Directive 2011/62/EU, better known asThe Falsified Medicines Directive” or “FMD”, came into force on 2 January 2013, with the aim of preventing falsified medicines from entering the legitimate supply chain in the European Union.

Delegated Regulation (EU) 2016/161 has since supplemented FMD, setting out detailed rules for new safety features to appear on the packaging of prescription-only and some non-prescription medicines to enable them to be verified and authenticated:

  • a unique identifier (a 2D data matrix code or barcode) is to be placed on product packaging, to be scanned at fixed points along the supply chain; and
  • anti-tamper devices (ATDs) are to be applied to product packaging.

At each stage of the supply chain, products will be inspected to ensure they have not been tampered with, have not previously been dispensed and that the packaging is intact.

The Regulation will apply from 9 February 2019, and Marketing Authorization Holders will by then have to place the above safety features on the packaging of medicines regulated. These obligations are putting additional pressure on all in the pharmaceutical supply chain in the EU, not least parallel traders.

Parallel traders, who import medicines from lower-price into higher price markets, are considered ‘manufacturers’ under FMD, and will have to bolster their packaging and IT infrastructures. To comply, when a parallel distributor receives packs of medicine from another EU country, they must first remove the unique identifiers and ‘decommission’ these packs from the country of origin’s database. They must then re-package those medicines with new unique identifiers and ATDs, and re-commission them.

Although certain repackaging will not amount to registered trade mark infringement as established under EU case law, increased obligations upon parallel traders as a result of FMD could be a positive outcome for trade marks owners and their licensees. That said, packaging designs will need careful managing by parallel traders and originators alike, with additional features taking up space previously available for logos or distinctive get-up. This could reduce the opportunity for trade mark protection.

Brexit, set for 29 March 2019, adds uncertainty to the law and practice around parallel importing. The current UK Trade Marks Act (1994) effectively maintains a form of regional exhaustion applicable to the EEA. Unless or until a deal is reached with the EU, it is unclear whether the UK will remain in the EEA or in a relevant customs union with the EU. The UK Government suggests – in its 23 August 2018 guidance ‘How medicines, medical devices and clinical trials would be regulated if there’s no Brexit deal’ – that “the UK will unilaterally align to the EU/EEA exhaustion regime from Exit day to provide continuity in the immediate term ..” but as a “temporary fix”. In the longer term, without amendment of the 1994 Act, the UK would revert to its pre-1973 position of international exhaustion, something that those supporting strong trade marks rights wish to avoid. Watch this space!