition, be “exported” from the EU (having not been present in the EU in the first place). Accordingly, the HMR do not apply to goods in transit through the EU under a customs suspensive procedure the requirements of which have been fully complied with.
The FMD and “introduced goods”
However, the FMD has established a new concept of “introduced” medicines and imposed an obligation on EU member states to take measures to prevent introduced medicines entering into circulation if there are sufficient grounds to suspect that these products are falsified. “Introduced medicines” are medicinal products that have been brought into the EU but are not intended to be released for free circulation – i.e. goods in transit. Falsified medicines are broadly defined as medicines with a false representation of identity, source or history.
There are two key consequences of this new obligation:
the repeal of the “import for export” exemption; and
greater MHRA oversight of goods in transit.
“Import for export”
Prior to implementation of the FMD, there was an exemption in the HMR from the licensing requirements for medicinal products that were imported into the UK and then re-exported unaltered. The HMR were amended to remove this exemption with effect from 20 August 2013. The result of this is that anyone importing a medicine from outside the EEA for export to a third country must now hold a wholesale dealer’s licence. The obligation to hold a wholesale dealer’s licence also means the dealer will be responsible for ensuring the medicinal products are not falsified and will be obliged to report any suspected falsified medicines to the MHRA.
Greater MHRA oversight of goods in transit
Previously goods in transit through the UK have been of relatively minor importance to the MHRA as the MHRA was only responsible for them if diverted on to the UK market. The new obligation, however, means that the MHRA has a greater responsibility to monitor medicines to try to prevent falsified medicines from entering into circulation. This will require it to make checks of goods in transit to ensure they do not contain any falsified medicines.
The MHRA does not consider it possible to oversee medicines being shipped straight through the UK as they will be present for only a very short time. However, products in a customs suspensive regime, such as customs warehousing and inward processing, are likely to be physically present in the UK for longer so that it is possible for the MHRA to carry out checks. Considering that routine checks are not practical, the MHRA favours an intelligence led approach to deciding which consignments should be subject to verification. It is also likely to rely on ‘spot checks’.
Our own experience has been that, where the MHRA does check a consignment, it will not limit its investigations to ensuring that there are no falsified medicines, but will also look into whether the requirements of the customs suspensive procedure relied on have been followed correctly. If not, the products concerned will be taken to have been imported into the UK and therefore to be subject to the UK licensing regime. Given the holder of the products is unlikely to have complied with this regime, this could have significant implications as the holder will be in breach of both the customs rules and the HMR.
Medicines in transit through the EU subject to a customs suspensive procedure are not subject to the EU medicines regulations, as they have not been ‘imported’ into the EU customs territory. The FMD has, however, introduced an obligation on member states to take measures to prevent introduced medicines entering into circulation if there are sufficient grounds to suspect that these products are falsified. These new obligations have led to two consequences in the UK - the repeal of the “import for export” exception to the medicines licensing regime and greater oversight of medicines in transit in the UK, even where not falsified, by the MHRA. As a result companies transiting medicines through the UK, and most likely other EU countries, must now be even more careful to comply with the customs rules or risk sanctions from both customs authorities and medicines regulators.