July 21, 2014

English Administrative Court highlights unresolved issues concerning EU pharmacovigilance law and enforcement under the Penalties Regulation

Arnold & Porter Advisory

This case raises important issues concerning the powers of the European Medicines Agency (EMA) and the powers and obligations of a national authority (in this case the Medicines and Healthcare products Regulatory Agency (the MHRA)) when conducting inspections relating to the adequacy of the pharmacovigilance systems of the holder of a marketing authorisation and whether it has complied with its obligations relating to the reporting of suspected adverse reactions associated with the use of its products, particularly where an infringement procedure relating to such matters is pending. In this case the infringement procedure relates to an investigation under the Penalties Regulation (EC) No 658/2007 (the Penalties Regulation)1 being conducted by the EMA; seemingly the first of its kind.


In its judgment of 9 July 2014, the English Administrative Court (the Court) found that the MHRA had acted lawfully in carrying out a re-inspection of the pharmacovigilance systems of Roche Registration Limited (Roche) in October and November 2013.2

Roche argued that:

1.    the requests made by the EMA to the MHRA to obtain information were unlawful under the provisions of the Penalties Regulation relied upon by the EMA;

2.    the failure of the MHRA to explain properly that the information it sought through the re-inspection would be used in a quasi-criminal investigation was procedurally improper; and

3.    that the information provided by the MHRA to the EMA pursuant to the latter's requests under the Penalties Regulation contained fundamental errors of law, including that the MHRA applied new law and guidance to activities that pre-dated recent changes in EU law relating to pharmacovigilance obligations and that it should not be treated as having failed to report information that had not been reported to it by service providers involved in the administration of patient support programmes.

The Court declined to rule on the alleged errors of law, despite finding them properly arguable, because that would entail a risk of reaching conclusions inconsistent with those that might later be reached by the Commission or the EU courts. It also declined to make a reference to the Court of Justice of the European Union, despite having recognised that the questions were potentially important. It took the view that, depending on the outcome of the infringement procedure, Roche could pursue these issues in the European Court and that, until then, it was not appropriate that the national Court should intervene in a way that might delay the normal progress of the regulatory procedure. The Court agreed that the first ground for the challenge was also arguable, but declined to rule on it for similar reasons. It also declined to make a reference because it considered the MHRA was entitled to supply information to the EMA under different provisions and, therefore, the issue of interpretation of the EMA's powers under the Penalties Regulation was academic. It dismissed the second ground of claim as lacking merit on the facts. 

For the present, the main implication of this case is that a marketing authorisation holder (MAH) must assume that any material provided to the national competent authorities may be passed to the EMA and used in possible infringement procedures. In particular, where a procedure is already pending, companies should consider carefully their legal rights relating to procedural fairness when addressing further questions that are relevant to such procedures. 

Important issues on the interrelationship between the powers of the national competent authorities and the powers of the EMA under the Penalties Regulation remain unresolved. It is understood that Roche has been given permission to appeal the decision to the Court of Appeal. Unusually this was given by the Judge that heard the case, and this is a further indication that Roche's claim was properly arguable, as well as the importance of the issues.

Background Facts

This case concerned a judicial review brought by Roche, the MAH for various centrally authorised products, against the MHRA, in which the EMA intervened, but on jurisdiction issues only. The case centred on a re-inspection conducted by the MHRA following an earlier inspection, in which the MHRA had made findings of alleged non-compliance with pharmacovigilance obligations to which the MAH is subject. In particular, it was alleged that a large number of reports of suspected adverse reactions related to non-interventional programmes (and in particular a programme run by Genentech (a Roche affiliate) in the USA which provided advice relating to insurance and other funding of products also marketed in the EU) had not been passed by service providers or Genentech to Roche for evaluation for reporting purposes.

As a result of that earlier inspection, and at the request of the Commission, in October 2012 the EMA notified Roche that it was initiating an infringement procedure under the Penalties Regulation. Thereafter the MHRA collaborated with the EMA in relation to that procedure whilst also planning re-inspection in accordance with normal follow-up of deficiencies noted on the first inspection. Roche was not aware that during this period the EMA had sought specific information from the MHRA under Article 8.3 of the Penalties Regulation as part of its infringement procedure, including information arising out of the re-inspections planned. Roche stated that it understood the re-inspection to be routine and, therefore, no special precautions were taken to protect the company's position.

The MHRA sent its final re-inspection report and responses to requests made under the Penalties Regulation to the EMA early in 2014 and these recorded full co-operation from Roche, but also found continuing deficiencies including two critical findings. The EMA has concluded its inquiry and submitted its own report to the Commission, Roche and the Member States for their consideration. The Commission has not announced its decision.

Background Law

In summary, Article 19.1 of Regulation 726/2004 (governing the centralised system) declares that the authorities of a Member State are responsible for verifying, on behalf of the EU, that the MAH is complying with the pharmacovigilance requirements set out in Directive 2001/83. Article 111 of the Directive states that such authorities shall, in co-operation with the EMA, ensure compliance by means of inspections and may share information with the EMA. UK law in turn, through the provisions of the Human Medicines Regulation 2012, gives the MHRA power to inspect premises in order to determine whether there has been a breach of the relevant EU provisions, and in circumstances of non-compliance, to bring alleged deficiencies to the attention of the MAH; give the holder the opportunity to submit comments; and inform the other EEA Member States, the EMA and the Commission.

Under Article 8 of the Penalties Regulation the EMA is empowered to request information and documents from the MAH (Article 8.1) and to request cooperation from national competent authorities in various ways, including the performance of inspections (Article 8.2), and to ask "any natural or legal person" to provide information relating to an alleged infringement (Article 8.3).

Where the Commission decides to pursue a complaint of non-compliance from the EMA, the holder of the marketing authorisation is informed and given a right of reply, including (if the holder wishes) an oral hearing. If the Commission believes the holder has infringed the pharmacovigilance requirements it may fine the holder a sum not exceeding 5% of the holder's Community turnover in the previous business year. A right to legal representation during the infringement procedure is expressly described.

Findings of the Court

As a preliminary point, the Court dealt with the jurisdiction issues raised by the EMA (and to a lesser extent, the MHRA). The EMA claimed that the EU courts have exclusive jurisdiction to hear any claim relating to an infringement procedure under the Penalties Regulation and, therefore, the national Court should not hear Roche's application. The MHRA argued that the Court had jurisdiction and could rule that its actions were lawful, but not declare that the requests made by the EMA under the Penalties Regulation were unlawful and should not, as a matter of discretion, address other issues of law relevant to an EMA/Commission procedure where, if the Commission decided against Roche, the company could appeal to the General Court.

The Court rejected the EMA's argument, and stated that even where there is a challenge to a Commission decision that has already been taken (which is not the case here), the national Court still has jurisdiction, even if only to stay the proceedings or to make a reference to the European Court. In particular, in this case, the challenge was to the acts of a domestic body (the MHRA) exercising national powers (under the Human Medicines Regulation 2012). The basis for that challenge is an alleged misunderstanding by the MHRA of EU law, but the Court found that there is no reason in principle why the national Court cannot interpret and apply EU law. The real question was, therefore, not one of jurisdiction, but rather to what extent the national Court could and should pre-empt determinations on the issues in question by the Commission and EU courts.

Ground 1 - The Provision of Documents to the EMA

The first ground of challenge concerned Article 8 of the Penalties Regulation, which regulates requests for information by the EMA. The EMA submitted two requests for information to the MHRA under Article 8(3), to which the MHRA responded. Roche claimed that Article 8(3) relates to "natural or legal persons", and therefore did not apply to requests to national competent authorities. Therefore, Roche contended that the MHRA should not have provided the information. It argued that the proper legal basis for a request to the MHRA is Article 8(2).

The Court found that Roche's challenge was properly arguable, but that it wholly depended on the allegation that the EMA had no power under Article 8(3) to issue the request. This was in effect a challenge to the EMA's power. In line with established case law from the Court of Justice of the European Union, a national Court cannot declare a domestic measure that was giving effect to a European measure to be invalid.3 As a result, the Court concluded that it could not declare the MHRA's responses to the Article 8(3) requests unlawful, as it would in effect constitute a declaration on the lawfulness of the act of a Community body (in this case the EMA).

However, the Court accepted that in such situations it was able to make a reference to the Court of Justice in order to get a definitive answer on the point of European law. However, the Court in this case decided that it was not necessary to refer such a question. It found that the information contained in the MHRA's responses to the EMA's requests could have been lawfully provided to the EMA under Article 111 of the Directive (i.e., outside the provisions of the Penalties Regulation), and, therefore, there was no need to determine the question.

The claim on ground 1 was, therefore, dismissed. If left undisturbed this finding means that, even if it is the case that the EMA is unable to request information from the national competent authority under Article 8(3), the national authority will likely be able to rely on its broader powers and duties of co-operation such that any information provided to national competent authorities may be requested by, and provided to, the EMA and Commission and used as part of an infringement procedure.

Ground 2 - Purpose of the Investigation

The second challenge concerns the allegation that Roche was not told, or not properly told, that the MHRA's findings, or documents or material obtained during the re-inspection, would or could be passed to the EMA for use in the infringement procedure. Roche contended that this deprived it of the possibility to consult lawyers and exercise its rights (including the right to silence) in an informed manner in relation to a quasi-criminal procedure that could lead to very substantial fines. It considered that the MHRA took advantage of a culture of co-operation and openness that prevails in relation to routine inspections. Roche relied on a variety of laws including Article 6 of the European Chamber of Human Rights, the Police and Criminal Evidence Act 1984 and general common law obligations imposed on public bodies not to act unfairly. However, the Court thought it sufficient to address the overarching public law requirement to act fairly.

In this respect the Court found that Roche was not misled as to the nature of the re-inspection and that Roche should have understood that the MHRA is under a duty to co-operate with the EMA, even though the details of that co-operation were not matters that Roche was entitled to know, and fairness did not demand that it be told. Further, the Court found that Roche was told at the start of the re-inspection that the results would (or at least might) feed into the infringement procedure. As a result, the Court concluded that the MHRA had not taken unfair advantage of Roche or abused the inspection process and, therefore, dismissed ground 2 of the claim.

Ground 3 - Fundamental Errors of Law

This ground concerns two allegations of errors of law:

  • The identity of the holder of the marketing authorisation: Roche submitted that only the activities of the holder of the marketing authorisation are relevant for the purpose of an infringement procedure under the Penalties Regulation, and, contrary to certain guidance documents, this does not extend to other persons with whom the holder has entered into contractual arrangements. Therefore, it contended that it should not be treated as having failed to report information that service providers to Genentech had received, but failed to pass on.
  • The issue of retrospective application of new rules and guidance: In July 2012, the pharmacovigilance legislation and guidance substantially changed in the EU. Roche disputed that the new provisions applied to the re-inspection, as this related to Roche's conduct before July 2012, and, therefore, before the changes came into force.

The Court found both these issues arguable, but it declined to determine them. It decided, applying the principles identified in previous case law,4 that it would be wrong in principle to pre-empt the decision of the Commission (and ultimately the EU Courts) either by making a substantive ruling or a reference to the Court of Justice. The Court noted that Roche still has opportunities to bring its arguments before the Commission during the infringement procedure. Another significant consideration it said was the fact that issues of public health and safety are engaged; the Court decided that public interest is best served by allowing the regulatory procedure to take its course without external interference or delay.


This case raises many important questions and few answers. Subject to the outcome of any appeal by Roche, pharmaceutical companies will have to await the outcome of the Commission's deliberations before receiving any indication on how these important provisions will operate as a matter of European law. When potentially large fines are at stake, this lack of clarity is far from ideal, but the uncertainties of EU law are not a new issue for pharmaceutical companies.

  1. Commission Regulation (EC) No 658/2007 of 14 June 2007 concerning financial penalties for infringement of certain obligations in connection with marketing authorisations granted under Regulation (EC) No 726/2004 of the European Parliament and of the Council.

  2. CO/393/2014, The Queen on the application of Roche Registration Limited v Secretary of State for Health (2014) EWHC 2256, available here.

  3. Case 314/85, Foto-Frost v Hauptzollamt Lubeck-Ost (1987) ECR 4199.

  4. Case C-344/98, Masterfoods (2000) ECR 1-11369.

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