Annotations on the Decision of the Court of Justice of the European Union
in Case C-148/15
- The General Context
On December 19, 2016, the Court of Justice of the European Union (hereafter the “CJEU” or the “Court”) has finally rendered its decision in case C-148/15 (ECLI:EU:C:2016:776). This case has actually to do with the implementation of Council Directive 89/105/EEC relating to the transparency of measures regulating the pricing of medicinal products for human use and their inclusion in the scope of national health insurance systems.
Witnessing the disparities between the measures adopted by Member States on the marketing of medicinal products aiming at the controlling of the public health expenditure on such products (including with regard to all direct and indirect controls on the prices of medicinal products), Directive 89/105/EEC actually seeks for the harmonization of all the relevant national pricing arrangements, including with regard to the manner in which such arrangements operate in individual cases and all the criteria on which they are based. In this regard, it is noteworthy that, beyond a number of specificities characteristic to each of them, in principle all Member States adopted more or less similar provisions. Their conformity with the primary law of the Union has nevertheless been rarely challenged.
C-148/15 concerns the specific case of Germany. However, due to the obtrusive similarities that exist between the national German legislation and that of other Member States adopted in this area, including Romania, the solution rendered by the CJEU is of great import not only for the German authorities and practice, but also for all Member States as it may ultimately give a new shape to the future of prescription-only medicinal products commerce throughout Europe.
The case discussed below was based on the request for a preliminary ruling submitted by Oberlandesgericht Düsseldorf, i.e., the Higher Regional Court of Düsseldorf, Germany, pursuant to Article 271 from the Treaty on the Functioning of the European Union (“TFEU”).
 Published in the Official Journal of the European Union No. L 40/8 of 11.2.1989.
 Occurred, as stated in its Preamble, as a consequence of the inadequacy or absence of competition in the medicinal products market and limitations on the range of products covered by national health insurance systems that may hinder or distort intra-Community trade in medicinal products and thereby directly affect the functioning of the common market in medicinal products.
 According to which “The Court of Justice of the European Union shall have jurisdiction to give preliminary rulings concerning: (a) the interpretation of the Treaties; (…); Where such a question is raised before any court or tribunal of a Member State, that court or tribunal may, if it considers that a decision on the question is necessary to enable it to give judgment, request the Court to give a ruling thereon. Where any such question is raised in a case pending before a court or tribunal of a Member State against whose decisions there is no judicial remedy under national law, that court or tribunal shall bring the matter before the Court. (…).”
The question at hand, as brought before the CJEU, was raised in a litigation between Deutsche Parkinson Vereinigung eV (or “DPV”, a self-help organisation militating for the improvement of the lives of patients suffering from Parkinson’s disease and those of their families) and the Zentrale zur Bekämpfung unlauteren Wettbewerbs eV (i.e., the Association for Protection Against Unfair Competition, or the “ZBUW” – a national association fighting against unfair competition), and concerned the interpretation of Articles 34 TFEU and 36 TFEU respectively.
By its request, the referring Court thus asked the CJEU to clarify whether a national law by which a Member State (namely, Germany) has set fixed uniform prices for the sale by pharmacies of prescription-only medicinal products for human use is compatible with the primary law of the Union, and in particular, with the fundamental principles consecrated by the EU Treaties, such as the free movement of goods within the EU’s single market.
- The Contested Provisions
The discussions in C-148/15 basically revolved around Paragraphs 78(1) and 78(2) of the Gesetz über den Verkehr mit Arzneimitteln (Arzneimittelgesetz), i.e., the German Law on medicinal products, and the provisions contained in the German Law on the Advertising of Medicinal Products prohibiting all monetary advantages, such as discounts and bonuses, and promotional gifts for prescription-only medicinal products.
In 2012, the scope of the cited provisions contained in the German Law on medicinal products was further extended so that to include as well the sale, by mail order, of medicinal products supplied in Germany to end consumers by pharmacies established in another Member State of the European Union. Based on these provisions, the German Ministry issued an order which actually obliged all drug manufacturers to set such a price for their products so that their final price (including all the eventual wholesale additions and pharmacy additions) not to go over some precise margins.
- The Facts
By a business proposal (dated 2009) aiming in principal at promoting a cooperative venture between DPV and the Dutch mail-order pharmacy DocMorris, DPV devised a complex system of bonuses for its members who would purchase, from DocMorris, prescription-only medicinal products for Parkinson’s disease available only in pharmacies.
 Article 34 TFEU (ex. Article 28 TEC): “Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States.”
 Article 36 TFEU (ex. Article 30 TEC): “The provisions of Articles 34 and 35 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.”
 According to which „The Federal Minister for Economics and Technology shall be authorised (…) to establish: 1. price margins for medicinal products which are supplied for re-sale by wholesalers, pharmacies or veterinary surgeons.” and „[Such] [p]rices and price margins shall take account of the legitimate interests of consumers of medicinal products, veterinary surgeons, pharmacies and wholesale traders [whereas] [a] uniform pharmacy retail price shall be guaranteed for medicinal products that may not be sold other than through pharmacies (…)”.
 By Law of October 19, 2012 (BGBl. I, p. 2192).
Considering that such a system actually infringes the aforementioned German Law imposing a mandatory uniform set of prices for the sale by pharmacies of prescription-only medicinal products for human use, ZBUW filed an action for its annulment before the competent Regional Court of Düsseldorf. The Regional Court admitted ZBUW’s request and forced DPV to stop recommending any bonuses systems as the one contested before it. DPV lodged an appeal against this ruling.
The appeal Court (i.e., Higher Regional Court of Düsseldorf who actually addressed the CJEU the preliminary question) agreed with the Regional Court that a system of bonuses as that one proposed by DPV to DocMorris infringed the relevant national legislation, and that “not only in the case where a pharmacist supplies a medicinal product at a price differing from that which must be charged under the Regulation on the pricing of medicinal products, but also in the case where, in parallel to the purchase of a medicinal product at the fixed price, the customer is afforded a benefit which makes the purchase appear more economically advantageous to him.”
Nonetheless, the Higher Regional Court considered that a final and binding decision could only be pronounced after a prior evaluation of the conformity of the national laws under consideration – concerning the fixing of prices for prescription-only medicinal products – with the primary law of the Union. More to the point, it sought to find out whether such provisions generated or not an import restriction in one of the forms explicitly forbidden by Article 34 TFEU, and thus being manifestly contrary to the Union law.
To this purpose, it decided to stay the proceedings and address to the CJEU two punctual questions.
- The Preliminary Questions addressed to the CJEU
The referring German Court wanted in particular to know if:
1) the fixing of prices through a provision contained in a national law of a Member State for prescription-only medicinal products constitutes a measure having equivalent effect (i.e., an indirect quantitative restriction) within the meaning of Article 34 TFEU and, if so,
2) the system of fixed prices for prescription-only medicinal products may nevertheless be justified (based on Article 36 TFEU) on grounds of the protection of health and life of humans, provided however that that system is the only means of ensuring a consistent and uniform supply of medicinal products to the population across all parts of the country.
- The CJEU’s Considerations
Maybe not surprisingly, the CJEU found that the measure adopted by the German authorities restricted quite severely the access of foreign pharmacies on the national market and thus infringed the EU’s fundamental principle of the free movement of goods (for the securing of which Article 34 TFEU have been adopted in the first place). The Court has thus held, in its Decision, that “a system of fixed sales prices, such as that laid down in the German legislation, has a greater impact on pharmacies established in a Member State other than the Federal Republic of Germany than on those which are established within German territory, a fact which could impede market access for products from other Member States more than it impedes such access for domestic products.”. To this extent, since “[German pharmacies] are nonetheless able to sell the products in their dispensaries whereas for pharmacies not established in Germany the internet provides a more significant way by which to gain direct access to the German market”, a measure such as that in discussion constitutes in fact a restriction having equivalent effect within the meaning of Article 34 TFEU!
In reaching this conclusion, the Court took first into consideration the fact that “traditional pharmacies are, in principle, better placed than mail-order pharmacies to provide patients with individually-tailored advice given by the staff of the dispensary and to ensure a supply of medicinal products in cases of emergency. In so far as mail-order pharmacies cannot, given the limited services that they offer, adequately replace such services, it must be held that price competition is capable of providing a more important factor of competition for mail-order pharmacies than for traditional pharmacies, since price competition lays the basis for their potential [in fact a competitive price being the main effective door] to access the German market directly and to continue to be competitive in it.”
Second, by this Decision the Court reiterated that any exception from a rule (such is that consecrated by Article 36 TFEU) must be strictly and restrictively interpreted and applied, i.e., only to the extent where the effect of that rule is manifestly distorted in rapport to its main scope, being contrary to (or more than) the legislature wanted in the first place. Along this avenue of consideration, the Court insisted in its Decision on the idea that “Although the objective of ensuring a safe and high-quality supply of medicinal products throughout a Member State comes, in principle, within the ambit of Article 36 TFEU, the fact remains that legislation which is capable of restricting a fundamental freedom guaranteed by the Treaty, such as the free movement of goods, can be properly justified only if it is appropriate for securing the attainment of that objective and does not go beyond what is necessary in order to attain it”. Additionally, “the existence of a genuine risk to human health must be measured, not according to the yardstick of general conjecture, but on the basis of relevant scientific research.”
The Court hence swept aside the arguments brought by the German Government – according to which the fixed prices system at hand only sought to ensure that mail-order pharmacies do not engage in ruinous price competition which would result in the closure of traditional pharmacies, especially in rural or underpopulated areas which are less attractive areas for such traditional pharmacies (the only units, in that Government’s opinion, which are capable of ensuring safe and high-quality supplies, especially in cases of emergency, tailored advice and effective checks on the medicinal products supplied) – as irrelevant and not sustained by factual evidence. In this context, the Court considered that none of the elements presented during the hearing was able to demonstrate that a fair, free “price competition” would have adversely affected traditional pharmacies in performing certain activities in the general interest, such as producing prescription medicinal products or
 See Para.26 from the Decision.
 Para 23.
 Para 24.
 Para. 34.
 Para. 42.
maintaining a given stock and selection of medicinal products. To the contrary, held the Court, “[it may be very well possible that,] faced with price competition from mail-order pharmacies, traditional pharmacies will be encouraged to improve such activities.”. As for “the alleged relationship between the fixed sales price (…) and a consequential reduction of the risk that patients might attempt to pressurise doctors in order to obtain prescriptions of convenience”, the Court found that nor that had been duly verified either.
- The Decision
In the light of all the above circumstances and considerations, the CJEU decided that “national legislation, such as that at issue in the main proceedings, which provides for a system of fixed prices for the sale by pharmacies of prescription-only medicinal products for human use, constitutes a measure having equivalent effect to a quantitative restriction on imports, within the meaning of [Article 34 TFEU], since that legislation has a greater impact on the sale of prescription-only medicinal products by pharmacies established in other Member States than on the sale of the same medicinal products by pharmacies established within the national territory” and that “[such a measure] cannot be justified on grounds of the protection of health and life of humans, within the meaning of [Article 36 TFEU], inasmuch as that legislation is not appropriate for attaining the objectives pursued.”
- The Relevance of the Decision Rendered in C-148/15 for the Romanian Market and Practice
Aa a matter of principle, an interpretative decision of the Court of Justice of the European Union (such as that rendered in case C-148/15) is mandatory not only before the national court that addressed the preliminary questions, but for all other national courts across the European Union confronted with similar cases.
On the other hand, this case should be seen through the prism of the fact that the solutions found by the Member States with concern to the fixing of prices for the prescription-only drugs for human use have, since the very first stages of their implementation, been contested, and the relevant markets have been continuously marred by scandals, corruption and price arrangements.
In this context, the considerations offered by the CJEU in C-148/15 are more so important for the Romanian practice as our national legal framework contains provision which are similar, at least in the purpose, with the German law under scrutiny. Thus, inasmuch as the relevant Romanian legal
 Para. 40.
 Relevant in this regard is the very recent scandal that is currently rattling the Greek drugs market and political environment, where a giant Swiss drugmaker is accused of having bribed thousands of state officials and doctors in order to get a preferential fixing of prices. The case is seen as “critical” since Greece appears to be the “reference country” for drug pricing in 29 countries of the world – whence a possible distortion of competition in all these other countries! More details on this may be found at https://www.euractiv.com/section/health-consumers/news/pharma-scandal-whips-up-political-storm-in-greek-opposition-ranks/ (last visited February 7, 2018).
 See for ex. article 851 from Law 95/2006 on the reform in the health sector (as republished in the Official Gazette of Romania, Part I, No.652 of 28.08.2015 and subsequently amended) according to which “the Ministry of Public Health sets, endorses and approves, by a Minister’s order, the relevant maximum threshold for the prices of prescription-only medicinal products for human use bearing a marketing authorization for Romania.” Based on this norm, the Ministry of Health has issued several orders, the last one being Order No.368/2017 for
provisions are considered to be discriminating in favour of domestic (or traditional) pharmacies and against foreign (or online) ones by for example preventing the former, in one way or another, from offering more competitive prices than the first due to some considerations which cannot accurately fall within the ambit of Article 36 TFEU, such provisions could be successfully challenged before the competent national courts for infringing the primary law of the European Union.