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Category: Drug Law

Money laundering and the re-scheduling of cannabis based medicinal products

Money laundering and the re-scheduling of cannabis based medicinal products

BCL Solicitors, David Hardstaff and Daniel Jackson, have raised an important issue in relation to the Proceeds of Crime Act 2002 (POCA), anti-money laundering (AML), and the re-scheduling of cannabis based medicinal products for human use (http://www.bcl.com/a-green-light-for-business/).  Others have also done so.
The problem arises in relation to the definition of “criminal conduct” in s.340(2) POCA, namely, conduct which “(a) constitutes an offence in any part of the United Kingdom, or (b) would constitute an offence in any part of the United Kingdom if it occurred there” [emphasis added].
A money laundering offence under ss.327-329 POCA is not committed if a person “(a) …knows, or believes on reasonable grounds, that the relevant criminal conduct occurred in a particular country or territory outside the United Kingdom, and (b) the relevant criminal conduct (i) was not, at the time it occurred, unlawful under the criminal law then applying in that country or territory, and (ii) is not of a description prescribed by an order made by the Secretary of State”.  However, the Proceeds of Crime Act 2002 (Money Laundering: Exceptions to Overseas Conduct Defence) Order 2006, provides limited protection.
It would be a harsh result if a person fell foul of the money laundering provisions when handling, in the UK, money obtained by a reputable pharmaceutical company from the manufacture overseas (and under licence there) of a drug which, in the UK, is a “controlled drug” (MDA 1971) and not licenced for production in the UK.  Can this result be avoided?  It may not be tenable to say that because the company had acted under licence overseas, the same “conduct”, “if it occurred [in the UK]” (i.e., licensed production), would therefore not constitute an offence.  This would be to treat the grant or absence of a licence as a circumstance of the “conduct”.  If this were held to be sufficient to escape liability, then the outcome would (arguably) be more generous than the limited exception granted by the 2006 Order.  In any event, as the writers point out, a “‘like for like’ comparison of the UK’s controlled drug licensing regime with that of another country is unlikely to be straightforward”.  Perhaps the most satisfactory answer is to amend the 2006 Order and provide a wider exception or range of exceptions.

See also my post re the regulations in respect of CBMPs [Link]

Prescribing Cannabis-based Medicinal Products: Moving Forward from the Landmark

Prescribing Cannabis-based Medicinal Products: Moving Forward from the Landmark

Today is undoubtedly a landmark moment but – as foreshadowed in earlier posts – the regime will be more restrictive than many persons in the media, and certain commentators, had claimed a few months ago.   The reason is that the medicines legislation (and not just the Misuse of Drugs Act 1971) was/is bound to set the ‘pace’ in relation to Cannabis-based medicinal products (CBMPs).

The relevant legislation is The Misuse of Drugs (Amendments) (Cannabis and Licence Fees) (E.W.&S) Regulations 2018 (SI 2018 No.1055), which came into force today.

A useful and comprehensive statement of the current position has been published by the MHRA [link] “The supply, manufacture, importation and distribution of unlicensed cannabis-based products for medicinal use in humans ‘specials’
A letter dated 31st Oct 2018 from the DHSC and NHS England is informative [link] but there are two statements within it that need to be treated with discretion:

Moving cannabis based products for medicinal use to schedule 2 will mean those [products] can be prescribed medicinally where there is an unmet clinical need” [p.1]
and that –
the Government has chosen to restrict the decision to prescribe cannabis-based products for medicinal use to only those clinicians listed on the Specialist Register of the General Medical Council. This restriction has been set out in regulations.” [p.2]

The latter statement is true if the CBMP is unlicensed: in which event, the product must be treated as a “special”.  However, IF a CBMP has a “marketing authorisation”, the MHRA state that this prescribing restriction “will no longer apply” [p.6]:

The Misuse of Drugs Regulations 2001, as amended by [SI 2018 No.1055], provide that the prescriber must be a Specialist doctor registered on the General Medical Council (GMC) Specialist Register to be able to issue prescriptions for unlicensed CBPMs.  Once a substance receives Marketing Authorisation this prescribing restriction will no longer apply, and the product is available for patient use as other Schedule 2 drugs. See Regulation 16A of the 2001 Regulations.

Regardless of whether the CBMP is unlicensed or has a “marketing authorisation”, professional and regulatory guidelines, and ethical considerations, will be relevant.  But, how long will it take for a CBMP to acquire a full “marketing authorisation”?

Note that a CBMP (as defined in the Regulations) can be “cannabis” or “cannabis resin” – but, it must be “produced for medicinal use in humans” (and meet the remaining parts of the definition).  The MHRA document makes clear that a CBMP that is unlicensed must meet the specifications of a Specialist Medical Practitioner.  A CBMP will only acquire a “marketing authorisation” if it satisfies the stringent requirements for doing so.  It remains to be seen which products are considered by the regulatory bodies to be eligible for prescribing.

A CBMP remains a “controlled drug” for the purposes of the MDA 1971.

Medicinal Cannabis – acting with “pace”.

Medicinal Cannabis – acting with “pace”.

Earlier posts by this commentator have cautioned against an expectation that “Cannabis-Derived Medicinal Products” (CDMP) would – in a matter of weeks or a few months – be made available on prescription by local GPs.  The latest correspondence from the Home Office to the Advisory Council on the Misuse of Drugs (21 September 2018) [Link] is a further indication that the caution was not misplaced.  The letter states that “the Government decided to act with pace and reschedule cannabis based products for medicinal use, within the current legal framework, as quickly as it could”.   It adds “we think it is critical that we do not hinder the use of cannabis-based products for medicinal use for the relief of pain and suffering where medically appropriate and there is evidence…..it is important to reiterate that we are still at an early stage. We will continue to review and evolve our approach in the light of experience” [emphasis added].  The Government awaits the receipt of the ACMD’s “full report on cannabis-derived medicinal products in July 2019”.

As previously stated, the provision of CDMPs is not simply a matter of moving such products (or ‘cannabis’) from Schedule 1 of the Misuse of Drugs Regulations 2001 to another schedule.  Any product (whether a controlled drug or not) that is presented as having medicinal properties or which has a medicinal function will attract the complex UK/EU medicines legislation.  It is therefore unsurprising that the Government’s latest response (21 Sept) states that CDMPs “like any other medicine….need to comply with the requirements of the Human Medicines Regulations 2012” (Response to ACMD Recommendation 1).  Even this is an over-simplification.  The recent decision of the High Court concerning the use of Avastin for wet Age-related Macular Degeneration shows how complex the medicines legislation can be: Bayer Plc and Novartis Pharmaceuticals UK Ltd v NHS Darlington CCG and Oths [2018] EWHC 2465 (Admin).  That decision may be the subject of an appeal, but whatever the final outcome, the case may have some relevance in the context of CDMPs were a CDMP to be supplied “off-label” or to fulfil a special need (‘specials’).  The Bayer case shows the extent to which – in relation to medicinal products – UK law and EU law form a package of measures.

On 21 September the Government also announced its “definition” of “Cannabis based products for medicinal use” [Link].  The “definition” is not as clearly identified on its webpage as being such, but it appears to be: “There are 3 broad requirements for products before they can be prescribed: • the product is or contains cannabis, cannabis resin, cannabinol or cannabinol derivatives; • the product must be produced for medicinal use in humans; • it must be a product that is regulated as a medicinal product or an ingredient of a medicinal product.”  The third condition is of particular interest because it is arguably clearer than the Government’s interim definition as it makes plain that the product is one that is “regulated” as a “medicinal product” (a term defined by the Human Medicines Regulations 2012).

 

ACMD Advice on Cannabis-derived medicinal products

ACMD Advice on Cannabis-derived medicinal products

On 11 September 2018, the ACMD published its Advice to the Home Secretary and to the Secretary of State for Health and Social Care [Link].  It is a constructive document that highlights a number of issues and problems that this commentator has raised for some time.  In some respects the document is nuanced.  Doubtless in the interests of readability and brevity it does not discuss a number of complexities concerning the legal definition of a “medicinal product”, the ‘marketing authorisation’ regimes, or the ‘specials regime’ (supply to fulfil special patient needs) in respect of medicinal products that do not have a UK or an EU marketing authorisation.

The ACMD advice demonstrates that a UK legislative regime for the provision of “Cannabis-derived medicinal products” (CDMPs) will not occur in a matter of days or weeks.  Any contrary expectation was perhaps fuelled by the statement (often made) that moving cannabis from schedule 1 to the Misuse of Drugs Regulations 2001 to Schedule 2 would enable doctors to prescribe “medicinal cannabis”.  This was an over simplification: it is only one step.

The ACMD document makes four telling statements:

1)  “CDMPs should meet defined safety and quality assurance standards to ensure that they do not put patients at risk of harm. As an interim measure, only products meeting these standards were recommended to be rescheduled to Schedule 2 of the Misuse of Drugs Regulations 2001.” [p.1]

2) ” Any definition of CDMPs should be underpinned by existing regulations [The Misuse of Drugs Regulations 2001, The Human Medicines Regulations 2012, and The Controlled Drugs (Supervision and Management and Use) Regulations 2013] and clinical guidance specific to CDMP prescribing.” [p.3]

3) ” …the responsibility for prescribing an unlicensed CDMP falls within the existing framework for the prescription of unlicensed medications. The ACMD agrees that unlicensed CDMPs should be considered as a product of last resort and used only when no other drug with MHRA marketing authorisation meets the clinical need.” [p.4]

4) “To expedite the transition from the use of ‘specials’ to the use of licensed medicinal products, the Government should encourage pharmaceutical companies developing CDMPs to apply for MHRA marketing authorisation.” [p.9]

Medical efficacy and product safety are key considerations in the regulated provision of a CDMP.  Given the existing UK/EU legal framework, a CDMP that has a UK “marketing authorisation” would (it is submitted) provide the most flexible ‘access route’ for its prescription.  But securing such authorisation is not a light touch.  The “specials” regime is largely set out in the Human Medicines Regulations 2012.  It is a restrictive regime because it applies to medicinal products that lack a UK or an EU “marketing authorisation”.  Current legal restrictions include: (a) that the medicinal product is supplied in response to an unsolicited order – in other words, the initiative to supply rests with the practitioner; and (b) that there is no “special need” if there exists an authorised approved equivalent drug (consider Case C-185/10 Commission v Poland [2012] ECR, para. 36).  The importation and distribution of “specials” would seem to require someone to have legal authorisation to do so.

There are also ethical issues for medical practitioners to consider when prescribing or administering any drug – especially one that has no “marketing authorisation”.

The Legal Status of “Poppers”

The Legal Status of “Poppers”

In R v Rochester [2018] EWCA Crim 1936, decided on 17th August 2018, the Court of Appeal (Criminal Division) concluded that the Psychoactive Substances Act 2016 does not require a “psychoactive substance” to be capable of producing its “psychoactive effect” by directly stimulating or depressing the central nervous system. Indirect effect is sufficient.  The substance in that case was nitrous oxide, commonly known as “laughing gas”.

The appellant’s contention was that the effect must be direct.  The argument was largely fuelled by events after the Act appeared on the statute book (28 January 2016) but before it came into force (26 May 2016).  Concern had been raised in Parliament that alkyl nitrites (“poppers”) – when used as a sexual aid – would be caught by the PSA.  The Home Office commissioned the Advisory Council on the Misuse of Drugs (AMCD) to provide an assessment of the harms and psychoactivity of alkyl nitrites when used in that way.

On 16 March 2016, the ACMD provided a report stating that poppers dilate blood vessels and relax muscles, including the bladder, digestive tract, vagina and anal sphincter. The Council remarked that “The brain receives a transient ‘rush’ or ‘high’ as an indirect effect caused by increased blood flow caused by the dilation of blood vessels in the brain and periphery.” [Link]  Importantly, the ACMD said:

“The [Council’s] consensus view is that a psychoactive substance has a direct action on the brain and that substances having peripheral effects, such as those caused by alkyl nitrites, do not directly stimulate or depress the central nervous system.”

It was therefore unnecessary to add alkyl nitrites to the list of exempted substances and products in schedule 1 to the Act.  By letter dated 22 March 2016, the Minister for Preventing Abuse, Exploitation and Crime wrote to the ACMD “…Having given due consideration, the Government agrees with your advice and interpretation of the definitionWe do so in the understanding that ‘poppers’ have these unique indirect effects.” [Emphasis added]  See, to similar effect, a letter from the Minister to Mike Freer MP [Link].

The issue raised on appeal was foreshadowed in an article written by this commentator in Criminal Law Review ([2018] Crim. L.R. 229, Issue 3).

The question now is: “where does this case leave the legal status of poppers when produced, supplied, imported or exported for recreational use?”  The answer may be that unless Parliament makes an exemption in the PSA, poppers may fall within the Act as a ‘psychoactive substance’”.

This commentator has previously warned that statements made in correspondence between the ACMD and the Minister do not have the force of law.  The Court of Appeal cannot be criticised for noting and placing reliance on the fact that the PSA does not expressly require a “psychoactive effect” to be direct.  The ACMD had also noted that the definition of a ‘psychoactive substance’ in the PSA “is not explicit with respect to direct or indirect effects on the central nervous system” (para.2.5).

As for the ACMD’s view on the meaning of a “psychoactive substance”, the Court remarked that this was “not an admissible aid to construction; neither is the minister’s acceptance of that view”.   Limits are placed on the use of out-of-court statements as an aid to statutory interpretation.  The Courts tend to analyse the language and structure of the statute under consideration.  In any event, despite the Minister’s reassuring statement, there was a time when the Government was minded to bring “poppers” within the terms of the PSA (see Hansard, House of Commons, 27th Oct 2015, e.g., col.38).

The Court said that the “precise boundaries between direct and indirect effect” had not been explored in the materials before it and “may not be free from difficulty”.  It added, “Were a distinction to be drawn between direct and indirect effects, we see considerable scope for expert disagreement about where those boundaries lie.”

The problem with the PSA is that it sets no clear boundaries and is laced with conceptual and forensic difficulties.