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Cite as: 2009 GWD 2-22, [2008] CSIH 64, [2008] ScotCS CSIH_64, 2009 SLT 92

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EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

Lady Paton

Lord Clarke

Lord Emslie

[2008] CSIH 64

P818/06

OPINION OF THE COURT

delivered by LADY PATON

in the cause

HYALTECH LIMITED

Petitioners:

for

Judicial Review of a decision of the Medicines and Healthcare Products Regulatory Agency (MHRA)

_______

Petitioners and Reclaimers: Cormack, Solicitor-Advocate; McGrigors LLP

Respondents (MHRA): Brodie; Office of the Solicitor to the Advocate General for Scotland

5 December 2008

Introduction

[1] Hyaltech Limited manufactures medicinal products and medical devices. One of its products comprises two ampoules of Visthesia Topical ("Topical") and a hypodermic syringe containing Visthesia Intracameral ("Intracameral"). The items are packaged in a cardboard box with an information leaflet, and are sold for use during cataract surgery.

[2] Topical is a viscoelastic solution, applied to the surface of the eye. It contains sodium hyaluronate which hydrates and lubricates the cornea, and lidocaine which acts as a local anaesthetic. Intracameral is also a viscoelastic solution containing sodium hyaluronate and lidocaine, but in different proportions. Intracameral is injected into the anterior chamber of the eye creating a space within which surgery can take place with a reduced risk of mechanical damage to ocular structures.

[3] In 2002, a question arose whether Topical and Intracameral should be classified as medicinal products or as medical devices in terms of United Kingdom regulations implementing European Community Directives. If the correct classification was "medicinal product", a particular licensing regime applied: Hyaltech would have to cease marketing the product pending clinical tests, investigations, and the grant of the relevant licence. If, on the other hand, the correct classification was "medical device", all the regulatory procedures had already been complied with, and Hyaltech could continue marketing the product without further procedure.

[4] The relevant licensing authority in the United Kingdom is the Medicines and Healthcare Products Regulatory Agency ("MHRA"), an executive agency of the Department of Health. The MHRA accepted that Intracameral was a medical device which did not require a licence. However they formed the view that Topical was a medicinal product requiring a licence. Hyaltech disagreed. Parties entered into a dispute procedure. The case was considered by a Review Panel on Borderline Products comprising four representatives from industry and academe with scientific and medical qualifications, chaired by a legally-qualified retired solicitor. They heard evidence from witnesses, and considered written material including expert reports, manufacturer's leaflets, patents, written submissions, and outline arguments. They also heard oral argument from lawyers representing Hyaltech and the MHRA. The Panel then issued their Advice, reproduced in paragraph [16] below. The Advice was that Topical was properly classified as a medicinal product. The Advice did not include any view on Intracameral, as the Panel did not have to consider its classification.

[5] The MHRA considered the Advice issued by the Review Panel, together with other material. They then issued a final determination dated 21 December 2004, categorising Topical as a medicinal product, and instructing Hyaltech to cease production until the necessary clinical tests had been carried out and a licence obtained. The MHRA omitted to attach reasons to their determination. Hyaltech sought judicial review on inter alia that ground. The determination was reduced of consent. The MHRA then issued a second final determination dated 31 March 2006 supported by reasons, all as set out in paragraph [17] below. Hyaltech sought judicial review and reduction of that second determination, contending that the Review Panel had failed to provide proper and adequate reasons in their Advice thus leaving the MHRA without adequate guidance when reaching their determination. Hyaltech further contended that the determination was ultra vires as the MHRA had made material errors of law, taken irrelevant matters into account, and left relevant matters out of account.

[6] A debate took place before Lord Macphail. On 15 May 2007, he refused the petition. Hyaltech reclaimed. The MHRA gave an undertaking not to enforce their determination pending the outcome of the case.

Background information: European market and information leaflets

[7] Hyaltech market Topical and Intracameral throughout Europe. In 2002, the relevant licensing authority in the Netherlands accepted that both Topical and Intracameral fell within the category of "medical device". The mark "CE" (indicating conformity with the Directive) was then printed on the cardboard boxes containing the ampoules of Topical and the syringe of Intracameral, which were sold throughout Europe.

[8] In 2002, Hyaltech's Information for Use leaflet (IFU 2002) contained the following passage:

"Uses

Visthesia topical hydrates and lubricates the surface of the eye in preparation for intraocular surgery, with analgesia.

Application 5 minutes before intraocular surgery enables hydration of the surface tissue and diffusion of the analgesic through the viscous solution to be absorbed directly onto the cornea. A second application immediately before surgery supplements the initial application to provide hydration, lubrication and analgesia of the cornea for the early stages of the surgical procedure.

The viscous solution brings the anaesthetic into intimate contact with the corneal epithelium through which it is absorbed. Anaesthesia occurs rapidly usually within 5 minutes. The duration of effect is normally 20 to 30 minutes."

[9] During 2003 the relevant licensing authority in France entered into correspondence with Hyaltech. As a result, the wording of the IFU leaflet was revised, one change being the insertion of the word "ancillary" with reference to the anaesthetic effect of the lidocaine component of Topical. The amended passage in the IFU 2003 was in the following terms:

"Uses

Visthesia topical hydrates and lubricates the surface of the eye in preparation for and during intraocular surgery.

Application before intraocular surgery enables hydration of the corneal epithelium cells. It ensures that the cornea stays clear and hydrated throughout the surgery and is not compromised. The lubricating properties ensure that a clean small incision can be made with minimal damage.

A second, supplementary, application is used only if needed.

Lidocaine is incorporated in the topical viscoelastic solution as an ancillary anaesthetic agent. It should be included in the ophthalmic surgeon's routine anaesthetic regimen."

[10] If Topical were to be classified in the United Kingdom as a medicinal product (rather than a medical device), Hyaltech would experience some administrative difficulties as the classification would be different from that generally accepted in the rest of Europe (although not officially tested in any European country other the Netherlands, and thus possibly open to challenge elsewhere in Europe: cf Optident Limited v Secretary of State for Trade and Industry [2001] 3 CMLR 1, Lord Slynn of Hadley at pages 9 to 10). Moreover the cost and time involved in making an application to the MHRA for the relevant medicinal product licence would be respectively about £250,000 and two and a half years. Until licensed, Hyaltech would be unable to sell Topical in the United Kingdom. Hyaltech found that prospect difficult to accept, bearing in mind the proven safety and efficacy of Topical. Hyaltech acknowledged, however, that no difficulty would arise from packaging a licensed medicinal product (Topical) together with a medical device (Intracameral) in the same presentation box.

The regulatory framework

[11] As counsel for the MHRA suggested during the reclaiming motion, a simplified version of the various definitions might be as follows: a "medical device" has a mechanical action, whereas a "medicinal product" has a chemical action. However the regulations and the Directive are not so straightforward. Relevant passages include:

[12] The Medical Devices Regulations 2002: The Medical Devices Regulations 2002 (implementing inter alia Directive 93/42/EEC of 14 June 1993 concerning medical devices, and in particular articles 1.2 and 1.4) defines "medical device" in regulation 2(1) as follows:

"'medical device' means an instrument, apparatus, appliance, material or other article, whether used alone or in combination, together with any software necessary for its proper application, which -

(a) is intended by the manufacturer to be used for human beings for the purpose of -

(i) diagnosis, prevention, monitoring, treatment or alleviation of disease,

(ii) diagnosis, monitoring, treatment, alleviation of or compensation for an injury or handicap,

(iii) investigation, replacement or modification of the anatomy or of a physiological process, or

(iv) control of conception; and

(b) does not achieve its principal intended action [italics added] in or on the human body by pharmacological, immunological or metabolic means, even if it is assisted in its function by such means,

and includes devices intended to administer a medicinal product or which incorporate as an integral part a substance which, if used separately, would be a medicinal product and which is liable to act upon the body with action ancillary to that of the device; ..."

[13] MEDDEV: The European Commission published guidelines to assist in the practical application of the Medical Devices Directive 93/42/EEC. The relevant version is referred to as MEDDEV 2.1/3 rev 2 July 2001 ("MEDDEV"). Although MEDDEV is expressly made not legally binding, it is expected to be followed, and is adopted by the MHRA. MEDDEV provides inter alia:

"A.2 General principles

The principal intended action [italics added] of a product may be deduced from:

· the manufacturer's labelling and claims

· scientific data regarding mechanism of action.

Although the manufacturer's claims are important, it is not possible to place the product in one or other category in contradiction with current scientific data. Manufacturers may be required to justify scientifically their rationale for classification of borderline products ...

A.5 Medical devices incorporating a medicinal substance with ancillary

action

It follows from the definition of a medical device that devices may incorporate substances as an integral part which, if used separately, may be considered to be a medicinal product. This is specifically addressed in article 1(4) MDD which makes it clear that such products are devices, provided that the action of the medicinal substance is ancillary to that of the device, as reflected in the product claim and as supported by the scientific data provided by the manufacturer of the devices."

[14] The Medical Devices Directive 93/42/EEC: The Medical Devices Directive 93/42/EEC, which the 2002 Regulations implement, contains the following definitions in Article 1:

"2. For the purposes of this Directive, the following definitions shall apply:

(a) 'medical device' means any instrument, apparatus, appliance,
material or other article, whether used alone or in combination ... intended by the manufacturer to be used for human beings for the purpose of: ...

- ... replacement or modification of the anatomy or of a physiological process ...

and which does not achieve its principal intended action in or on the human body by pharmacological, immunological or metabolic means, but which may be assisted in its function by such means; ...

4. Where a device incorporates, as an integral part, a substance which, if used separately, may be considered to be a medicinal product within the meaning of Article 1 of Directive 65/65/EEC [the precursor of Directive 93/42/EEC] and which is liable to act upon the body with action ancillary to that of the device, that device must be assessed and authorized in accordance with this Directive.

5. This Directive does not apply to:

[15] Medicinal products: Finally, "medicinal product" is defined in the Medical Devices Regulations 2002 by reference to article 1.2 of Directive 2001/83/EEC, which (as amended) provides that a medicinal product is:

"Any substance or combination of substances presented as having properties for treating or preventing disease in human beings;

Any substance or combination of substances which may be used in or administered to human beings either with a view to restoring, correcting or modifying physiological functions by exerting a pharmacological, immunological or metabolic action, or to making a medical diagnosis."

The Advice of the Review Panel

[16] The Advice of the Review Panel was in the following terms:

"INDEPENDENT REVIEW PANEL ON BORDERLINE PRODUCTS

MEETING HELD ON THURSDAY 25 NOVEMBER 2004 AT MARKET TOWERS, 1 NINE ELMS LANE, LONDON, SW8 5NQ

Hyaltech Ltd.

Visthesia & Visthesia Light

FINDINGS

The Panel considered the oral and written representations of the MHRA (Borderline Section) and Hyaltech Ltd. In light of the fact that there was no dispute in relation to whether Visthesia and Visthesia Light bore any medicinal claims, the Panel did not consider whether the first limb of the definition of 'medicinal product' ("Any substance or combination of substances presented for treating or preventing disease in human beings or animals") as per Article 1 of Directive 2001/83/EEC was satisfied. The Panel therefore, only had to consider whether the second limb of the definition of 'medicinal product' ("Any substance or combination of substances which may be administered to human beings or animals with a view to making a medicinal diagnosis or to restoring, correcting or modifying physiological function in human beings or in animals is likewise considered a medicinal product") was satisfied. The Panel found that Visthesia and Visthesia Light fell within the second limb of the definition of a medicinal product.

ADVICE
The Panel advised that Visthesia and Visthesia Light are relevant medicinal products and subject to the provisions of The Medicines for Human Use (Marketing Authorisations Etc) Regulations 1994 (S.I. 1994/3144) as amended by The Medicines for Human Use (Marketing Authorisations Etc.) Amendment Regulations 2000 (S.I. 2000/292).

REASONS FOR ADVICE
The products Visthesia and Visthesia Light are presented as kits comprising an intracameral, a viscoelastic cannula and two topical ampoules containing sodium hyaluronate (3mg/ml) and lidocaine hydrochloride (20mg/ml). The topical ampoules are the components under review.

The definition of medical device in Regulation 2(1) of the Medical Devices Regulations 2002 includes devices incorporating a medicinal product 'which is liable to act upon the body with action ancillary to that of the device'. By definition therefore, a product cannot be classified as a device if the medicinal component is more than merely ancillary.

It is well documented that lidocaine is an established medicinal substance with a local anaesthetic action i.e. its effects will modify physiological functions in human beings. Anaesthesia is an essential part of surgery and lidocaine is commonly used by surgeons at the start of a cataract operation. Lidocaine has no effect on the action of the hyaluronate, whereas the hyaluronate has a synergistic effect on the lidocaine.

After having considered all the information available, including the witness statements and evidence, the patent, the claims of the manufacturer (both original and current), other literature and the presentations made by both parties, the Panel held that the anaesthetic element in the products Visthesia and Visthesia Light is not an ancillary medicinal product, but has a separate and substantial action of its own. The lidocaine is not liable to act on the body with an action ancillary to that of the device itself. Accordingly, neither Visthesia nor Visthesia Light can be considered as a medicinal device for the purposes of the Medical Devices Regulations 2002.

The Panel, therefore, considered that Visthesia and Visthesia Light fall within the second limb of the definition of a medicinal product as stated in Article 1 of Directive 2001/83/EEC."

The second final determination of the MHRA

[17] The second final determination of the MHRA, issued by letter dated 31 March 2006, extended to eight typed A4 sheets. Relevant extracts only are reproduced here:

"NOTICE OF FINAL DETERMINATION IN ACCORDANCE WITH REGULATION 3A OF THE MEDICINES FOR HUMAN USE (MARKETING AUTHORISATION ETC) REGULATION 1994, AS AMENDED

VISTHESIA(tm) & VISTHESIA(tm) LIGHT

I refer to your request for a review of the MHRA's Provisional Determination that the above named products are medicinal products.

As you are aware, the Independent Review Panel for Borderline Products heard full argument from lawyers [representing] both parties and considered all relevant information and has advised that the above products would fall within the second limb of the definition of a medicinal product. I enclose a copy of their findings for your information.

In making its determination the Agency has considered afresh all relevant information, including the advice of the Independent Review Panel for Borderline Products, your comments and the additional information provided and gives notice that it has determined on behalf of the licensing authority that the topical components in both Visthesia(tm) and Visthesia Light(tm) are relevant medicinal products.

Accordingly these products are subject to the provisions of The Medicines For Human Use (Marketing Authorisations Etc) Regulations 1994 (S.I. 1994/3144), as amended. ('the Marketing Authorisations Regulations'). The reasons for this decision are as follows.

[The MHRA quoted regulation 2(1) of the 2002 Regulations, and continued:]

"In making this determination it is necessary to consider the meaning of 'intended purpose', 'principal intended action' and 'ancillary'. The definition in Directive 93/42/EC ('the Directive') and the Medical Devices Regulations is supplemented by Guidance issued by the European Commission: the Medical Devices Guidance Document, or MEDDEV. The Guidance is authoritative but not legally binding. The MHRA accepts the relevance of these matters, although it notes that they are not exhaustive of the material which may be considered; nor are they set out in either the Directive or the Medical Devices Regulations.

Under the Directive:

Intended purpose relates to the question of whether the product has, overall one of the four purposes set out in [the definition of 'medical device']. This is determined by having regard to the data supplied by the manufacturer in the labelling, instructions for use and promotional materials. Insofar as the Guidance makes reference to manufacturers' claims, where the product remains unchanged, this is not limited to current claims. The issue of manufacturer's intent is determinative only at the initial stage of deciding whether a product has, overall, one of the four purposes which would suffice to make it a device (eg the purpose of investigation, replacement or modification of the anatomy or of a physiological process).

The principal intended action of the product is to be determined objectively. Although the Guidance (p3) states that the principal intended action may be deduced from manufacturers' claims and scientific data, it notes that it is not possible to categorise a product in contradiction with current scientific data and that manufacturers may be required to justify scientifically their classification rationale. The question of whether or not such action is achieved by pharmacological, immunological or metabolic means can only be addressed by scientific evidence.

Taking into account the examples given in the Guidance, MHRA is of the view that: Ancillary action, in relation to the principal intended action, is an action which is insignificant or of little importance; or an action which is subsidiary or auxiliary, or which supplements or provides support, to the principal intended action.

Because the definition of medical device includes devices incorporating a medicinal product 'which is liable to act upon the body with action ancillary to that of the device' it does not include devices incorporating medicinal products whose action is more than 'ancillary'. Such devices do not come within the scope of the Medicinal Devices Regulations and are to be regulated as medicines. The question of whether a medicinal component of a device has an ancillary action is to be determined according to whether it is 'liable' to have an ancillary action, not whether it is intended by the manufacturer to have an ancillary action. If an action is more than ancillary, this does not necessarily mean that it must be a principal intended action.

The Guidance states that the issue of whether the action of a medicinal component is ancillary is to be decided in the light of 'the product claim' and the 'scientific data provided by the manufacturer of the devices' (para. A.5). It is important to note that manufacturers' claims cannot prevail over scientific data (para. A.2).

The Present Case
The products Visthesia(tm) and Visthesia Light(tm) are presented as kits and therefore each of the components needs to be considered individually. The kits contain two 0.3ml topical ampoules of a sterile viscous solution comprising of 0.3% sodium hyaluronate and 2% lidocaine hydrochloride in phosphate buffered saline which is used prior to intraocular surgery. In this case, because the function of sodium hyaluronate is that of a medical device it is necessary to consider whether the combination production could be classified as a medical device.

Whilst the Agency takes the view that the intracameral and the viscoelasitic cannula components of each kit are appropriately controlled as medical devices, the Agency considers the topical ampoules in each kit to be medicinal products. The Agency and Hyaltech Limited agree that the topical component of Visthesia is intended to be used for human beings for the purpose of investigation, replacement or modification of the anatomy or of a physiological process. The intended purpose is clearly to facilitate intraocular surgery.

The ingredient lidocaine is an established topical anaesthetic which acts by preventing the generation and transmission of impulses along nerve fibres and at the nerve endings. If used separately it fulfils the definition of a medicinal product and would be regulated as such. Lidocaine clearly acts by a pharmacological mechanism and it is agreed between us that lidocaine is a medicinal product.

A product falls outside of the definition of a device if the action of the anaesthetic component is more than ancillary. It is therefore for the Agency to determine whether the action of the lidocaine in the topical components is ancillary to the purpose of the topical component as a whole. Whether or not such action is ancillary is a question of fact.

In the present case, MHRA is of the view that the lidocaine component is liable to have an effect on the body which is more than ancillary because:

1) The evidence suggests that the anaesthetic function of Visthesia Topical is of greater, or at least equal, importance relative to the wetting function served by the sodium hyaluronate.

2) Even if that is not the case, it is the Agency's view that the anaesthetic function of Visthesia Topical is at least a significant, independent function of the product and cannot properly be regarded as ancillary.

Evidence in support of MHRA's conclusions includes:

Publications"

[The MHRA noted publications which had been referred to, and continued:]

"Expert Opinion
From the expert evidence, it can be deduced that:

Topical anaesthetic is routinely used in cataract surgery in the UK. Both Mr Singh and Mr Mackintosh [consultant ophthalmic surgeons] agree that it is necessary for usual surgical practice. It is not in dispute that Visthesia provides topical anaesthesia. Some surgeons also provide anaesthesia by injection: some do not. There is therefore no dispute that topical anaesthesia plays an essential role.

Even where anaesthesia is given by injection subsequent to topical anaesthesia, topical anaesthesia clearly plays an important role in anaesthetizing the eye. The opinion of Mr Mackintosh indicates that an injection would not normally be given without prior local anaesthesia. Although Mr Mackintosh states that he would add additional topical anaesthetic, he notes that Visthesia can fulfil that function:

'A fault in the descriptive use of this product in Hyaltech's literature is that it emphasises using it preoperatively, but does not stress that it should be used during the operation....'.

The experts disagreed over the function of the topical sodium hyaluronate. Mr Singh noted that it had an important role as a wetting agent, but was not needed for lubrication because the eyelid does not blink during surgery. Mr Mackintosh described its function both in terms of wetting and lubrication. Whether or not sodium hyalunorate is a more novel or interesting compound than lidocaine, as suggested by Mr Mackintosh, is not relevant to this determination. The legal test is whether or not the action is ancillary. Mr Mackintosh does not suggest that the topical anaesthetic in Visthesia is unimportant.

Expert evidence shows that the product is intended to facilitate surgery in two ways, by providing anaesthesia and acting as a wetting agent. Both experts agree that wetting and anaesthesia are essential for surgery. The fact that two substances with two different objectives are used in combination does not, of itself, reduce either objective to an ancillary role."

[The MHRA then referred to the Inventor's Statement, the Manufacturer's Information, the CIBA Vision Press Release 2002, and the Product Name, and continued:]

"Changes to the Information for Use leaflet
During our investigation, the Information For Use leaflet was significantly amended in 07/2003 in order to place less emphasis on the role of the anaesthetic claim relating to lidocaine. However, the product formulation has not altered in any way and the action of the lidocaine in the topical ampoules remains to provide anaesthesia for cataract surgery. The change in the manufacturer's claim does not reflect any change in the scientific evidence of the anaesthetic effect of lidocaine [or] the concentration contained in the product or as to how the product is used.

For the reasons set out above, MHRA has determined that the topical components in Visthesia and Visthesia Light fall outside of the definition of medical device in the Medical Devices Regulations and are relevant medicinal products for the purposes of the Marketing Authorisations Regulations.

Withdrawal of the Product from the Market
The Marketing Authorisations Regulations do not make provision for a staged withdrawal from the market of an unlicensed medicinal product. I must therefore ask you to cease the sale and supply of this product with immediate effect and to confirm in writing, within twenty one days of the date of this letter, that you have made the necessary arrangements to do this. Please provide copies of your company's notices or letters setting this in motion. If that assurance is not received within twenty one days, supported by evidence of compliance, I shall refer the matter to the Agency's Enforcement Group."

Submissions on behalf of Hyaltech

[18] The submissions on behalf of Hyaltech were ultimately restricted to the contention that the Lord Ordinary had erred in failing to hold that the MHRA had acted ultra vires by making material errors of law, in particular errors in construction, and errors by taking irrelevant matters into account and leaving relevant matters out of account (grounds of appeal 2.1 to 2.5, 2.7 to 2.8). Grounds of appeal 1.1 to 1.6, focusing on the alleged failure of the Review Panel to provide proper and adequate reasons in their Advice, were not insisted upon. Mr Cormack on behalf of Hyaltech moved the court to grant the reclaiming motion; to recall the interlocutor of the Lord Ordinary dated 15 May 2007 save insofar as it repelled Hyaltech's first plea-in-law; to sustain Hyaltech's second to fourth pleas-in-law; and to grant the final orders sought in statements 3.2 to 3.5 of the petition, namely declarator that the final determination was ultra vires, reduction of that final determination, suspension of the purported notice requiring the cessation of the sale and supply of Topical, and expenses. As an alternative, in the event that the court found that disputed facts required to be clarified before a view could be reached, it was submitted that this court should order a hearing of evidence on specified issues before the Lord Ordinary.

Errors in construction

[19] Mr Cormack submitted that the MHRA had erred in law in that they had wrongly construed the Medical Devices Regulations 2002. The proper method of construing the definition of "medical device" in regulation 2(1) was to ascertain, objectively, "the principal intended action in or on the human body". That was to be obtained from the manufacturer's literature, claims, labelling and promotional material, and checked against the scientific data. The final words of the definition of "medical device" in regulation 2(1), namely "and includes devices intended to administer a medicinal product or which incorporate as an integral part a substance which, if used separately, would be a medicinal product and which is liable to act upon the body with action ancillary to that of the device", reflected article 1.4 of the Directive, and made it clear that a product could still be a medical device although it was assisted in its function by excluded means (namely pharmacological, immunological or metabolic means). However those final words did not add anything to the preceding words. In particular the final words did not impose an additional test, or a more stringent test, than the preceding words. Those words were merely for the avoidance of doubt, with the word "ancillary" having the restricted meaning of "subordinate" (rather than the range of meanings adopted by the MHRA, namely insignificant, of little importance, subsidiary or auxiliary, or supplementary or providing support). The only question at issue was whether the principal intended action was achieved by the device by non-excluded means. Examples of medical devices were given in paragraph A.3 of the MEDDEV Guidelines. One example (bone cement) illustrated the correct approach to construction: the "principal intended action" of the device (as ascertained from the manufacturer's claims and scientific data) was the adhesive function; the integral pharmacological substance (namely, an antibiotic, which could be used separately) was "ancillary" in the sense of "secondary or subordinate".

[20] Applying the proper construction of the 2002 Regulations to the product Topical, it was clear that the principal intended action of the device was the hydration of the surface of the eye during cataract surgery. Hyaltech did not claim that the lidocaine provided all necessary anaesthesia during the cataract operation. The manufacturer thus intended the lidocaine to have a subsidiary role in the product. Accordingly on a proper construction of the Regulations, ascertaining the "principal intended action" of the device, the action of the lidocaine was subordinate to the action of the device, and was not, as the MHRA had found as a matter of fact, of equal if not greater importance. It was an error to ascertain, as a matter of fact, the actual properties and effects of lidocaine: the correct approach was to focus upon the manufacturer's intention.

[21] Summarising Hyaltech's position on construction, Mr Cormack submitted that, as a matter of law, the correct approach to the construction of the definition of "medical device" in regulation 2(1) involved five steps. The decision-making body had to:

1. ascertain, on an objective assessment of the manufacturer's intention, whether the product was intended to be used for human beings, in the present case for the replacement or modification of the anatomy or of a physiological process: regulation 2(1) definition of "medical device" paragraph (a)(iii);

2. identify the intended action(s) of the material, on a consideration of the manufacturer's claims and scientific data;

3. in the event that there was more than one intended action, decide, with reference to the manufacturer's claims and scientific data, which of the intended actions was the principal intended action;

4. consider, on the basis of scientific evidence, whether the principal intended action was achieved by pharmacological, immunological or metabolic means;

5. in the event that the principal intended action was identified as being achieved by pharmacological, immunological or metabolic means, or in the event that no one intended action could be categorised as "principal", then the material could not fall within the definition of a medical device and could not fall within the additional words at the end in the definition of medical device in regulation 2(1) - which words were inserted merely "for the avoidance of doubt".

Thus the proper construction of those additional words did not impose an extra step in the test for ascertaining whether a product was a medical device. The words simply made clear that an item could qualify as such a device as a result of the application of the five steps set out above, despite containing something pharmacological. The result of the application of those steps was that the action of that additional pharmacological substance was ancillary in the sense that it was not the principal intended action, and the word "ancillary" meant "secondary" or "subordinate". It was difficult to see how the 2002 Regulations could operate if any other approach to construction were to be adopted. Thus on a proper construction of the 2002 Regulations, there had to be one single principal intended action. If there were two principal intended actions, the product could not be categorised as a medical device.

[22] In concluding his chapter on construction, Mr Cormack submitted that the Lord Ordinary should have held that there were material errors of law going to the root of the issues to be determined. In particular the MHRA had misconstrued the steps of statutory interpretation by (i) applying as a step in relation to the integral medicinal substance a test other than the required test of "principal intended action", leading the MHRA at page 4 of the determination to an erroneous characterisation of the very issue for determination; and (ii) by adopting an erroneous meaning of "ancillary". Those errors of law resulted in the MHRA's failure to address matters in the proper way, namely ascertaining the intended action of the product, and the principal intended action (having regard to the manufacturer's claims and scientific data). The MHRA had failed to undertake the relevant objective assessment of the intention of the manufacturer, having regard to the current claims of the manufacturer and the scientific data.

Irrelevant matters taken into account, and relevant matters left out of account

[23] IFU leaflets: Mr Cormack submitted that the MHRA, having noted the alterations made to the IFU leaflets between 2002 and 2003 (see paragraph [9] above), were obliged to address the question whether the manufacturer's current claims were consistent with the classification of Topical as a medical device. Yet that question appeared not to have been addressed. Thus the MHRA had erroneously left out of account the fact that the current IFU leaflet was consistent with the classification of Topical as a medical device.

[24] Mr Mackintosh's evidence: Mr Mackintosh, a consultant ophthalmic surgeon, gave evidence to the MHRA. In paragraph [95] of his opinion, the Lord Ordinary concluded, correctly in Mr Cormack's submission, that the MHRA had misunderstood a sentence of that evidence. As was clear from the Lord Ordinary's comments in paragraph [95], the MHRA had taken the sentence to mean that Mr Mackintosh did not consider Topical as useful during surgery for the effect of the hyaluronate in improving corneal clarity, whereas that was not in fact the case. The MHRA had thus taken irrelevant factors into account.

[25] Misconstruction of the patent: The MHRA had misconstrued certain passages in the patent, as noted by the Lord Ordinary in paragraphs [76] and [99] of his Opinion. It was not possible to hold those misconstructions to be minor, as had the Lord Ordinary. On the contrary, they were highly material. Thus the MHRA had left relevant factors out of account, and had taken irrelevant factors into account.

[26] In concluding the chapter on matters erroneously taken into account or left out of account, Mr Cormack submitted that the Lord Ordinary had erred in refusing to hold that the determination of the MHRA had been vitiated by those errors.

Watt v Lord Advocate and Pharma Nord (UK) Ltd

[27] In the course of the debate, reference was made to Watt v Lord Advocate 1979 S.C. 120 and R v Medicines Control Agency, ex parte Pharma Nord (UK) Ltd 1998 3 C.M.L.R. 109. Mr Cormack accepted that the court should be cautious about interfering with the decision of a specialist body in a complex specialist field. However Hyaltech's contention was that the MHRA had made material errors of law, as outlined above. They had asked themselves the wrong question. The issue was judicially reviewable as it fell outwith the category of intra vires error of law referred to in Watt. The court was being asked to exercise the restrained supervisory jurisdiction outlined in Pharma Nord (UK) Ltd.

Possible reference to the European Court of Justice

[28] On behalf of Hyaltech, it was accepted that if the court considered that there was doubt as to the proper construction of regulation 2(1) of the 2002 Regulations (implementing Directive 92/42/EEC), a reference could be made to the European Court of Justice.

Submissions on behalf of the MHRA

[29] Counsel for the MHRA moved the court to refuse the reclaiming motion and to adhere to the interlocutor of the Lord Ordinary.

The construction adopted was correct

[30] Counsel accepted that, when construing regulation 2(1), the first question was what was the manufacturer's intent, and whether the use fell within one of the four articulated grounds (set out in paragraph [12] above). Thus reference could be made to the manufacturer's claims, labelling, and advertisements, and also to scientific data, and an objective view of the principal intended action reached. To that extent, counsel did not disagree with Mr Cormack. However when one reached the clause at the end of the definition of "medical device" in regulation 2(1) beginning with the words "and includes", the issue of "principal intended action" did not arise. There was no mention of principal intended action in that clause. On the contrary, the words directed the decision-maker to decide a question of fact on the basis of scientific and medical judgment, namely whether the action of the lidocaine was ancillary to that of the device. Further, on a proper construction, the word "ancillary" could have the range of meanings referred to by the MHRA and the Lord Ordinary. Different circumstances might require different meanings.

[31] Counsel further submitted that if the intention of the manufacturer were held to come into play when construing the clause at the end of the definition of "medical device" in regulation 2(1), the manufacturer would be the arbiter as to whether the product was, or was not, a medical device. That could not be correct. The 2002 Regulations implemented a Community Directive which had as its aim the safety of patients and the identification of appropriate regulatory regimes, all as set out in the preamble to the Directive 93/42/EEC. The 2002 Regulations were concerned with "borderline products", in other words with products in relation to which there was quite obviously some doubt about which regulatory regime should apply. Where something which appeared to be a medical device "incorporate[d] as an integral part a substance which, if used separately, would be a medicinal product", the decision-maker was directed to assess the various components of the device, and to decide as a matter of fact whether the substance in question "[was] liable to act upon the body with action ancillary to that of the device". The regulation was intended to achieve an objective assessment of that factual question, and it would be surprising if the manufacturer's opinion were to be determinative.

[32] The construction contended for by Hyaltech deprived article 1.4 of the Directive (and the final words of the definition of medical device in the 2002 Regulations) of any meaningful purpose. By contrast, the MHRA had correctly adopted a purposive construction of the regulatory framework, which had the effect that the decision-making body determined which regulatory regime should apply in order to achieve the protection of the patients. Neither the Directive nor the Regulations suggested that there could not be two principal intended actions. Thus the MHRA were entitled, at page 4 of their determination, to find that:

"1) The evidence suggests that the anaesthetic function of Visthesia Topical is of greater, or at least equal, importance relative to the wetting function served by the sodium hyaluronate.

In a specialist area, it was for the specialist decision-making body to make the decision.

No irrelevant matters taken into account, or relevant matters left out of account

[33] IFU leaflets: Counsel submitted that the MHRA had taken into account the wording of the 2002 leaflet, and compared it with the changed wording of the 2003 leaflet. They concluded that there had been a change of emphasis in the wording so far as anaesthesia was concerned, but that the product remained unchanged. In so doing the MHRA could not be said to have taken irrelevant matters into account, or to have left relevant matters out of account.

[34] Mr Mackintosh's evidence: It was not necessary for the MHRA to record in their determination every part of Mr Mackintosh's evidence. What they had noted in relation to his evidence did not reveal any error or misunderstanding. Again therefore the MHRA had not been demonstrated to have taken irrelevant matters into account, or to have left relevant matters out of account.

[35] Patent: The MHRA may have misunderstood parts of the patent. However in the whole context, any such misunderstanding was immaterial.

Watt v Lord Advocate and Pharma (Nord) UK Ltd

[36] In response to a discussion which developed during Mr Cormack's submissions, counsel for the MHRA reminded the court of a line of Scottish authority to the effect that a specialist decision of a specialist body, made within their jurisdiction, addressing the correct question, should not be interfered with by the Court of Session exercising its supervisory jurisdiction, even although the court might consider the decision to be erroneous. An intra vires error could not be challenged. Authorities mentioned, but not discussed in any detail, included Watt v Lord Advocate 1979 S.C. 120; O'Neill v Scottish Joint Negotiating Committee for Teaching Staff 1987 S.L.T. 648, at page 650; Rae v CICB 1997 S.L.T. 291, at page 295F-J; Milton v Argyll and Clyde Health Board 1997 S.L.T. 565, at page 568 B-E; Diamond v PJW Enterprises Ltd 2004 SC 430 at page 441 et seq. Counsel nevertheless accepted that circumstances could be envisaged in which a body such as the MHRA might make a significant error, and that it would be unfortunate if judicial review were not available. Also in Pharma Nord (UK) Ltd, Lord Woolf envisaged a supervisory jurisdiction in circumstances such as the present, albeit a jurisdiction which should be exercised with great caution. Ultimately, counsel did not seek to persuade the court that the present case should be governed by the authorities referred to, or that the reclaiming motion should be refused on the basis of those authorities alone.

Possible reference to the European Court of Justice

[37] Counsel for the MHRA accepted that the court had an obligation to refer the case to the European Court of Justice in the event that there was any real doubt about the proper construction of article 1.4 as implemented in the 2002 Regulations. However he contended that the MHRA's construction was correct, and that it was not necessary to make a reference.

Discussion
The proper construction

[38] It was submitted on behalf of Hyaltech that, as a matter of law, the only proper construction of regulation 2(1) of the Medical Devices Regulations 2002 was as set out in paragraphs [19] to [22] above. That construction meant that the decision-maker had to ascertain, objectively, "the principal intended action in or on the human body" of the item in question. There could only be one principal intended action, and that had to be ascertained from the manufacturer's literature and claims, checked against scientific data. In the case of Topical, applying the five-step method of construction contended for, the principal intended action was the hydration of the cornea, with the anaesthetic effect of lidocaine being ancillary in the sense of secondary or subsidiary. Thus Topical was properly categorised as a "medical device". By failing to adopt the proper construction, and by holding that the anaesthetic effect of lidocaine was not ancillary and that the final words of the definition of "medical device" in regulation 2(1) could not be satisfied, the MRHA had misdirected themselves and had made a material error of law going to the root of the issues to be determined. The Lord Ordinary should so have held, and should have reduced the second final determination.

[39] We do not agree, for several reasons:

[40] First, a purposive approach to construction should be adopted in respect of regulation 2(1), which implements Directive 93/42/EEC of 14 June 1993 concerning medical devices. The preamble to the Directive outlines as one of its objectives "the safety and health protection of patients, users, and where appropriate, other persons, with regard to the use of medical devices". Supervision and licensing by specialist qualified bodies throughout Europe is envisaged as part of a scheme to ensure that patients' lives and health are not put at risk. In the United Kingdom, the relevant licensing body is the Secretary of State acting through the MHRA. The MHRA must, in terms of paragraph 2 of Annex XI of the Directive, "carry out the assessment and verification operations with the highest degree of professional integrity and the requisite competence in the field of medical devices and must be free from all pressures and inducements, particularly financial, which might influence their judgment or the results of the inspection, especially from persons or groups of persons with an interest in the results of the verifications". Thus it is the function of the MHRA, exercising the highest degree of professional integrity and competence, with independence and without financial inducement, to supervise, assess, and license medical devices (and medicinal products) in the United Kingdom. In our view therefore it would be contrary to one of the stated aims of the Directive and the 2002 Regulations to permit, as Hyaltech contends, the categorisation of an item as a medical device to be in effect determined by the manufacturer's own claims, literature, and advertising material even if checked against scientific data. The construction contended for by Hyaltech would have such a result.

[41] Secondly, the construction advanced by Hyaltech is strained and artificial. It requires certain precise steps to be followed (all as set out in paragraph [21] above); a reading-in of the words "for the avoidance of doubt" at the beginning of the final words of the definition of medical device in regulation 2(1); the treatment of those final words (and thus their source, article 1.4 of the Directive) as otherwise superfluous, adding nothing to the preceding text; the ignoring of the plain meaning of the words "liable to act upon the body" (which in our view must be a question of fact to be ascertained by the specialist body rather than a matter to be determined by the manufacturer's intention); and finally, restricting the meaning of "ancillary" to "secondary or subsidiary". In relation to that last point, "the courts have repeatedly warned against the dangers of taking an inherently imprecise word, and by redefining it thrusting on it a spurious degree of precision.": Lord Mustill at page 28H of R v Monopolies and Mergers Commission [1993] 1 W.L.R. 23. In our view, there is nothing in either the Directive or the 2002 Regulations justifying such a restricted meaning of "ancillary", and indeed circumstances can be envisaged in which the spectrum of meanings offered by the word may be required to give effect to the underlying purpose of the Directive and the Regulations. In some contexts the proper meaning may be "insignificant", or "of little importance", or "subsidiary", or "auxiliary", or "which supplements or provides support". We do not therefore accept Mr Cormack's argument that, having identified a principal intended action of a device, there is no need to assess whether the anticipated action of an integral pharmacological substance is ancillary to the action of the device. On the contrary, in our opinion that second question has to be addressed, and if the integral pharmacological substance is not considered to be "liable to act upon the body with action ancillary to that of the device" (construing "ancillary" appropriately according to context), then the correct classification cannot be that of "medical device".

[42] A third reason for rejecting Mr Cormack's argument is that the construction contended for by Hyaltech does not sit easily with the hypothesis contained in the final words of the definition of medical device in regulation 2(1). As noted previously, the final words are:

"and includes devices intended to administer a medicinal product or which incorporate as an integral part a substance which, if used separately, would be a medicinal product and which is liable to act upon the body with action ancillary to that of the device".

In the present case, the manufacturer obviously did not intend the component lidocaine to be used separately from the compound Topical, having intentionally incorporated the lidocaine in the compound. Thus to focus upon the manufacturer's intention for the purposes of the hypothesis referred to above is to focus upon nothing: the manufacturer did not address or consider the hypothesis upon which the comparison is to be made.

[43] Fourthly, we do not accept that either the Directive or the 2002 Regulations excludes the possibility of two or more principal intended actions of a medical device. Yet it is fundamental to the construction advanced on behalf of Hyaltech that a medical device must have only one principal intended action.

[44] In conclusion, we are not persuaded that the construction advanced on behalf of Hyaltech is, as a matter of law, the proper construction.

[45] By contrast, we are satisfied that the construction adopted by the MHRA cannot be criticised. That construction does not require the reading-in of the words "for the avoidance of doubt". It does not render the final words of the definition of medical device in regulation 2(1) otiose or superfluous. It does not restrict the meaning of "ancillary" to "subsidiary or secondary". It adopts the plain meaning of the words "liable to act upon the body". Significantly, the construction fulfils the purpose underlying the Directive and the 2002 Regulations in that it is the independent specialist body and not the manufacturer who decides, on the basis of all the circumstances (including the manufacturer's claims and scientific data), what effect the lidocaine is liable to have on the human body, and whether or not the action of the lidocaine is ancillary to that of the device. Thus the specialist body, free from commercial pressures or financial interests, fulfils the important role of protecting the health and safety of patients, users, and others.

[46] Further, the construction adopted by the MHRA does not require reference to a non-existent factor in the course of applying the hypothesis contained in the final words of the definition of medical device in regulation 2(1). As noted in paragraph [42] above, the manufacturer quite clearly did not intend the lidocaine to be used separately, and thus such an intention cannot meaningfully be attributed to the manufacturer.

[47] Finally, the construction adopted by the MHRA permits the identification of two or more principal intended actions of the device. There is therefore no artificial constraint limiting the outcome of any assessment to one (but not more) principal intended action.

[48] It is accordingly our view that the construction adopted by the MHRA cannot be criticised. The construction is certainly not one which, in law, the MHRA were not entitled to adopt. We have not identified any further possible constructions which might also be correct. Accordingly, as we are in no real doubt about the proper construction, we do not consider it necessary to make a reference to the European Court of Justice.

Criticisms relating to the MHRA's treatment of the evidence

[49] IFU leaflets: It is well settled that administrative bodies such as the MHRA must give clear and adequate reasons, intelligible to the informed reader: Wordie Property Co Ltd v Secretary of State for Scotland 1984 S.L.T. 345. However there is no requirement that they must give a detailed summary of each and every piece of evidence and the conclusion to be drawn therefrom. In our view, it was not necessary for the MHRA to make a specific finding in their determination that the current IFU leaflet was consistent with the classification of Topical as a medical device. We do not accept that the lack of such an express finding indicates that the MHRA erroneously left that factor out of account. On the contrary, the MHRA specifically noted the change in wording in the leaflets, commenting that:

"The change in the manufacturer's claim does not reflect any change in the scientific evidence of the anaesthetic effect of the lidocaine ...".

That comment could be interpreted as observing that although the wording of the manufacturer's claim had been altered to make it more consistent with classification as a medical device, significantly, the product itself had not changed. The MHRA were entitled to take such a view. We do not therefore accept that the MHRA erred in their treatment of the IFU leaflets.

[50] Mr Mackintosh's evidence: In paragraph [95] of his Opinion, the Lord Ordinary concluded that the MHRA had misunderstood a sentence of Mr Mackintosh's evidence. On that basis, Mr Cormack on behalf of Hyaltech contended that there must be a concern that the MHRA had taken irrelevant factors into account. In our view, however, it was the Lord Ordinary who made a minor error in paragraph [95] when he stated that the MHRA must have misunderstood Mr Mackintosh when they noted in their determination that Mr Mackintosh claimed that:

"A fault in the descriptive use of this product in Hyaltech's literature is that it emphasises using it pre-operatively, but does not stress that it should be used during the operation ..."

The Lord Ordinary made the following observation in paragraph [95] of his Opinion:

"It seems clear that what Mr Mackintosh meant was that the product should be used during the operation because of the utility of the sodium hyaluronate in improving corneal clarity."

In our opinion, the MHRA clearly accepted that Mr Mackintosh's view was that the function of hyaluronate was "wetting and lubrication" of the surface of the eye: see page 5 of their second final determination, under the heading "Expert Opinion". In the sentence in the determination quoted above, the MHRA were simply drawing attention to Mr Mackintosh's view that Hyaltech's literature seemed to emphasise the use of Topical before (rather than during) the operation, and that such an emphasis was inaccurate. Bearing in mind the terms of the 2002 IFU leaflet, quoted in paragraph [8] above, Mr Mackintosh was perhaps entitled to take such a view, and it might be thought that the inaccurate emphasis was corrected in the 2003 IFU leaflet by the insertion of the words "and during" between the words "in preparation for" and "intraocular surgery". We do not therefore accept that the MHRA misconstrued the evidence of Mr Mackintosh.

[51] The patent: It was argued that the MHRA had misunderstood passages in Topical's patent. Reference was made to the Lord Ordinary's Opinion at paragraphs [76] and [99]. We accept that the MHRA may have misunderstood parts of the patent. However bearing in mind the many other adminicles of evidence which the MHRA properly understood and took into account, we agree with the Lord Ordinary that any such misunderstanding was, in the circumstances, minor.

[52] Conclusion: We are not satisfied that any material error arose in the MHRA's construction of the regulations or in their treatment of the evidence. The Lord Ordinary was in our view correct in reaching that conclusion. Nor do we consider that there is any need for a referral to the European Court of Justice. The reclaiming motion should be refused.

Postscript: Watt v Lord Advocate and Pharma Nord (UK) Ltd

[53] In the circumstances, there is no need for us to reach any view, following on certain dicta in Watt v Lord Advocate 1979 SC 120 and other cases, on the exact scope of the court's jurisdiction in Scotland to review a decision of a specialist administrative body where the challenge to it is that the body misapplied the relevant law. In this case, there has been no misapplication of the relevant law.

Decision

[54] We refuse the reclaiming motion and adhere to the interlocutor of the Lord Ordinary. We reserve the question of expenses to enable parties to address us on that matter.