| Elisabethann Wright and Susan Jane Clements at Hogan & Hartson outline the intricate debate surrounding the EC Regulation on Penalties
After much debate about its contents, purpose and legal basis, the European Commission Regulation on Penalties was finally adopted on 14th June 2007 and entered into force on 5th July 2007 (1). As a result, the European Commission (EC) can now impose fines on companies whose medicinal products have been authorised in accordance with the centralised authorisation procedure laid down in Regulation 726/2004 (2) for breaches of specified obligations.
EXPOSURE TO FINES
Article 84(1) of Regulation 726/2004 provides that each EU Member State shall determine the penalties to be applied to an infringement of its provisions. Such penalties must be effective, proportionate and dissuasive. In addition, however, Article 84(3) of Regulation 726/2004 provides that, at the request of the EMEA, the EC may also impose financial penalties on the holders of marketing authorisations granted under the centralised procedure if they fail to observe certain obligations laid down in connection with such authorisations.
The combined application of these two provisions could render companies doubly exposed to fines, facing infringement proceedings and penalties imposed by EU Member States and by the EC for the same infringement. This would, arguably, breach the right not to be tried or punished twice.
The Penalties Regulation, which was the result of the application of Article 84(3) of Regulation 726/2004, addresses this concern only to a limited extent. It limits the general circumstances in which the EC can impose fines on marketing authorisation holders to specified circumstances. These circumstances relate to cases in which an infringement may have significant public health implications.
When initiating and conducting the infringement procedure and when quantifying any financial penalties, it is appropriate that the EMEA and the EC take account of any procedure by an EU Member State against the same marketing authorisation holder and based on the same legal grounds and facts (5). Article 2 of the Regulation clarifies this requirement to relate to an infringement procedure commenced at an EU Member State level that is based on the same legal grounds and the same facts. |
