Classification of medical foods

Background

Nutricia Limited (part of the Danone group) sought a judicial review of the decision by the Department of Health (the Department) that the company's yoghurt style food product - Souvenaid - did not fall within the definition of "food for special medical purposes" (FSMP) as set out in the EU Directive 1999/21/EC (the FSMP Directive). The FSMP Directive is transposed into English law by the Medical Food (England) Regulations 2000 (the Implementing Regulations).

Souvenaid is formulated and marketed by Nutricia as a medical food that addresses the apparent special nutrient requirements for those diagnosed with early Alzheimer's disease - in other words as a FSMP. One of the reasons Nutricia considers it important for Souvenaid to be seen as a FSMP is for the purposes of enabling it to be being listed in the NHS "Drug Tariff" (which would mean that it would be approved for reimbursement at the public expense when prescribed by a NHS practitioner).

While there is no need to obtain prior authorisation to market a FSMP, there is a requirement to notify the Department (in its role as the competent authority under the FSMP Directive) when first marketing the product. Nutricia notified the Department of Souvenaid accordingly.

There is no specific statutory role conferred on the Department to review and determine whether or not any product notified to it falls within the classification of FSMP. However, the FSMP Directive includes a duty on Member States to enforce the rules, and the court confirmed that this duty includes a duty to ensure that food products are properly classified. It is in this context that the Department adopted its view that Souvenaid is not a FSMP (and noted that it may be either a food supplement and/or a fortified food and should therefore be marketed as such).

The judgment

In considering the case, the judge (Green J) distilled Nutricia's arguments into four key grounds of challenge, namely that the Department -

1. Acted outside of its powers (ultra vires) in adopting its decision, as the Implementing Regulations did not confer a power on it to make decisions on the classification of products.
2. Acted perversely and irrationally in accepting the advice from its appointed expert nutritionists, as they lacked the basic clinical competence required to assess Souvenaid against the test set out in the FSMP Directive.
3. Made an error of law by applying a narrow definition of FSMP and/or acted perversely and irrationally in not accepting and/or giving adequate weight to the pre-clinical and clinical evidence submitted by Nutricia.
4. Effectively made a decision that amounted to a restriction on the free movement of the product contrary to the provisions of Article 34 in Part 3 of the Treaty on the Functioning of the European Union (TFEU).

In giving his judgment, Green J concluded that -

1. The Department had acted within its powers in adopting the decision under challenge. In reaching this conclusion the judge considered and applied the Marleasing principle (Case 106/89 Marleasing SA v La Commercial Internacional de Alimentacion SA). He also noted that while the Implementing Regulations may not necessarily be perfect in their implementation of the Directive, their rules had to be read in conjunction with the provisions of the Directive.
2. The Department had not acted unlawfully in relying upon and taking into account the advice of its experts. This conclusion followed the court's consideration of the relevance of qualifications to the exercise conducted under the FSMP Directive, the reasons given for the decision, the inherent expertise of the Department in making decisions on the basis of experts' reports and the margin of appreciation to be given to the Department in making its decision.
3. Subject to the assumption that the legal test applied by the Department was the correct legal test, the Department had not acted unlawfully in rejecting the evidence submitted by Nutricia. With regard to the question as to whether the legal test applied was in fact the correct one, Green J decided that it was necessary to refer a number of questions on this issue to the Court of Justice for a preliminary ruling.
4. The decision did not amount to a breach of Article 34 of TFEU. It is worth noting here that Nutricia's submissions on this point changed as the case proceeded and Green J rejected the new claim as formulated at the hearing.

Comment

The reference to the Court of Justice was not opposed by either party and should be broadly welcomed by food businesses as it may provide some clarity in the interpretation of the test that needs to be satisfied in order for a food product to be a FSMP. It will be particularly helpful in this case given that some Member States have accepted Souvenaid as a FSMP but not necessarily for the same reasons and not necessarily with the same claim.

There is however a risk with regard to timings. The current EU framework for FSMP products is changing and is being replaced by a new EU Regulation (No. 609/2013), applicable from 20 July 2016.

Among other things, one of the changes is that the European Commission will have the power to decide whether a particular food product constitutes a FSMP. It is likely that the Court of Justice will not be in a position to give its preliminary ruling prior to the new provisions taking effect and the question could in the meantime be referred (by any Member State) to the European Commission for a substantive decision.

Finally, it is relevant to note that the Department does not have an enforcement role under the Implementing Regulations - that role is conferred on food authorities (namely most local authorities). The judgement notes (as acknowledged by the Department) that this means the decision has a limited effect and does not directly impact upon the legal rights and obligations of Nutricia.

The view of the Department (if indeed admissible as evidence) could be no more than a matter which an enforcement authority can take into account when deciding whether to bring enforcement proceedings. Therefore neither the Department's decision nor the High Court's ruling prevents Nutricia from continuing to market the product as a FSMP for the time being.