This article originally appeared in Issue 5 (May 2020).
In the interesting case of Bayer Plc v NHS Darlington Clinical Commissioning Group  EWCA Civ 449 in the Court of Appeal, two pharmaceutical companies, Bayer Plc (“Bayer”) and Novartis Pharmaceuticals UK Ltd (“Novartis”), appealed against the dismissal by Whipple J of their judicial review challenge to a policy adopted by a number of Clinical Commissioning Groups (“CCGs”) in North Cumbria and the North East. Under this policy the CCGs, in effect, recommended to NHS Trusts that the preferred treatment option for an eye disease, generally referred to as wet age-related macular degeneration (“WAMD”), was a drug that happened not to be marketed by either Bayer or Novartis.
WAMD is generally treated by the injection into the eye of so-called ‘anti-VEGF agents’, which inhibit the over-production of the protein which causes WAMD. There are three anti-VEGF agents that are equally effective and safe in treating WAMD. Two of them, Lucentis and Eylea, were marketed in Europe by Novartis and Bayer respectively and had been licensed specifically for ophthalmic use. The third, Avastin, produced by a different pharmaceutical company, was licensed for the treatment of certain cancers but had never been licensed for ophthalmic use. Moreover, unlike Lucentis and Eylea, a dose of Avastin had to be divided into smaller doses in a process known as ‘compounding’ before it was suitable for ophthalmic use.
Nevertheless, the CCGs adopted a policy in which Avastin, rather than Lucentis or Eylea, would be offered to patients with WAMD as the preferred treatment option. This was solely on cost grounds, as it was enormously more expensive to use Lucentis or Eylea as compared to Avastin. Per injection, Lucentis cost about £550 and Eylea cost about £800, whereas Avastin cost only about £28.
Because the pharmaceutical company that produced Avastin did not hold a marketing authorisation for ophthalmic use, Bayer and Novartis judicially reviewed the legality of the CCGs’ policy. They claimed that the implementation of the CCGs’ policy would lead to breaches by NHS Trusts of the EU and domestic legislation regulating the marketing and manufacture of medicines. It was accordingly necessary for the Court of Appeal, like Whipple J before them, to consider EU legislation and caselaw in some detail.
In giving the main judgment in the Court of Appeal, Underhill LJ noted that the CJEU caselaw did permit Member States to adopt measures which were aimed at saving costs, in order to ensure the financial stability of their domestic healthcare system.
Further, although Article 6 of the Medicines Directive (Directive 2001/83/EC) stated in terms that no medicinal product could be placed on the market of a Member State unless a marketing authorisation had been issued, there had already been caselaw that considered whether the use of unlicensed Avastin fell foul of that provision. That was because health providers in other countries in Europe were just as anxious as the CCGs to take advantage of the lower cost of Avastin as a treatment for WAMD.
The key decision of the CJEU was Novartis Pharma GmbH v Apozyt GmbH, C-535/11, ECLI:EU:C:2013:226 (“Apozyt”). The principal effect of the decision in Apozyt was that the supply of Avastin by a compounder to a clinician did not constitute a ‘placing on the market’ within the meaning of Article 6 of the Medicines Directive, and so did not require a marketing authorisation, but only if the compounding process did not result in a modification of the medicinal product and was carried out solely on the basis of individual prescriptions.
The appellants, Bayer and Novartis, argued that Avastin in its compounded form should be treated as modified, because of the risk of contamination or other changes to its substance as a consequence of poor quality control during compounding. Underhill LJ had no hesitation in rejecting this argument, because on analysis of the decision in Apozyt, what mattered was whether there was a change to the physical, chemical or biological properties of Avastin that was necessarily inherent in the fact of compounding, and there was no evidence that the compounding process involved any such change.
The Appellants also claimed that the systematic use of Avastin undermined or evaded the legislative scheme because it eroded the primacy given by the Medicines Directive to the promotion of patient safety. They emphasised the importance of maintaining control over the distribution chain and avoiding the risk of contamination and other quality failures during the compounding process. Again, Underhill LJ had no hesitation in rejecting this argument. As he put it, following the CJEU’s decision in Apozyt, “that boat has sailed” . The unspoken premise of the Appellants’ complaint was that the requirements of the Medicines Directive, particularly Article 6, were intended to apply to the compounding of Avastin, but the CJEU had held just the opposite in Apozyt. There was accordingly no question of the preparation and supply of Avastin in its compounded form undermining or evading the legislative scheme.
The Court of Appeal’s decision in this case is worth reading in full because there are many other interesting aspects of the decision, including a discussion of whether guidance issued by the GMC prohibited clinicians from taking account of cost when considering whether to prescribe an unlicensed medicine. The default position in the GMC’s guidance was that doctors should ‘usually’ prescribe licensed medicines in accordance with the terms of their licence, which would have precluded the prescription of Avastin for the treatment of WAMD because Avastin was not licensed for ophthalmic use. Certain exceptions to that default position were spelt out in the guidance but none of them referred to cost as a possible justification for prescribing an unlicensed medicine.
Whipple J held that the guidance was not exhaustive and that there could be other exceptions to the usual position not expressly referred to in the guidance, and moreover she decided that the present case was far outside the category of ‘usual’ cases envisaged by the guidance in any event, given the extensive material that showed that unlicensed Avastin was of equivalent clinical effectiveness and safety for the treatment of WAMD as the licenced alternatives. Accordingly, she decided that the GMC’s guidance did not prohibit the prescription of Avastin for the treatment of WAMD on the grounds of cost, and the Court of Appeal upheld her reasoning.
The Court of Appeal’s decision is of particular interest in the current climate, where efforts are ongoing to find drugs that may treat or even cure Covid-19. Cases may arise where relatively cheap drugs developed for wholly different purposes are shown on an experimental basis to have some effect against the virus, but their unlicensed use against the virus may conflict with the financial interests of pharmaceutical companies developing their own drugs to treat the virus which they may seek to supply to desperate public health authorities at relatively great cost. The decisions of Whipple J and the Court of Appeal indicate that the courts will not kowtow to the commercial needs of ‘Big Pharma’ and will uphold the right of public health authorities to make prescription decisions aimed at protecting the public purse, wherever legally permissible to do so.