All about product liability in Ukrainian pharma. Prepared in association with Sayenko Kharenko, a leading law firm in Ukraine, this is an extract from The Pharma Legal Handbook: Ukraine, available to purchase here for USD 99.
1. What types of liability are recognized in your jurisdiction?
A breach of laws and regulations on medicines may result in disciplinary, administrative, civil and criminal liability. Liability claims in general are regulated by laws and not by court precedents.
2. How do these types of liabilities apply to the manufacturers of medicines and devices?
The Civil Сode of Ukraine envisages the general principle that the property damages inflicted by unlawful actions or omissions shall be recovered in full by the person who inflicted such damages. Civil liability comprises both claims for damages according to the Civil Сode and civil claims under other laws (e.g. consumer claims). For example, the Law of Ukraine “On Protection of Comsumers’ Rights” entitles consumers to request from the manufacturer or seller termination of the contract and return of the paid amount in cases of sufficient deficiencies or falsification of the purchased goods. Consumers are entitled to damages inflicted due to misleading, incomplete, untimely or incomprehensible information on the product. Damages inflicted due to unfair commercial practices are also subject to compensation. The general period of limitation for civil claims is 3 years, the special period of limitations for claims arising from product deficiencies is 1 year.
Ukrainian legislation envisages administrative liability for various types of administrative offences which are envisaged both by the Code of Administrative Offences of Ukraine and sectoral laws. Administrative offences may include breach of licensing or advertising requirements, marketing and sale of unsafe or non-compliant products, breach of legislation in the sphere of customs clearance, competition or consumer protection, breach of requirements on the sale of the products (violation of pricing requirements, sale of prescription medicine without prescription). Medical devices are also subject to product safety legislation. Violation of its provisions entails a range of administrative penalties (mostly in the form of fines), as well as administrative aftermaths in the form of corrective measures: obligation to bring the products in line with legislative requirements, limitation of sale of the product, withdrawal of the product from turnover or recall.
Criminal liability is applied for certain offences in the sphere of commercial activity, e.g. market placement of unsafe products in large volumes, falsification of medicinal products or their illegal traffic, illegal production, transportation or sale of dangerous medicinal products, violation of the rules of clinical trials and state registration of medicinal products, etc.
Disciplinary liability is applied for violations by an employee of obligations in the sphere of labour relations and labour discipline. The Code of Labour Laws defines two types of disciplinary liability: admonition and dismissal. Disciplinary liability is applied by the employer to the employee.
3. Does potential liability extend to the manufacturer only or could claims extend to corporate executives, employees, and representatives?
Ukrainian law envisages liability for both legal entities and individuals. Penalties envisaged by the Code of Administrative Offences and the Customs Code of Ukraine may be applied exclusively to individuals, whereas, penalties under the Criminal Code may be applied either exclusively to individuals, or to individuals and legal entities depending on the violation.
Penalties envisaged by sectoral laws (e.g. penalties for violation of the licensing, advertising, consumer protection or competition requirements, marketing and sale of unsafe products) are applied to the commercial entity, enterprise or individual entrepreneur. Each sectoral law may envisage its own procedure for bringing the guilty party to liability and the entity subject to such liability.
Therefore, manufacturers, corporate executives, employees and representatives involved in producing, selling, advertising and distributing of medicines and medical devices can be brought to liability depending on the circumstances of the case.
4. How can a liability claim be brought?
Civil claims (including consumer and third-party claims for damages) are considered by the court. Any person, in case of violation of his/her rights and interests, has the right to bring a claim to the court.
Investigations in criminal cases are initiated and carried out by law enforcement bodies which have the powers to exercise certain procedural actions in such investigations. Criminal cases are considered by the courts on a mandatory basis. Based on such considerations, the courts designate the criminal penalty or designate the accused person not guilty.
Administrative cases are considered either by the courts or by the governmental bodies within their competence, depending on the type of violation. Ukrainian legislation provides for different procedural rules of consideration of administrative cases by government authorities. As a rule, government authorities may initiate administrative proceedings based on the information about the violation which might be obtained upon the results of an inspection or at the request of the interested person (e.g. the consumer). Upon consideration of the case the governmental body may order the commercial entity to eliminate violation and bring its activity into line with the legislation, to take actions to prevent negative results of the violation, and to impose an administrative sanction on the commercial entity. Administrative sanctions in most cases take the form of a fine. In case the commercial entity does not agree with the decision of the governmental body, it has the right to challenge it before the court.
5. What defences are available?
Liability and potential defences are designated on a case-by-case basis. Manufacturers, importers, distributors and other authorized persons shall strictly comply with all the requirements provided in Ukrainian laws and regulations, including GMP standards. In case of violation of any legislatory requirements, the violators shall take due measures to eliminate such violations and to prevent any negative consequences.