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REGULATORY COMPLIANCE DEFENCE IN EUROPE Mark Mildred Nottingham Trent University
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THE EXISTING LAW PL Directive: article 7(d) defence that “The defect due to compliance of the product with mandatory regulations issued by the public authorities” CPA s 4(1)(a): “that the defect is attributable to compliance with any requirement imposed by or under an enactment or with any Community obligation”
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CASES No reported cases (?) Gammagard 1994 Immunoglobulin used in primary immuno- deficiency Contaminated with hepatitis C virus Said to be as a result of manufacturing process mandated by FDA
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THIRD REPORT ON PL DIRECTIVE COM(2006) 496 final, 14 September 2006 “Some stakeholders, and in particular representatives of the pharmaceutical industry, have argued strongly for the introduction of a defence of regulatory compliance, which would apply to a product whose safety was closely regulated, provided that the product complied fully with the applicable regulations” (page 11).
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REASONS FOR A RC DEFENCE Certainty for all Avoiding: failed claims And irrecoverable transaction costs (both sides) And payment of damages And waste of management time And suppression of innovation Promoting: lower premia so lower prices And research for new products Licensing Authority (“LA”) best judge of entitled expectation
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PRACTICAL REASONS AGAINST RC DEFENCE Few successful claims Discipline of risk-based claimants’ funding Adequate, stable and affordable insurance cover available No evidence that innovation is suppressed
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PRINCIPLED REASONS AGAINST RC DEFENCE Potential errors of LA Inadequate disclosure to LA Premature disclosure to LA Continuing disclosure to LA (PMS) Making those decisions justiciable ? Leads to slower, more conservative licensing process with social costs
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PRINCIPLED REASONS AGAINST RC DEFENCE Satellite litigation over disclosure process Or raised in main claim where LA has no locus What would be ambit of defence? Which products/industries are “closely regulated”? Necessity (and difficulty) of amending PLD Undermining fair apportionment of risk
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A PLACE FOR PRE-EMPTION? Would EMEA mandate product information for all member states? Cumbersome and ?inappropriate Amend art 7(a) to provide defence where product marketed with mandated info? In US pre-emption limited to failure to warn Difficulty over categorisation of defect and ? cause of action
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