C-238/82

In Case 2 3 8 / 8 2

R E F E R E N C E to the C o u r t u n d e r Article 177 of the E E C T r e a t y by the President of the Arrondissementsrechtbank [District C o u r t ] , T h e H a g u e , for a preliminary ruling in the proceedings pending before that court between

DUPHAR BV AND OTHERS

and

T H E NETHERLANDS STATE, in the person of the Minister van V o l k s g e z o n d h e i d en Milieuhygiëne [Minister of H e a l t h and the Environment]

DUPHAR ν NETHERLANDS

Facts and Issues

The facts of the case, the course of the lands Minister for Health and the procedure and the written observations Environment issued on 22 July 1982 the submitted pursuant to Article 20 of the Besluit Farmaceutische Hulp Zieken­ Protocol on the Statute of the Court of fondsverzekering [Sickness Insurance Justice of the European Economic Fund (Provision of Medicinal Prep­ Community may be summarized as arations) Order], That order contains a follows: list of medicinal preparations and medical dressings which may not be supplied to persons under the sickness I — Facts and written procedure insurance scheme or may be supplied to them only if certain conditions are Facts satisfied.

In order to enable savings to be made in The order prohibits the supply of certain the supply of medicinal preparations medicinal preparations and medical charged to the Ziekenfondsverzekering dressings to persons insured under the [sickness insurance fund], the Nether­ sickness insurance scheme, namely:

JUDGMENT OF 7. 2. 1984 — CASE 238/82

The applicable Netherlands legislation In view of considerable deficits in the budgets of the sickness funds the The legal basis of the order is Article 10 government decided to reorganize the of the Verstrekkingenbesluit Zieken- system of benefits and to alter the list of fondsverzekering [Sickness Insurance medicinal preparations which may be Fund (Supply) Order]. By virtue of that supplied by means of the contested article, the Minister for Public Health order. may decide: It appears from the documents before the (a) that certain medicinal preparations Court that, of the medicinal preparations and medicinal dressings specified by manufactured in the Netherlands, ap- him may not be supplied; proximately 20% are consumed in the Netherlands, and approximately 80% are (b) what medicinal preparations may be exported, about half of them to other supplied only subject to certain Member States of the EEC. conditions determined by him. Roughly 80% of the medicinal prep- arations consumed in the Netherlands The Verstrekkingenbesluit Ziekenfonds- are imported, most of them from other verzekering is based on the Zieken- Member States of the EEC. fondswet [Law on the Sickness Fund]. That law lays down the rules applicable to compulsory sickness insurance for Of the medicinal preparations consumed certain categories of persons. Those in the Netherlands, at least 7 0 % are persons are entitled to benefits (in kind) supplied under the sickness insurance for the purpose of medical treatment. scheme.

DUPHAR ν NETHERLANDS

JUDGMENT OF 7. 2. 1984 — CASE 238/82

Treaty, be construed as meaning Dassonville [1974] ECR 837, Joined that those provisions have direct Cases 88 to 90/75 SADAM [1976] ECR effect? 323 and Case 82/77 Van Tiggele [1978] ECR 25). The prohibition contained in (e) If so, must those provisions be Article 30 of the Treaty also applies to measures which, although not restricting construed as set out above?" the freedom to import, unilaterally hinder in any way sales on the national market. A measure adopted by the In accordance with Article 20 of the national authorities which withholds Protocol on the Statute of the Court of from persons insured under the sickness Justice of the EEC, written observations insurance scheme — who account for were submitted by the plaintiffs in the more than 70% of consumption — main proceedings, represented by W. entitlement to the supply of a specifically Alexander and B. H. Ter Kuile, of the listed medicinal product coming from Bar of The Hague, by the Netherlands another Member State, certainly falls State, represented by F. Italianer, within the prohibition laid down in Secretary General, Ministry of Foreign Article 30 of the Treaty. Such a measure Affairs, acting as Agent, by the Danish does not escape that prohibition merely Government, represented by L. Mi- because an identical measure has been kaelsen, Legal Adviser, acting as Agent, adopted regarding a proprietary med- by the Italian Government, represented icinal preparation of national origin, by O. Fiumara, Avvocato dello Stato, even if the two measures derive from a acting as Agent, and by the Commission single decision and were both adopted of the European Communities, rep- on the basis of the same objective resented by R. Wägenbaur, Legal criteria. Adviser, acting as Agent, assisted by T. van Rijn, a member of its Legal Department. As regards the "rule of reason", it is laid down in the decisions of the Court that Upon hearing the report of the Judge- obstacles to intra-Community trade Rapporteur and the views of the may be permitted where the following Advocate General, the Court decided to conditions are satisfied: open the oral procedure without any preparatory inquiry. (1) no Community rules exist;

According to the plaintiffs in the main As regards the incompatibility of the proceedings the withholding of insured order with Article 34, the plaintiffs in the persons' entitlement to the medicinal main proceedings are of the opinion that preparations listed in Annex 1 to the the order may directly or indirectly order is not made necessary by hinder the export of medicinal mandatory requirements relating to the preparations from the Netherlands. The protection of public health or other medicinal preparations listed in Annexes matters referred to above. The protection 1 and 4 to the order are, in the opinion of public health is not assured since the of the Netherlands authorities, to be physician issuing the prescription is regarded as too expensive and must not denied in advance any possibility of be prescribed or else must be prescribed considering either the price or the benefit only to a limited extent for pharmaco- when choosing a medicinal preparation therapeutic reasons. Those medicinal

Control of Even though Article 3 (1) of the order those costs is an integral part of short- does not totally withhold the right to be term economic policy and cannot justify supplied with the medicinal preparations departure from the principle of the free listed in Annex 4, it imposes very strict movement of goods within the common conditions upon that right. It should market (Cases 88 to 90/75 SADAM, however be noted that the prohibition contained in Article 30 of the Treaty still cited above). applies even if the national measure provides for the possibility of exemptions Savings regarding the supply of phar and in fact such exemptions are freely maceutical products to persons insured granted (Case 82/77 Van Tiggele [1978] under the sickness insurance scheme may ECR 25 and Case 130/80 Kelderman be achieved by the adoption of measures [1981] ECR 527). which restrict intra-Community trade to

With regard to the second question, the plaintiffs in the main proceedings are of the opinion that the question whether or As regards the fifth question, Com- not Article 5 of the Treaty has direct munity law must be interpreted as effect depends on the content and the meaning that the articles in question scope of the provisions of the Treaty or prevent a Member State from adopting, of the rules of secondary Community with a view to achieving savings re- law, on the basis of which Article 5 of garding the provision of pharmaceutical the Treaty is relied upon. The provisions products to persons insured under the of the two directives cited in the sickness insurance scheme, unilateral questions submitted for a preliminary provisions.disentitling insured persons to ruling fulfil the conditions which, the supply of specifically listed medicinal according to the Court of Justice, must products and medicinal dressings if the be satisfied if a provision of a directive is effect of the adoption of such provisions to have direct effect (Case 51/76 is directly or indirectly, actually or Verband van Nederlandse Ondernemingen potentially, to distort competition in the [1977] ECR 113). Consequently, Article common market and if those provisions 5 and the provisions of the directives in are capable of affecting trade between question have direct effect. Member States.

As regards the third question, the order The defendant in the main proceedings is manifestly in conflict with the spirit considers that the first question should of the Community provisions regarding be answered in the negative. The purpose medicinal preparations. The practical of Articles 30 and 34 is the creation of a consequence of the order is to suspend common market characterized not only the authorization to market the by the removal of barriers to trade medicinal preparations listed in Annexes between Member States but also by the 1 and 4 to the order. The prohibition normal functioning of the economy and laid down in the order regarding the genuine competition.

Therefore, it is not contrary to the constituting an infrigemcnt of Article 30 principle of the free movement of goods of the Treaty, the Netherlands Govern­ for an undertaking not to choose an ment is of the opinion that such an imported product (or a product manu­ infringement is justified. The purpose of factured in its own country) and to give the order in question is to ensure health preference to another product (likewise care of the highest possible standard, at imported or else manufactured in its own acceptable costs. Consequently, the country). Where there is real access to exception recognized in the case-law of the market, an undertaking has an the Court regarding the "rule of reason" opportunity to choose. By making its extends to the public interests involved in choice on the basis of objective criteria, this case. Alternatively, the Netherlands it ensures the genuine competition Government considers that it is possible sought by the Treaty and contributes to to rely upon the exception regarding the the functioning of the common market. protection of public health provided for in Article 36 of the Treaty. In such circumstances, economic de­ cisions of undertakings which are determined by practical and objective As regards the second and third considerations do not constitute questions, the purpose of the directives measures having an equivalent effect in question is to regulate the marketing within the meaning of Articles 30 and 34 of proprietary medicinal products. The of the Treaty. Such a decision may rules include the introduction of a system influence the volume of imports but is of authorizations and lay down criteria not thereby contrary to Article 30 of the relating to the composition and quality Treaty. of the products in question. The purpose of the contested order is different. It contains rules for the consumer as The contested order which lists the regards the list of available benefits and supplies available through the sickness embodies an economic decision taken by funds also of course has repercussions or for the benefit of an organization for the persons insured under the health operating within the economy. The care scheme. In fact, the order freedom to take such economic decisions determines the rights to which persons is not limited by the directives in insured under the scheme are entitled by question. Those directives certainly virtue of the insurance. Nevertheless, a contribute to defining the range of person insured under the health care products on offer from which that scheme still retains his freedom of action, organization may choose but, for the in so far as he wishes to act rest, it retains its freedom of choice. independently from the economic point of view. The order does not place any obstacle in the way of a person insured under the health care scheme who wishes In consequence, the directives and the to purchase an excluded product by order have different purposes and are paying the price asked for it. not in conflict.

The Netherlands Government takes the specific limits to which Member States view that, in the circumstances, the are subject when drawing up schemes for Court ought not to consider the direct the provision of assistance regarding the effect of the articles in question. supply of medicinal preparations. It follows, in particular, that the selection of preparations in respect of which As regards the fourth and fifth questions, assistance may be granted must not the Netherlands Government considers depend upon their origin. A public that Articles 85 and 86 of the Treaty are scheme for assistance with the provision not relevant to the assessment of the of medicinal products is not contrary to contested order in the light of Article 30 et seq. of the Treaty provided Community law. In fact, the order does that, in the selection of the proprietary not constitute an agreement between medicinal preparations in respect of undertakings affecting trade between which assistance may be granted, States and distorting competition within account is taken exclusively, on the basis

If the Court provided that the decision to include or nevertheless considers that it must also exclude a particular product from the examine the fourth question, the scheme is adopted in accordance with Netherlands Government defers entirely objective criteria and does not to the judgment of the Court regarding discriminate between national and the answer to be given to that question. imported products. Quantitative re- strictions on imports or exports and measures having an equivalent effect are In its observations the Danish prohibited in so far as they are discrim- Government points out in the first place inatory. The provisions at issue, despite that schemes for assistance with the having adverse effects on trade in the provision of medicinal products exist in products in question, affect national and several Member States, including imported products without distinction,

DUPHAR ν NETHERLANDS

proprietary medicinal preparations, but with law and that it falls within the fiel'd they impose no obligation with regard to of application of Article 30. the provisions by virtue of which States or other public bodies defray expenses in respect of benefits in kind supplied to In view of the high percentage (70%) their nationals, unless they are accounted for by the medicinal implemented in a manner which is found preparations prescribed within the to affect the marketing of such framework of the sickness insurance preparations. The measures in question scheme by comparison with the total do not supersede those governing the quantity of medicinal preparations sold authorizations for trade in such in the Netherlands, and by reason of the products, even though they might affect fact that roughly 80% of all the the volume of the product marketed. medicinal products sold in the Even if a product does not appear on the Netherlands are imported, there can be list, it remains on the market and is sold, no doubt that the order in question albeit to a lesser extent, to persons not restricts imports. Consequently, the affected by its exclusion from sickness Commission considers that the order insurance schemes. constitutes a measure having an effect equivalent to a quantitative restriction.

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Moreover, ought to be permissible under Article 30, fulfilment of the obligation does not it considers that the order in question, require any legal measure to be adopted which is intended exclusively to improve by the Member States or the Community the financial management of a public institutions. Those articles satisfy all the sickness insurance scheme, may be conditions laid down in the decisions of regarded as compatible with Article 30 the Court which must be satisfied if a even if it affects trade. The measure provision of Community law is to have applies objectively to medicinal products direct effect (Case 41/74 Van Duyn manufactured in the Netherlands and [1974] ECR 1337, Case 51/76 Verbond to imported medicinal products. The van Nederlandse Ondernemingen [1977] products are not treated differently ECR 113 and Case 38/77 Enka [1977] according to their origin. Moreover, no ECR 2203). measure has been adopted which is capable of directly affecting the The third question, in the Commission's marketing of the products, in the strict view, should be answered in the negative. sense of the word. The marketing of The order in question does not concern them remains totally unrestricted, so that access to the market. It in no way affects anyone may obtain the medicinal the freedom of producers to continue to preparations in question, if necessary on market the medicinal preparations the basis of a medical prescription. The appearing on the negative lists. restriction lies in the fact that the medicinal products appearing on the negative list are not supplied to persons With regard to the fourth and fifth insured under a health-care scheme questions, the Commission considers that within the framework of sickness Articles 3 (f) and 5 may be relied upon insurance.

The issue, the question of the interpretation Commission sees no reason for of Article 36 arises. The Commission is describing the order as constituting any of the opinion that the grounds of jus- of the foregoing. It considers the order

1 By order dated 16 September 1982, which was received at the Court on 29 September 1982, the President of the Arrondissementsrechtbank [District Court], The Hague, referred to the Court for a preliminary ruling under Artice 177 of the EEC Treaty several questions on the interpretation of A r t i c l e s 3 , 5 , 3 0 , 3 4 , 3 6 , 8 5 a n d 86 o f t h e T r e a t y a n d of Council Directive 65/65/ΕΕΟ of 26 January 1965 on the approximation of provisions laid down by law, regulation or administrative action relating to proprietary medicinal products (Official Journal, English Special Edition 1965-66, p 20) and of Council Directive 75/319/EEC of 20 May 1975 on the approxi­ mation of provisions laid down by law, regulation or administrative action relating to proprietary medicinal products (Official Journal 1975, L 147, p. 13), to enable it to decide whether certain national rules concerning the supply of medicinal preparations and dressings under a sickness insurance scheme were compatible with those provisions.

2 The questions were raised in an action brought against the Netherlands State by 23 pharmaceutical undertakings for the adoption of an interim decision declaring that Articles 2 and 3 of the Besluit Farmaceutische Hulp Ziekenfondsverzekering [Sickness Insurance Fund (Provision of Medicinal Preparations) Order] 1982 (Staatscourant N o 139 of 23 July 1982) and the annexes thereto were inoperative since they were incompatible with Community law and in particular with Articles 3, 5, 30, 34, 36, 85 and 86 of the Treaty and Directives 65/65 and 75/319, cited above

4 According to the explanatory memorandum to the order in question, the exclusion of products as a result of their being listed in the annexes thereto is justified by considerations relating specifically to each annex. The exclusion of the medical preparations listed in Annex 1 is based on their price and the fact that, in the view of the central medico-pharmaceutical committee, there are in each case other medicinal preparations which have the same thera- peutic effect but whose price is lower. The products listed in Annex 2 are excluded because they are over-the-counter products which can be marketed otherwise than through a pharmacist. The exclusion of the medicinal preparations listed in Annex 4 is justified by the fact that, in the view of the abovementioned central medico-pharmaceutical committee they must, for reasons described as being "of a pharmaco-therapeutical nature", be pre- scribed only in very specific cases.

5 Considering that the decision in the case turned on the interpretation of various rules of Community law, the President of the Arrondissementsrecht- bank referred the following questions to the Court for a preliminary ruling:

"(a) Must Community law, laid down in Articles 30, 34 and 36 of the EEC Treaty, be construed as meaning that those articles prevent a Member State from introducing, with a view to making savings in the field of the supply of medicinal preparations to persons insured under sickness insurance schemes, unilateral provisions under which insured persons are deprived of a right to be supplied with specific named medicinal preparations and dressings?

6 The first question seeks in substance to ascertain whether the prohibition of measures having an effect equivalent to quantitative restrictions on imports (Article 30) and on exports (Article 34) applies to measures (of the type described above) whereby a Member State, with a view to achieving economies regarding compulsory health-care insurance, prevents specifically named medicinal preparations and dressings from being supplied to persons insured under the scheme. The national court also wishes to know whether, if that part of the question is answered in the affirmative, Article 36 of the Treaty allows an exception to that prohibition.

7 For the purpose of answering the first question, it is appropriate to consider how Articles 30, 34 and 36 of the Treaty are to be interpreted in relation to the particular features of the national legislation in question.

A — The interpretation of Articles 30 and 36 of the Treaty

8 The plaintiffs in the main proceedings propose that Article 30 should be interpreted as meaning that rules such as those with which this case is concerned constitute a measure having an effect equivalent to a quantitative restriction on imports because they restrict intra-Community trade and make it impossible for the suppliers of certain imported medicinal preparations to sell them on the market in question since the proportion of the total consumption of medicinal preparations charged to the sickness funds amounts to 70%.

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9 The plaintiffs in the main proceedings argue that such a measure does not escape the prohibition contained in Article 30 merely because it applies without distinction to national and imported products. According to previous decisions of the Court, even measures which apply without distinction to national products and those imported from other Member States but give rise to obstacles to intra-Community trade do not escape the prohibition of measures having equivalent effect unless :

DUPHAR ν NETHERLANDS

1 1 The Netherlands State, the defendant in the main proceedings, submits that the prohibition contained in Article 30 cannot extend to measures of the type with which the main proceedings are concerned. It considers in the first place that there is no question of any obstacle to intra-Community trade. Where a public authority finances by far the greater part of the consumption of medicinal preparations and other health-care products, it is in the position of an economic operator and accordingly is, like any other such operator, entitled to make a choice and to choose among the preparations on the market, giving preference to one rather than to another. Where, as in this case, the national authority made its decision on the basis of objective considerations inspired by the concern to safeguard the quality of the care, there can be no question of obstacles to trade between Member States.

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The products are not treated differently according to their origin. Moreover, no measure capable of directly affecting the marketing of the products in the strict sense has been adopted. Such marketing remains wholly unrestricted, so that anyone can obtain the medicinal preparations in question, if necessary on the basis of a prescription. However, if the Court should decide that the contested measures are incompatible with Article 30 of the Treaty, the Commission considers that the grounds of justification set out in Article 36 do not apply in this case.

1 4 The Danish Government observes that it does not consider 'national rules which, for social reasons and on the basis of objective criteria, provide for a public scheme for assistance with the provision of pharmaceutical preparations is contrary to Article 30 et seq. of the Treaty, provided that, in the selection of the proprietary medicinal preparations in respect of which assistance may be granted, account is taken exclusively, on the basis of an objective and fair assessment, of their therapeutic value and of the expenses incurred for normal and necessary medical treatment.

15 In order to determine the scope of the prohibition contained in Article 30 of the Treaty in relation to national measures of the type in question, it should, in the first place, be noted that the rules whose compatibility with national law is to be considered by the national court display the particular feature that, in principle, they provide for reimbursement, to a substantial percentage of the population, of the price paid for all medicinal preparations which may be prescribed to patients by an approved doctor. In that respect they are different from the legislation of other Member States which draw up a restrictive list of the medicinal preparations or like products in respect of which reimbursement is permitted. That is why the Netherlands rules, with a view to attaining their objective of reducing costs, set out limitative lists excluding preparations.

19 In that connection it should be borne in mind that 80% of the medicinal preparations consumed in the Netherlands are imported and that the pro­ portion thereof charged to the public insurance schemes amounts in all to 70°/o It follows that, where reimbursement by the insurance authority is excluded in respect of a medicinal preparation, purchases of that preparation fall and consequently there is a risk that the preparation in question will be totally eliminated from the national market.

20 However, in view of the special nature, in that respect, of the trade in phar­ maceutical products, namely the fact that social security institutions are sub­ stituted for consumers as regards responsibility for the payment of medical expenses, legislation of the type in question cannot in itself be regarded as constituting a restriction on the freedom to import guaranteed by Article 30 of the Treaty if certain conditions are satisfied.

21 In that regard it must be stressed that for such legislation to be in conformity with the Treaty the choice of the medicinal preparations to be excluded must

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be free of any discrimination to the detriment of imported medicinal preparations. T o that end, the exclusionary lists must be drawn up in accordance with objective criteria, without reference to the origin of the products, and must be verifiable by any importer. If those conditions are fulfilled, an importer may secure access to the Netherlands market provided that he is in a position to market a product which, whilst having the same therapeutic value, offers a price advantage over some other product available on the market. Such rules would in no way detract from the freedom to market any product meeting that requirement, which relates not to the nature of the product but only to its price.

DUPHAR ν NETHERLANDS

Β — The interpretation of Article 34 of the Treaty

24 The first question also seeks to ascertain whether Article 34 of the Treaty must be interpreted as meaning that it precludes national rules of the type in question. The plaintiffs in the main proceedings maintain that the contested order constitutes a measure having an effect equivalent to a quantitative restriction on exports within the meaning of that article.

25 As the Court has already stated in its judgment of 8 November 1979 (Case 15/79 Groenveld [1979] ECR 3409), Article 34 concerns national measures which have as their specific object or effect the restriction of patterns of exports and thereby the establishment of a difference in treatment between the domestic trade of a Member State and its export trade in such a way as to provide a particular advantage for national production or for the domestic market of the State in question.

26 That part of the first question must therefore be answered in the negative.

II — T h e second and third questions

Costs

31 The costs incurred by the Government of the Kingdom of Denmark, the Government of the Italian Republic and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. As these proceedings are, so far as the parties to the main proceedings are concerned, in the nature of a step in the matter for that court, the decision on costs is a matter for that court.

On those grounds,

THE COURT

in reply to the questions submitted to it by the President of the Arron- dissementsrechtbank, The Hague, by order of 16 December 1982, hereby rules:

1. Provisions adopted within the framework of a compulsory national health-care scheme with the object of refusing insured persons the right to be supplied, at the expense of the insurance institution, with specifically named medicinal preparations are compatible with Article 30 of the Treaty if the determination of the excluded medicinal preparations involves no discrimination regarding the origin of the

Mertens de Wilmars Koopmans Bahlmann

Galmot Pescatore Mackenzie Stuart O'Keeffe

Bosco Due Everling Kakouris

Delivered in open court in Luxembourg on 7 February 1984.

P. Heim J. Mertens de Wilmars Registrar President