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State liability, Pharmaceuticals and Marketing Authorization: Case C-452/06

By Bartolus

Here's an interesting judgment handed down the other day about the liability of a member State for failure to recongize the marketing authorization for a drug granted pursuant to Directive 2001/83 on the Community code relating to medicinal products for human use in another member State. In its judgment in Case C-452/06 Synthon BV the Court of Justice decides that such a failure by a member State does indeed constitute a sufficiently serious breach of of EC law capable of rendering that State liable in damages.

The judgment is interesting for other, more technical aspects of the law relating to pharmaceutical drugs but we won't concern ourselves with those here.

On the issue of state liability, the Court repeats its traditional caselaw (Joined Cases C-46/93 and C-48/93 Brasserie du Pêcheur and Factortame, paragraph 51; Case C-5/94 Hedley Lomas, paragraph 25; and Case C-278/05 Robins and Others, paragraph 69), according to which, for a member State to incur liability for damage caused to individuals by a breach of EC law it is necessary that:
? the rule of law infringed should be intended to confer rights on individuals;
? the breach should be sufficiently serious;
? there should be a direct causal link between the breach of the obligation incumbent on the State and the damage sustained by the injured parties.

It also recalls that it is in principle for the national courts to determine whether the conditions for State liability for breach of EC law are met. Nevertheless, the Court of Justice may indicate certain circumstances which the national courts may take into account in their evaluation (Case C-150/99 Stockholm Lindöpark, paragraph 38).

As to the condition requiring a sufficiently serious breach of EC law, the Court of Justice recalls that such a breach is established where it implies manifest and grave disregard by the member State for the limits set on its discretion, the factors to be taken into consideration in this connection being, inter alia, the degree of clarity and precision of the rule infringed and the measure of discretion left by that rule to the national authorities (Joined Cases C-46/93 and C-48/93 Brasserie du Pêcheur and Factortame, paragraphs 55 and 56, and Case C-278/05 Robins and Others, paragraph 70).

If the member State is not called upon to make any legislative choices and has only considerably reduced, or even no, discretion, the mere infringement of EC law may be sufficient to establish the existence of a sufficiently serious breach (Case C-5/94 Hedley Lomas, paragraph 28, and Case C-278/05 Robins and Others, paragraph 71). As a consequence, the member State?s discretion, which is broadly dependent on the degree of clarity and precision of the rule infringed, constitutes an important criterion to determine whether there has been a sufficiently serious breach of EC law (see, Case C-278/05 Robins and Others, paragraphs 72 and 73).

In the present case, the Court of Justice found that although determining whether a pharmaceutical product is essentially similar to another is a complex assessment, failure to accord mutual recognition to a marketing authorization already granted in another member State does indeed constitute a sufficiently serious breach of EC law to give rise to liability in damages. The Court of Justice recalled that Directive 2001/83 lays down clear and precise obligations on member States in the context of the recognition of a marketing authorisation already granted by another member State applying one of the procedures provided for that purpose in the directive.

For a previous post on Case C-278/05 Robins and Others, see here.

Full post as published by EU Law Blog on November 03, 2008 (boomark / email).