Insights

Catherine CHABERT, Esq., Alain Bensoussan, Avocats, Lyon, France

Yannis Chryssospathis, M.&P. Bernitsas Law Offices, Athens, Greece

Ian S. Forrester, Q.C. and Iker Arriola, Esq., White & Case LL.P. incorporating Forrester Norall & Sutton

Dr. Peter Bratschi, lawyer and Ursula Eggenberger Stöckli, lawyer and pharmacist, Bratschi Emch & Partner Advokaturbureau, Bern, Switzerland

Austria: Schönherr Rechtsanwälte, Tuchlauben 17, P.O. Box 41, A-1014 Vienna;

Belgium: White & Case LL.P. incorporating Forrester & Sutton, 62, rue de la Loi, B-1040 Brussels;

Denmark: Jonas Bruun, Bredgade 38, DK-1260 Copenhagen K;

Finland: Castrén & Snellman, Attorneys at Law, Erottajankatu 5A, FIN-00130 Helsinki;

France: Alain Bensoussan, Avocats, 194 bis, rue garibaldi, F-69428 LYON cedex 03;

Germany: Ehlers, Ehlers & Partner, Rechtsanwaltssocietät, Widenmayerstrasse 29, D-80538 Munich;

Greece: M. & P. Bernitsas Law Offices, 5, Lykavittou Street, GR-106 72 Athens;

Hungary: S.B.G.&K. PATENT AND LAW OFFICES, Andrássy ÚT 113, H-1062 Budapest, Mailing address: P.O. Box 360, H-1369

Italy: Avvocati Associati Franzosi Dal Negro Pensato Setti, Via Brera 5, I-20121 Milan;

Netherlands: Stibbe, Strawinskylaan 2001, NL-1077 ZZ Amsterdam;

Norway: Advokatfirmaet Haavind Vislie DA, Raadhusgaten 27, P.O. Box 359, N-0101 Oslo;

Portugal: Carlos de Sousa e Brito & Associados Advogados, Rua Castilho, ◦712◦ Dto., P-1250-068 Lisbon;

Spain: Jausàs, Nadal & Vidal de Llobatera, Advocats, Avda. Diagonal, 407 bis, E-08008 Barcelona;

Sweden: RydinCarlsten, Advokatbyra AB, Norrmalmstorg 1, P.O. Box 1766, SE-11187 Stockholm;

Switzerland: Bratschi Emch & Partner, Advokaturbureau, Bollwerk 15, P.O. Box 5576, CH-3001 Bern;

Italy’s national healthcare service was established in 1978. It followed the UK "Beveridge" model by offering health prevention and promotion services and treatment for all members of the population on an equal basis, and was financed from tax contributions. This model remained unchanged for years, despite many adjustments and clear evidence that Italy’s budget could not afford the Beveridge utopia. Pharmaceutical expenditure has never exceeded 15% of total public expenditure on health. However, it was a focal point of the most recent budgetary laws, which included provisions for price cuts, delisting of products from reimbursement etc.

In a sudden new development, 12 Articles of the Legislative Decree of September 18, 2001 (this is a form of legislation enacted by the executive, which is subject to parliamentary approval within 60 days but enters into force immediately) will radically change the centralised model. The new legislation gives Italy’s 20 regions (the country’s administrative subdivisions) power to determine autonomously the rules on reimbursement prices and distribution of medicinal products, and to introduce directives allowing pharmacists to substitute a generic for a prescribed proprietary product. Moreover the regions, through the hospitals, will purchase large quantities of pharmaceutical products directly through centralised procurement systems, not only for in-house use on hospital patients, but also for dispensing to the public through wholesalers and pharmacy channels, under special collective agreements with wholesalers and pharmacists’ associations. The regions will be responsible for their own health budgets, and will have to cover deficits by increasing regional taxes or reducing healthcare coverage.

As this article was being written the new legislation was still being examined by Parliament, but the Berlusconi Government has such a large majority that any amendments are likely to be minor.

This devolution to the regions of such substantial powers in healthcare matters, leaving the central authorities only with responsibility for determining essential healthcare levels, is backed up the recent approval in a referendum of a constitutional reform aimed at giving the Italian Republic a federal form of government, where legislative and executive power is vested in the regions, except for matters specifically reserved by the Constitution to the central State, e.g. justice, defence etc. It is too soon to predict the full impact this "fundamental social-economic reform of the Republic" will have on the pharmaceuticals sector. However, the regionalisation of healthcare will bring about major changes in the balance of power, for instance between the currently omnipotent CUF (Single Pharmaceutical Committee) and the regional Health Departments. It may lead to significant differences between regions (including different lists or products or prices reimbursed). The "prescription power" of general practitioners will give regional authorities more scope to exercise their administrative power by determining which products should be purchased and distributed etc. All this will create a lot of hard work for planners in pharmaceutical companies. cb

All sorts of information and images are now published or broadcast by Internet. The spirit of freedom blowing through the Net and the philisophy of the Net economy, which seems to flourish independently of all rules drawn up in the past, often give the impression that there are no restrictions on what may be published or broadcast on the Net. However, this is far from true, and some people have already realised, to their cost, that the copyright rules and penalties for infringement, as well as the right to privacy, can apply with disconcerting severity on the Net. Nor does the protection offered by these rights apply only to world-famous music or cinema artists; they can also be enforced for the ordinary events of everyday life.

In this context it makes sense to consider how far it is possible, with impunity and in complete freedom, to publish or broadcast the contents of medical congresses over the Net in image or text form. This means examining the following four points:

• rights over one’s own image (droit à l'image),
• copyright,

• the rules governing advertising in the field of health,

• the rules governing the publishing or broadcasting of information, in terms of both accuracy and liability.

These four points, which range from the general to the specific, i.e. from the. classic rules applicable to organised events to those specifically applicable to the field of health, may make those wishing to broadcast medical congresses on the Net more vigilant, and lead to the establishment of appropriate management rules.

Under Article 9 of the French Civil Code, "everyone has the right to respect for his private life". Invasions of the right to privacy for one’s own image, contrary to this requirement, may easily take place if photographs taken or videos filmed during a congress are published or broadcast over the Net without the prior information and consent of the participants. According to uniform case law, the right to respect for private life gives everybody, including public figures, the right to object to the publishing or broadcasting of their image without authorisation, even in a public place. With regard to private places, the courts have ruled that "the publication in the press of a photograph of a person, taken by an amateur, and representing him/her in a private gathering with a caption revealing his/her identity undermines private life integrity". Prior authorisation is not enough if the image is diverted from the use for which it was originally agreed.

Accordingly, it is essential to include warning in congress presentation brochures and/or, at the latest, registration forms, to inform those taking part in a medical congress held a traditional conference venue or in a hotel, for which the participants have registered and which is therefore a private event, that photographs and/or an audiovisual work may be made with a view to subsequent publication or broadcasting in the press or on the Net, making it clear that participants have the right to object to this. The organiser must take such objections into account when publishing or broadcasting images of the event.

It would be advisable to provide participants with information relating to the processing of personal data from registration forms, in accordance with the provisions of the French Data Act of 6 January 1978.

Neither the media used for speeches at conferences nor the related images may be published or broadcast on the Net or any other medium without authorisation from the author, who has the sole right, pursuant to article L. 121-2 of the French Intellectual Property Code "to disclose his/her work". "Only the author (article L. 121-8 of the IP Code) has the right to gather his/her articles and speeches together in collections and to publish or authorise their publication in that form".

The exploitation right included in the author’s economic rights is made up, as might be expected, of the performance right and the reproduction right. Publication or broadcasting on a medium such as the Internet falls under the scope of the performance right unde rFrench law. In addition, it will be covered by the "making available" right provided for in Article 3 of the new EU Directive on Copyright in the Information Society.

While the traditional legal rules apply as strictly to medical congresses as to other events, some issues relating to the possible publishing or broadcasting of images or statements from such congresses are specific to the medical domain. They include advertising in the field of health and the reliability of health-related information.

Advertising by healthcare professionals, and of pharmaceuticals, is severely regulated. With regard to drug advertising, information published or broadcast on drugs may not be false or misleading, and must be distinguished from the protection granted to drug brands or laboratory marks under trademark law, which grants the rightholder a monopoly over use of the mark, with penalties for infringement.

Healthcare professionals must inter alia abide by Articles 13, 19 and 20 of the Code of Ethics, which bans advertisements in their favour or that of a third organisation, and specifies that medicine may not be practised as a trade, and that a professional must personally supervise "the use made of his name, title or declarations by public or private organisations to which he lends his support".The French Medical Association regularly reminds healthcare professionals that "prudence shall constitute a permanent rule both as to form and substance" and that they should always bear the notion of proportionality in mind. The requirement for healthcare professionals to check the use made of their declarations clearly shows the risk that they may be misquoted or used as a scientific approval or validation.

Congress organisers and sponsors should therefore take great care not to put themselves at risk by publishing or broadcasting premature, erroneous or imprecise information.

Publication or broadcasting at a medical congress of information which is not consistent with the strict requirements of scientific accuracy may affect three categories of people:

• healthcare professionals to whom the information is rightly or wrongly attributed,

• congress organisers, who are in the front line regarding communication,

• laboratories which partner and sponsor events and in a way act as scientific guarantee of debates which take place at them.

Suppose that erroneous or premature information suggesting that a classic medical treatment should be abandoned in favour of a new one is published or broadcast on the Net by the event organiser and/or the company in charge of collating and summarising the speeches made, and that as a result a patient is harmed. Any or all of those responsible for disseminating the information leading to such harm may be the subject of legal action, and each in turn may bring proceedings against the others. Even if the sponsor laboratory escapes being sued because it did not take part in the erroneous publication or broadcast, it will nevertheless be associated with the error by the media, and its public image will be harmed. Moreover, the laboratory may have a basis for claiming damages from the event organiser, and the closer his association with the litigious information, the higher the damages.

It is clearly wise to take steps to avoid such potential chain reactions, whose consequences may be extremely harmful. To decide to stop organising medical congresses or prohibit their publication or broadcasting via the Net would certainly be going too far. Precautions could take include drawing up guidelines on the organisation and holding of medical events, appointing an expert on communications and events in the field of health to assist in organising the event, and setting up a scientific committee to check the information published or broadcast both before and after the event. Such a committee could also validate the information to be published or broadcast over the Net. These initiatives may constitute the cardinal points of reliable, efficient and legal communication in the field of health, both from the absolute viewpoint of scientific truth and to protect consumers of health information. cb

Adapting Greek pharmaceutical law to EU legislation was not an easy task. After Greece acceded to the EU in 1981, the competent Greek authorities tried to act independently towards European rules by infringing fundamental provisions and principles of the Treaty of Rome. It took the EU many years to oblige the Greek Government to annul the establishment of the State-owned pharmaceutical industry and the fee paid by pharmaceutical companies in its favour. Although this issue has now been settled, the competent authorities (the Ministries of Health and Development) continue even today to infringe EU pharmaceutical legislation by applying only partly the provisions on the determination of the prices of medicinal products, and not applying at all those on how medicinal products are included in the list of products qualifying for reimbursement.

After more than six years, the European Commission’s complaint against Greece under reference A/95/4580 for infringements concerning the application of the Transparency Directive and the free movement of goods within the EU has not yet been referred to the Court of Justice. The Commission is considering closing the file, arguing that the main problem, i.e. the Greek price setting system for imported medicinal products, has been resolved. However the industry claims that under Greek law the prices of imported products are approved on the basis of the sale price to the wholesaler in the product’s country of origin, but only if the product is marketed in at least one European country. The Greek authorities have repeatedly been asked to abolish these provisions, which constitute a barrier to the free movement of goods in the EU, since they mean that if a medicinal product is not marketed in any EU Member State, its price in Greece will not be approved. The industry has therefore asked the Commission, through EFPIA, not to close the file until the provisions in question are abolished. The Commission has not yet reacted.

Moreover the authorities have recently begun to violate the Transparency Directive and the relevant national provisions by routinely failing to examine applications filed by companies for an increase in the prices of their products, and approving only price increases which the Board of the National Drug Organisation (EOF) has decided are necessary. These tactics mean that the authority is discriminating against products for which the board of the EOF does not consider that a price increase is necessary. This unjustified rejection of the price of a medicinal product infringes both the Transparency Directive and the relevant Greek national provisions, as well as the fundamental principle of the free movement of goods in the EU. The whole matter will be referred to the Commission, and a new complaint against the Greek government is very likely.

The authorities are currently working to establish a revised reimbursement list, using new criteria. It is not expected that this task will be completed before summer 2002. The law provides for a review of the reimbursement list every two years. This means that the reimbursement status of medicinal products included in the list will only be reviewed every two years, although the amended law gave a legal basis for the issuing of supplementary lists whenever the authority considered this appropriate. The review in question does not replace the industry request for a supplementary list to be issued every three months, as required by the Transparency Directive. A considerable number of medicinal products which were not included in the last supplementary list of July 30, 2001will therefore wait until revision of the list is completed before being included in it, even though the overall time limit for inclusion under EU and national legislation may not exceed three months.

The industry, through EFPIA, has asked the Commisison to intervene. After examining the matter, the Commission will probably take steps to ensure the Greek Government complies with the provisions of the Transparency Directive. cb

Directive 98/44/EC(1), the "Biotechnology Directive", requires EEA Member States to ensure that national patent legislation extends patent protection to biotechnological inventions which satisfy the criteria for patentability. The Commission began to examine the possibility of EU legislation in 1985, owing to industry complaints that EU inventiveness in biotechnology enjoyed less protection than was available in the US and Japan. The obstacle was that some national patent laws did not contemplate the grant of a patent over a living organism such as a bacterium, and a related obstacle was that disclosing the nature of the invention to the public is difficult in the case of a living organism. The proposal focussed on the currently available industrial applications of biotechnology, and the hindrances to patentability.

However, the proposal became a focus for anti-technology sentiments, concern about farmers in developing countries, biodiversity and other issues undreamed of by the drafters. There was growing public fear that science would soon be able both to create life forms and to patent them. The first proposal for a Directive aroused such opposition that it failed to be adopted by the European Parliament, where it was the battleground between widely dispersed political factions. The present Directive too encountered fierce hostility from many MEPs and NGO’s during the adoption process. Opponents claimed it would lead to "patents on life": multinationals would be able to acquire patent rights over medicinal plants in developing countries (where patent law is often non-existent; however, patents do not cover discoveries, only inventions), human embryos would be developed under patent protection for use in research and it would be possible to patent parts of the human body. However, explanations by the Commission and industry that it would do nothing of the kind eventually won the day, and the Directive has now been implemented by most Member States.

The Netherlands, which is traditionally opposed to genetic manipulation and at present does not allow living biological material capable of reproduction to be patented, voted against the Directive’s adoption in the Council of Ministers, and at once filed a request for its annulment with the European Court of Justice ("ECJ"). The Dutch application was supported by Italy and Norway. The Court’s ruling, which was issued on October 9, 2001, predictably rejected the application. The ECJ confirmed that the protection provided by the Directive for biotechnological inventions follows the normal rules of patent law. The judgment also stresses the importance of moral considerations in this area. It points out that national authorities are granted some latitude for analysing and defining public order and morality when implementing the Directive, so as to "take account of the particular difficulties to which the use of certain patents may rise in the social and cultural context of each Member State, a context which the national legislative, administrative and court authorities are better placed to understand than the Community authorities"(2). Thus the way in which the Directive is implemented will certainly vary, depending on how, when and where the relevant ethical concepts are analysed. In Germany, for example, the provisions of the Genetic Engineering Act will most probably remain unchanged.(3)

The Netherlands’ main arguments for the annulment of the Directive were as follows.

1. Article 95 (ex 100a) EC Treaty was not the correct legal basis

The Netherlands and Italy claimed it had not been demonstrated that the Directive was needed to harmonise differences in national legislation on biotechnology patents which might otherwise hinder trade within the internal market. The Court pointed out that differences might equally arise from the inconsistent interpretation of international law such as the European Patent Convention. The Netherlands also argued that the Directive created a new type of property right which differed from the typical rights covered by patent law by extending protection to products and procedures previously excluded from patentability in certain Member States, and introduced new exceptional rules regarding rights to biological materials obtained from the multiplication or reproduction of patented biological materials such as seeds (i.e. the "farmer’s privilege" in Articles 8 and 9 of the Directive). The Court, however, held that the purpose or effect of the Directive was not to create a new intellectual property right, but to approximate or harmonise national laws. The Court upheld the Advocate General’s view that the protection of biotechnological processes and materials did not signify the granting of "patents on life", since (i) it did not grant ownership rights or unlimited exploitation rights, but merely enabled the holder of the patent to prevent others from using the invention without his authorisation, and (ii) the use, exploitation and commercialisation of the invention by the patent-holder were in any case limited to the conditions and restrictions provided in specific legislation on health, safety, animal welfare, etc, as well as ethical standards.

The Netherlands argued that legislation at Community level went beyond what was needed to accomplish the objectives of the EC Treaty on the sue. (Precisely the lack of Community legislation was cited as an obstacle to reform when a measure was first proposed). It would have been sufficient to harmonise national laws by amending the European Patent Convention. The Court, however, held that in view of the scale and effects of the harmonisation action required, it would be not only inappropriate and ineffective, but clearly impossible, to prevent or eliminate differences between the legislation, practice and judicial interpretation of the Member States in the field of biotechnological inventions merely by amending the Convention.

The Applicants claimed the Directive actually provoked legal uncertainty by granting the national authorities discretion to apply ambiguous terms such as "public order" and "morality". (Indeed, several Member States believed there was a need for greater precision, but thought this precision should be reached through a political rather than a legal process.) The Netherlands claimed the Directive’s specific rules on plant and animal varieties were confusing and did not make it clear whether they were excluded from patentability in all circumstances.

The Court agreed that the Directive gave national authorities some scope of manoeuvre regarding the analysis and definition of public order and morality, since it was necessary to "take account of the particular difficulties to which the use of certain patents may give rise in the social and cultural context of each Member State, a context which the national legislative, administrative and court authorities are better placed to understand than the Community authorities."(4) However, this would not result in legal uncertainty, since the Directive (i) clearly provided that the mere legal prohibition of commercial exploitation was not to be deemed contrary to morality or public order, and (ii) specified that certain processes or uses could in no case be patentable, including cloning of human beings and modification of germ line genetic identity. The Court also ruled that no inconsistency existed in the specific rules applicable to the patentability of plant and animal varieties.

The Netherlands claimed the Directive was contrary to the international obligations of the EU and the Member States, since its provisions violated the following international instruments:

• The TRIPs Agreement, which allows Members not to grant patents for plants and animals, whereas the Directive prevents the Member States from freely exercising this possibility. The Court replied that the Directive was perfectly compatible with the TRIPs, as it grants Member States a choice regarding the patentability of plants and animals and, indeed, enables them to adopt a joint position on this issue.
• The Agreement on Technical Barriers to Trade ("TBT"), since the Directive provides various definitions under the scope of the TBT that must be notified to the secretariat of the WTO. However, the Court pointed out that the Directive does not contain technical regulations within the meaning of the TBT.

The Convention on Biological Diversity ("CBD"), as patenting biotechnological inventions was allegedly contrary to the CBD’s principles of equitable sharing of genetic resources. The Court, however, rejected the assumption that the mere patent protection of biotechnological inventions would deprive developing countries of their right to use their traditional knowledge of their biological resources. Moreover, the CBD contained no provision making the granting of patents on biotechnological invention subject to prior assessment of the interests of the country where the genetic resource originates.

This was the core of the Dutch case. The Netherlands argued that by permitting the grant of patents for isolated parts of the human body, the Directive undermined the inalienable nature of living human matter, which is a component of the fundamental right to human dignity and integrity. This was essentially the basis for hostility to the Directive throughout its legal history, since its opponents claim that:

• Patentability of isolated parts of the human body diminishes living human matter and thereby injures human dignity; and
• The absence of obligations to verify the consent of the individual donor or beneficiary of biotechnological products damages the right to self-determination.

The Court first stressed that neither the elements of the human body themselves, nor discoveries relating to them, can be the subject of patentability under the Directive. In line with a distinction which is well known in patent law, only inventions which combine a natural element with a technical process making it possible to isolate that element or reproduce it with a view to an industrial application may be patented. Thus, an application for a patent for a sequence or partial sequence of human genes is only acceptable if the application is accompanied by both a description of the original method of sequencing which led to the invention and an explanation of the industrial application to which the work is to lead. Further, the protection conferred by a patent extends to biological data existing in their natural state only where necessary for the achievement and exploitation of a particular industrial application. The Court emphasised the additional security offered by Article 6 of the Directive, which expressly provides that the cloning of humans, the use of human embryos for industrial purposes and modifying the germ line of genetic identity are contrary to public order and morality, and therefore non-patentable, and specifies that these are merely non-exhaustive examples of non-patentability. The scope of the Directive covers matters related to the patent process for biotechnological inventions, but not research into or use of such inventions, which will be addressed by special legislation and the related ethical rules(5).

 Footnotes:

The new Federal Law on Medicinal Products and Medical Devices (or "Law on Therapeutic Products") takes effect on January 1, 2002. Switzerland will thus for the first time have uniform regulations for the whole country on the manufacture, marketing authorisation, distribution and supply of therapeutic products. The new system for control of therapeutic products introduces formal and substantive changes, the main formal change being the shift of authority and responsibility from cantonal to federal level. The substantive changes mainly involve amendments to bring Swiss law closer to EU law. All in all, there is now one set of regulations based on the provisions of the IOCM and the Federal Office of Public Health, which are adapted in the Law on Therapeutic Products to bring them into line with the new allocation of responsibility and authority and with EU Law, expand them and place them in a mutual context. Thus the new Law forms the basis for comprehensive, uniform, and up to date control of therapeutic products.

Peter Bratschi and Ursula Eggenberger have drafted a commentary to facilitate the approach of members of the pharmaceutical industry to the new regulations. This commentary represents an initial and very general introduction to the Law as it will apply from now on. In keeping with its character as an introduction, it does not touch on every aspect of the Law. Its first general section sets out the initial situation, the general thrust of the Law, and the main innovations, followed by notes on the relationship with the EU. The second more specific section presents the individual sections of the Law, starting with the regulations in force from January 1, 2002 and devoting particular attention to changes from the previous legal situation. In addition, the main legal and pharmaceutical expressions are explained, particularly the basic ones and those connected with the Law. Points of discussion and the background aspects of some particularly controversial provisions are also presented.

This commentary, together with the text of the Law, is appearing simultaneously in German and English to respond to the international nature of the Swiss medicinal products industry and the numerous subsidiaries set up in Switzerland by international companies. The English version of the text of the Law corresponds to the version used by the Federal Office of Public Health.

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