Patel & Anor, R. v

For the offence under paragraph 1 of Schedule 3 to the Medicines for Human Use (Marketing Authorisations Etc.) Regulations 1994, a medicinal product is not placed on the market merely because title and control pass during a sale within the European Economic Area.

The provision must be construed consistently with Directive 2001/83/EC. It concerns products intended to enter, or in fact entering, a distribution system leading to sale to end users within the Community. A transaction intended to supply, and in fact supplying, a market outside the Community does not fall within paragraph 1. The wider terms of paragraph 2, including its express mental element, reinforce that limited construction.

The appellants pleaded guilty in the Crown Court at Kingston-upon-Thames to offences of placing sildenafil citrate tablets on the market without a Community or United Kingdom marketing authorisation, contrary to paragraph 1 of Schedule 3 to the Medicines for Human Use (Marketing Authorisations Etc.) Regulations 1994.

One appellant had bought purported Viagra tablets in Pakistan and sold them to a licensed wholesaler in England. Both parties intended that the goods would be exported to the Bahamas, and they were in fact delivered there. The other count arose from an unsuccessful proposed sale, when the tablets were seized before any contract was made.

The guilty pleas followed an earlier ruling that the agreed conduct amounted to placing the products on the market. The central issue on appeal was whether those transactions fell within paragraph 1 of Schedule 3.

1. Appeals allowed. Permission to appeal was granted and all convictions were set aside. The applicants had pleaded guilty on the basis of a ruling which was wrong in law.

2. Paragraph 1 of Schedule 3 to the Medicines for Human Use (Marketing Authorisations Etc.) Regulations 1994 had to be construed so that it did not prohibit conduct lying outside the relevant Community instruments. The Regulations implemented Directive 2001/83/EC, whose scope concerns industrially produced medicinal products intended to be placed on the market in Member States.

3. The court rejected the Crown's proposed control-based test. A transfer of legal title that removed the seller's control did not, without more, release the product into the United Kingdom or Community distribution chain. The Directive pursued public health protection while avoiding unnecessary hindrance to lawful pharmaceutical trade within the Community.

4. The five sales were intended to supply a market outside the European Economic Area and did so. They neither intended nor effected release of the products into a distribution system leading to sale to Community end users. They therefore did not disclose an offence under paragraph 1.

5. The Crown did not seek to sustain the second count. No contract of sale had been concluded on that occasion, and the convictions on that count also had to be set aside.

6. The court declined to give a comprehensive definition of placing a product on the market. It held, at least, that the relevant market is one in which consumers within the EEA can purchase the product. It also observed that paragraph 2 of Schedule 3 has a distinct and express mental element and is directed at business activity known, or reasonably believed, to have the ultimate purpose of unauthorised marketing. That observation was not necessary to decide the appeals.

• Court of Appeal (Criminal Division): allowed the appeals and set aside the convictions: [2009] EWCA Crim 2311.

• Crown Court at Kingston-upon-Thames: the applicants pleaded guilty following a prior ruling on the meaning of placing a medicinal product on the market. Fines were imposed, and a confiscation order was made against Hitendra Patel.