UK: Lifesciences Snapshot: Winter 2009

ANTI-CORRUPTION & REGULATORY

A guide to the evolving laws on bribery and corruption in England and Wales

The existing laws on bribery and corruption are complicated as a result of their piecemeal development over more than 100 years. This has led to calls for reform, and there is legislation currently making its way through Parliament, intended to replace the existing laws.

We have launched an Anti-Corruption Zone on our website to help you keep on top of developments and update you as the bill progresses through Parliament. In the meantime, we have produced a guide comparing the existing law and the changes proposed by the Bribery Bill, which we hope you will find useful.

To view an electronic copy of our guide, please click here.
(http://www.cms-cmck.com/A-guide-to-existing-bribery-and-corruption-offences-in-England-and-Wales-11-12-2009)

To view our Anti-Corruption Zone please click on the following link: www.law-now.comhttp://www.law-now.com/anticorruptionzone
(www.law-now.com/anticorruptionzone/)

Process used by health authorities for determining cost-effectiveness of drug reviewed

In a recent case, the Administrative Court considered an application by a pharmaceutical company for judicial review of an NHS decision stating that use of its product by the NHS was not cost-effective, made on the grounds that this decision was not notified to the European Commission and was unfairly made. The court held that the process used by the NHS for determining the cost-effectiveness of this drug was fair and compatible with EU law.

The defendant's case was based on the assertion that the Transparency Directive only requires the NHS to notify the European Commission is a product is prescribed by NHS doctors or given a negative recommendation. As the product in question did not fulfil either criterion, there was no breach on the part of the health authorities to notify the Commission.

The court upheld this view and also held that since the basis for calculations carried out by an NHS evidence review group in respect of cost-efficiency was known to the claimant, fairness did not require disclosure of the basis on which these calculations were saved by the NHS.

For the full text of the decision in this case, please click here.
(www.bailii.org/ew/cases/EWHC/Admin/2009/2722.html)

COMMERCIAL

All reasonable endeavours assessed

In a recent decision, the High Court provided useful insight into the types of obligations an "all reasonable endeavours" clause will impose on a distributor, and a practical guide to the steps a distributor is likely to be required to take to fulfil the requirements of such a clause. Such steps include the preparation of marketing and promotional plans, cooperation and engagement with the supplier, and the maintenance of an adequately structured and directed sales and marketing organisation.

Whilst in this case no single failing by the distributor was held to be sufficient to constitute a breach of the clause, the Court held that a number of minor failings, when viewed together, were sufficient to be considered a breach.

For our full Law-Now on this case, please click here.
(www.law-now.com/law-now/2009/allreasonableendeavoursoct09.htm)

Contract termination: Hasta la vista...Maybe

Two recent TCC cases provide the answers to two important questions relating to the termination of contracts:

  • If a contractor wrongly suspends its works, does that conduct amount to a repudiatory breach of contract (which entitles the employer to terminate)?
  • When (if ever) will the courts grant an injunction to restrain the (wrongful) termination of a contract?

In Mayhaven v Bothma, the contractor suspended its works because it genuinely believed it had not been paid what was due to it (although it later turned out that this conviction was mistaken). However, the court held that this was not a repudiation of the contract as the contractor had not abandoned the project, but rather had intended to complete the works and would have ended the suspension if it had been authoritatively pointed out that it had been fully paid.

In Ericsson AB v ADS Defence and Security Systems Ltd the court refused to grant an injunction to restrain the termination of an IT contract. This will generally be the case, with an injunction only being granted where damages will not provide an adequate remedy to the person seeking the injunction (should an injunction not be granted).

For our full Law-Now on these cases, please click here.
(www.law-now.com/law-now/2009/contracttermination161109.htm)

COMPETITION

Publication of new regulations for public and utilities procurement remedies

The Public Contracts (Amendment) Regulations 2009 ("Amendment Regulations") have been published and will come into force on 20 December 2009. They implement Directive 2007/66/EC on improving the effectiveness of appeal procedures concerning the award of public contracts ("New Remedies Directive"), in England, Wales and Northern Ireland.

The New Remedies Directive applies also to utilities contracts. A separate set of utilities contracts amendment regulations has also been adopted.

An explanatory memorandum has been published for each set of regulations.

For our full Law-Now on the public sector regulations, please click here.
(www.law-now.com/law-now/2009/newpublicprocrules+publishednov09.htm)

For our full Law-Now on the utilities regulation, please click here.
(www.law-now.com/law-now/2009/utilitiesprocurementdec09.htm)

ECJ ruling: GSK v. European Commission

A recent ruling of the ECJ, relating to the issue of whether pharmaceutical companies can use dual pricing systems in order to limit parallel trading in their products in the EU, supports the view expressed by the Court of First Instance in 2006 and shows that such systems cannot automatically be deemed incompatible with EC Competition rules and should be appraised on a case-by-case basis.

This is a significant departure from the view previously held by the Commission and national courts that dual pricing systems are per se impermissible in light of EC competition law.
In practice, this means that the European Commission and competent national authorities will be obliged to take into account evidence as to the negative effect on pharma companies of parallel trade, including the effect on Research and Development, when assessing whether a violation of competition rules has taken place.

For the full text of the decision in this case, please click here.
(www.law-now.com/gsk)

CORPORATE

Companies Act 2006: changes on 1 October 2009

On 1 October 2009 virtually all sections of the Companies Act 2006 that had not yet been implemented came into force. The main areas of change related to formation of companies, the memorandum and articles, share capital, and directors' home addresses.

Key changes include:

The objects of companies formed on or after 1 October 2009 (New Companies) are unrestricted unless restrictions are specifically inserted into the articles;

  • There are three new sets of Model Articles: for a public company limited by shares; a private company limited by shares; and a private company limited by guarantee.
  • Existing companies should consider removing the limit on allotting shares derived from their pre-October authorised share capital.
  • An Existing Company that is private and with only one class of shares can give the directors unlimited power to allot new shares.

For our full Law-Now on these key changes, please click here.
(www.law-now.com/law-now/2009/compchanges06.htm)

DATA PROTECTION

£500,000 penalty imposed for serious breaches of DPA 1998

The Ministry of Justice recently announced that it plans to give the Information Commissioner the power to impose penalties of up to £500,000 on data controllers who seriously breach the Data Protection Act 1998. A Consultation is now underway until 21 December 2009 and the Government will report its findings on 11 January 2010.

The new penalty would allow the Information Commissioner to directly punish serious offenders of data protection law.

Although not a criminal sanction, the power to impose a "fine" of up to £500,000 should deter businesses from breaching the data protection principles and encourage compliance with the Data Protection Act.

Couples with the Government's proposal to introduce prison sentences (up to a maximum of 2 years) for offences of unlawfully obtaining personal data, this new proposal clearly shows that the Government is now taking the area of data protection very seriously!

To link to the law-now article, please click here.
(www.law-now.com/law-now/2009/dpanov09.htm)

INTELLECTUAL PROPERTY

Patents

E I du Pont Nemours & Co v United Kingdom Intellectual Property Office (Court of Appeal) 17 September 2009

The Court of Appeal allowed an appeal against a High Court decision refusing Du Pont a paediatric extension to a supplementary protection certificate (SPC) because not all the supporting documents required by the Regulation on the testing of medicines for paediatric use had been provided.

Jacob LJ upheld the strict interpretation of the requirements of the Paediatric Regulation given by the deputy High Court judge, but held that the absence of these documents was an irregularity which could be rectified under Article 10 of the SPC Regulation. By the time of the appeal hearing Du Pont was in a position to provide the necessary documents, and the Intellectual Property Office was required to grant an extension of the SPC.

For the full text of the decision, click here.
(www.bailii.org/ew/cases/EWCA/Civ/2009/966.html)

Generics v Synaptech (Court of Appeal) 16 October 2009

The Court of Appeal has referred questions to the ECJ to determine the meaning of "the first authorisation to place the product on the market" in the European Supplementary Protection Certificate Regulation (1768/92/EEC). The Court of Appeal required guidance as to whether an SPC could be granted only on the basis of the first authorisation compliant with the European medicines directive (Directive 65/65/EEC) or whether any authorisation that enabled the product to be placed on the market in the Community or EEA would be sufficient.

For the full text of the decision, click here.
(www.bailii.org/ew/cases/EWCA/Civ/2009/1119.html)

Events:

Lifesciences Forum - A Year in Review
(www.cms-cmck.com/services/pages/default.aspx)

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 09/12/2009.

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