Blackbay Ventures Ltd v Secretary of State for Health the Medicines and Healthcare Products Regulatory Agency

A holder of a wholesale dealer’s licence must comply with the wholesale-distribution requirements whenever it acts as a licence holder. This applies even where the business also operates pharmacies and the purchase is intended to support retail supply.

The limited pharmacy exemption in section 10(7) of the Medicines Act 1968 does not permit a licensed wholesaler to obtain medicines from pharmacies without wholesale dealer’s licences. The provision must be read in conformity with Article 80(b) of Directive 2001/83/EC and regulation 9 of the 2005 Regulations. The court may read words into domestic legislation where necessary to achieve that result and where doing so does not go against the grain of the legislation.

Blackbay Ventures Limited held a wholesale dealer’s licence and operated a network of pharmacies. The Medicines and Healthcare products Regulatory Agency suspended the licence under the Medicines Act 1968 after finding that the claimant had obtained medicinal products from pharmacies without wholesale dealer’s licences, contrary to regulation 9(1) of the Medicines for Human Use (Manufacturing, Wholesale Dealing and Miscellaneous Amendments) Regulations 2005.

The claimant appealed under section 107 of the Act. It argued that its pharmacy activities fell within section 10(7), or alternatively that purchases should be permitted where good distribution practice was maintained. The central issue was whether a business holding a wholesale dealer’s licence could rely on the pharmacy exemption when obtaining medicines from unlicensed pharmacies.

1. Appeal dismissed. The claimant’s purchase of medicines from pharmacies without wholesale dealer’s licences breached regulation 9(1) of the Medicines for Human Use (Manufacturing, Wholesale Dealing and Miscellaneous Amendments) Regulations 2005.
2. Section 10(7) of the Medicines Act 1968 concerns acts which remain “wholesale dealing” under section 8(7). It gives a limited authorisation for specified acts and does not change their legal character. Article 80(b) of Directive 2001/83/EC and regulation 9 apply to every holder of a wholesale dealer’s licence, regardless of the capacity in which the holder claims to act.
3. Article 80(c) must be read with Article 77(2), so that pharmacists who also hold wholesale authorisations may continue supplying medicines to the public. Article 80(b) requires no equivalent qualification. The decision in Caronna supported the conclusion that pharmacists authorised to act as wholesalers must satisfy the wholesale-distribution requirements.
4. There was a tension between section 10(7) and Article 80(b) and regulation 9. Applying the conforming-interpretation approach in Marleasing SA v La Comercial International de Alimentation SA and Ghaidan v Godin-Mendoza, section 10(7) was read as excluding acts prohibited by regulation 9. That reading preserved the exemption’s principal purpose of allowing small stock exchanges to meet unplanned shortages.
5. Compliance with good distribution practice could not replace the licensing requirement. The regulatory regime enabled inspection and monitoring of wholesale premises, whereas reliance on assurances from unlicensed pharmacies would undermine control of the whole distribution chain and the protection of public health. The preamble to the Directive could not justify an interpretation contrary to the clear wording of Article 80(b).
6. The alleged restriction on the free movement of goods did not alter the conclusion. Any such restriction would in any event be capable of justification on grounds of public health, applying the reasoning in R (Alliance for Natural Health) v Secretary of State for Health.

This was an appeal to the High Court under section 107 of the Medicines Act 1968 against the licensing authority’s decision of 18 April 2012 to suspend the claimant’s wholesale dealer’s licence. The suspension was stayed by consent pending determination of the appeal. The High Court dismissed the appeal.