C-266/87

2. These two sets of preliminary questions from the Court of Appeal require the Court to consider once again 'parallel' imports of Once obtained, the PL(PI) licence auth­ medicinal products. 1 orizes its holder to import and market the product concerned in the territory of the 6 1 Original language French. United Kingdom. I — Sec in particular the judgments of 29 February 1968 m Case 24/67 Parke, Dami & Co. v Centrafarm [1968] ECR 55, of 31 October 1974 in Case 15/74 Centra/arm v Sterling Dryg [1974] ECR 1147, of 31 October 1974 in Case 16/74 Centra/arm v Winthrop [1974] ECR 1183, of 20 May 1976 in Case 104/75 de Peijper [1976] ECR 613, 4. I will point out immediately that the of 23 May 1978 in Case 102/77 Hoffmann-La Roche v dispute in the main proceedings has arisen Centrafarm [1978] ECR 1139, of 10 October 1978 in Case 3/78 Centrafarm v American Home Products Corporation from the situation where the PL(PI) product [1978] ECR 1823, of 14 July 1981 in Case 187/80 Merelt v Stephar and Exler (1981) ECR 2063 and of 3 December 1981 in Case 1/81 Pfizerv Eunm-Pharm [1981] ECR 2913 2 — Cited above in footnote 1

OPINION OF MR DARMON—JOINED CASES 266 AND 267/87

6. In order to explain clearly all the aspects of the dispute, I should point out first of all that, according to the Court's judgment in Centrafarm v American Home Products Corporation (hereinafter referred to as 9. Before the adoption of the contested 5 'American Home Products'), the registering measures, the volume of trade in PL(PI) in two Member States of two different trade products had become considerable because marks in respect of the same product is not pharmacists were supplying them proprio in itself contrary to the Treaty. Therefore, motu even if they bore a different trade the proprietor of a trade mark may prevent mark and even when they had received a an unauthorized third party from affixing to prescription prescribing the United a product lawfully bearing one of the trade Kingdom brand. The reason for this was marks the other mark concerned. However, simple: since he is reimbursed on the basis the Court expressed a reservation with of the scale laid down for the national regard to the case where two trade marks product, the pharmacist obtains a substantial are registered with the intention of parti­ profit, which encourages 'substitution'. 6 Itis tioning markets. the prohibition of such 'substitution' that the Association of Pharmaceutical Importers (API), an association of parallel importers, has challenged before the national court in order to obtain a declaration that it is a 7. I should explain next that British doctors measure having equivalent effect within the generally prescribe products using a name meaning of Article 30 of the Treaty. 3 — Paragraphs 1.4.(ii) and (iv). 4 — Statement of 12 July 1986 confirmed by a letter of 12 6 — I use this term in my opinion for the sake of convenience. August 1986 rejecting a request to revoke that statement. To my mind, it is clear that such usage does not reflect any 5 — C ted reservations about the equivalence between the prescribed i above in footnote 1, paragraphs 15, 20, 21 and 22. product and the product supplied in such a case.

11. The first United Kingdom court before The Pharmaceutical Society therefore which the contested measures were brought constitutes a professional body having as its considered that they did not constitute rules task the provision of a public service which contrary to Article 30. It is now for the it performs in the public interest. The Court to state the criteria which will enable compulsory nature of admission to its the Court of Appeal to uphold or invalidate register and its disciplinary powers are that view. characteristic of rights and powers derogating from the generally applicable rules of law. Such rights and powers are radically different from those of ordinary 12. In order to assist the Court in that task, private bodies. I will not adhere strictly to the order of the questions adopted by the Court of Appeal. In my view, it is necessary to examine first of all whether the statement of the Pharma­ ceutical Society, which was later confirmed, 15. In order to dispel any doubt, I would constitutes, having regard to the nature of point out that the Court has held that the that body, a measure of the kind prohibited conduct of a local authority, 7 legally by Article 30 of the Treaty. distinct from the State in municipal law, and even the conduct of a body constituted under private law, supported by the State, may be attributed to the State for the 13. The Pharmaceutical Society was created purposes of the application of Article 30. 8It by a Royal Charter in 1843. It maintains a is not therefore the legal nature of the Phar­ register on which a pharmacist must be maceutical Society which would be entered in order to be able to practise. It sufficient to prevent its actions from being may bring disciplinary proceedings, which classified as 'public measures' 9 and may result in fines, suspensions or even therefore to remove them from the scope of removal from the register. Appeals against Article 30 if their effects on intra- such decisions are brought before the High Community trade infringed the prohibition Court of Justice. The pursuit of the phar­ laid down in that provision. macist's profession is based on the obser­ vation of professional rules, in particular a code of ethics of which the statement in question is an illustration. 16. With that difficulty resolved, let us go on to consider the provisions in question in the light of the prohibition of measures 14. In my view, three essential features having equivalent effect. It is complained must be emphasized: that the rule against substitution excludes from the market imported products which

17. The first point to be made here is that if there were no such rules, purchases of if the list in question was drawn up in a PL(PI) products by pharmacists would non-discriminatory manner as regards probably increase, as the situation prior to imported products. 1986 shows. However, is it automatically to be assumed, on the basis of a reading of the 10 Court's judgment in Dassonville, that the measures in question must be considered 19. Let me say right away that, considered contrary to Article 30? Upon a closer in the light of that case-law, the contested analysis of the situation, I firmly reject that measures are not, in my view, to be view. Let us consider for that purpose first regarded as constituting a barrier to trade. of all the judgments of the Court which seem to me to be the most relevant in this regard. 20. The Divisional Court considered that the measures involved in this case expressed 'the normal rule of commerce'. The appellants in the main proceedings and the 11 Commission challenge that view; they argue 18. In its judgment in Blesgen the Court that the rule that the supplier must supply held that the prohibition on the sale of what has been ordered is irrelevant in this spirits of an alcoholic strength exceeding context; the market in medicinal products is 22° in drink-retailing establishments was quite special; doctors are not independent not incompatible with Article 30. It stated economic agents, since they are governed by that such a measure, applicable to national public law and are not subject to and imported products alike, had no commercial necessities. connection with imports and, for that reason, was not of such an nature as to impede trade between Member States. More 12 recently, in its judgment in Duphar, the 21. In my view, that argument is not in any Court held that a prohibition on reim­ way inconsistent with the proposition that bursing the costs of certain medicinal what the doctor prescribes must be supplied. products in order to maintain a balanced health-care budget, in a national context where most of the medicinal products consumed are imported, was not a measure 22. First of all, I think that it is not difficult to show that in an ordinary commercial transaction the principle pacta sunt servanda 10 — Judgment of 11 July 1974 in Case 8/74 Procureur du Roi v Dassonville [1974] ECR 837. cannot be considered to be a measure 11 — Judgment of 31 March 1982 in Case 175/81 Blesgen v having equivalent effect. This may be illus­ Belgium [1982] ECR 1211, in particular paragraphs at trated by a very simple example. Two 12 — Judgment of 7 February 1984 in Case 238/82 Duphar BV and Others v Netherlands [1984] ECR 525. 13 — Paragraph 20, my emphasis.

Member States in southern Europe each gation to prescribe a generic name in certain have a distinct make of vehicles whose cases) than is the judge's independence by ranges were, until quite recently, identical. the provisions of law determining the Let us suppose that car dealers in one of powers and duties of his office. That right those States fulfil orders for cars of the of choice must be compared with the sole national make by supplying identical right of choice that the patient may vehicles of the other State's make. This exercise: whether to have the products he would clearly stimulate imports. However, if has been prescribed supplied to him or not. such practices were brought before the The Treaty has no injurious effect on the courts, they would undoubtedly be declared conceptions which underly those rules and unlawful under the law of obligations. No which the Member States have sanctioned in one would imagine that the rule pacta sunt adopting such arrangements. In that regard, servanda could be declared contrary to the Commission's argument suggesting that Article 30. It would simply be a matter of under the normal rule of commerce the drawing the inferences from the customers' patient may accept a product different from choices. However, the volume of imports the one prescribed must be rejected. It would vary, depending on whether or not ignores the fact that, in the national the contractual principles were observed. systems, a medicinal product is obtained Yet clearly those principles are in themselves upon the decision of the doctor alone. unconnected with the imports. Although the patient may tell the doctor of his preferences and apprehensions, it is the doctor alone who finally takes the decision on his own responsibility. I am surprised that at the hearing distinctions were drawn according to whether a medicinal product is to be supplied under the NHS or as a part of private treatment. The unicity of ethical 23. Although doctors, as such, are not rules cannot be severed according to the economic agents or consumers, their writing manner in which the financial costs are of prescriptions, unlike the individual borne. Could one imagine the lawyer's duty choices of consumers, involves personal and to maintain professional confidentiality ethical responsibility which in some cases varying in strictness depending on whether may lead to judicial sanctions. That fact, far or not his fees are covered by legal aid? from weakening the comparison with the private consumer, reinforces it. At issue here are the rules for ensuring that doctors' decisions are respected.

compliance with that choice is itself it is for the API to take steps, where contrary to the Treaty. necessary, to ensure that they are observed both as regards the products — taking action against any abuses of trade-mark rights — and as regards the context of pre­ scriptions— taking action against possible 26. As it stands at present, Community law obstacles to advertising, for example. But cannot deprive the Member States of their because the concept of a measure having powers relating to the definition of the roles equivalent effect supposes that such a of professional persons providing health measure in itself restricts imports, Article 30 care. The effect of the national rules certainly cannot be called on in order to described above is that the consumption of obtain a change in the rules applicable to medicinal products obtainable on pre­ the dispensing of prescriptions. The scription — and therefore pharmacists' postman, it is said, is not responsible for bad demand for them — is determined by news. I therefore consider that the contested decisions taken by doctors. That is why the measures constitute 'the ancillary links in pharmaceutical companies' extensive efforts the chain', to repeat an expression used at to provide and distribute information and the hearing. the campaigns to increase the awareness of social security institutions in order to try to rationalize expenditure on health care are directed at the medical profession. The peculiar standpoint adopted by the API 28. As regards the rules in question, I firmly therefore appears to be this: since the pre­ maintain that the only requirement which scribing of PL(PI) products by doctors is Community law must impose here is that insufficient, the rules of the game must be the rules applicable to the dispensing of changed by giving pharmacists the possi­ medical prescriptions must be absolutely bility of 'interpreting' prescriptions. Now, neutral, regardless of the product whilst that possibility may, in the British prescribed. If this is the case, as in this context, stimulate imports, it seems wrong instance, the prohibition of 'substitution' to me to deduce from it a contrario that compliance with prescriptions itself creates a restriction incompatible with Article 30. However, that is the deduction which the API invites the Court to make. 'cannot in itself be regarded as constituting a restriction on the freedom to import 1 guaranteed by Article 30 of the Treaty'. 4

have shown that this is not the position in 34. As regards the patient's agreeing to the case of the contested measures now 'substitution', I would point out that such an under consideration. arrangement would be very formalistic and would take no account of the specific situation of the patient who in most cases is not able to appreciate the significance of 30. If the Court decides to adopt the view I such consent when faced with a pharmacist, have proposed, it will not have to consider a professional person, who is urging him to whether the measures at issue may possibly accept a brand different from that be justified under Article 36. prescribed by his doctor. Moreover, and most important of all, I think that it would be dangerous to open by implication the way to a situation where the substantial 31. For my part, I will be brief on this profit resulting from 'substitution' alone point, in view of the very clear arguments would be the pharmacists' main motive for which seem to me to preclude the contested bringing it about. measures from being regarded as contrary to Article 30. If, however, the Court should consider that they are contrary to Article 30, could it regard them as justified on the 35. The second possibility would amount to grounds of the protection of public health introducing a presumption of an 'alternative' or the protection of industrial and prescription for the PL(PI) product which commercial property? the doctor could rebut by crossing out the relevant words or letters printed on the prescription form. The formal responsibility of the practitioner would thus be formally 32. In my view, there can be no doubt that respected. a precise definition of the doctor's and pharmacist's roles represents a guarantee for the patient. Faithfulness in dispensing a prescription is the corollary of the doctor's 36. At this juncture I must raise two queries responsibility and no doubt the patient's designed to warn against the disadvantages confidence in the treatment prescribed by of such a solution, which to my mind is him largely depends upon it. More more appealing than convincing. particularly, it cannot be ruled out that the loss of the 'placebo effect' or the presence of the 'anxiety factor' give rise to risks which the prohibition of 'substitution' is 37. The first is prompted by the obser­ intended to prevent. vations of the United Kingdom: would not the position in which PL(PI) products would thus be placed prove to be discrimi­ natory in relation to that of other products, 33. The Commission, however, contends perhaps imported directly, that are strictly that other, less restrictive, means could equivalent? safeguard the aims in question. It mentions the possibility of obtaining the patient's agreement to 'substitution' or of providing information to the patient and, secondly, 38. The second is my own: can we treat as the introduction of prescription forms all a matter of no account how such a bearing the letters 'PL(PI)' which the doctor 'presumption' would be viewed in medical could cross out if he wished. ethics? In my opinion, the establishment by

'this guarantee of origin means that only the proprietor may confer an identity upon the 1 39. Finally, it remains to consider whether product by affixing the mark. 8 the prohibition of substitution is justified by the protection of trade-mark rights in the event (which was discussed in these The Court went on to state that: proceedings) that trade-mark rights would be contravened under national law if a product bearing a trade mark different from 'The right granted to the proprietor to that prescribed by the doctor was supplied. prohibit any unauthorized affixing of his mark to his product accordingly comes within the specific subject-matter of the 19 trade mark'. 40. The Court takes the view that the exercise of rights which national law confers on the proprietor of a trade mark in order 41. If a prescription for product A is to protect its 'specific subject-matter' is not dispensed by the supply of product B, the contrary to Community law. In its judgment economic interests of the proprietor of trade in American Home Products 15 the Court mark A will certainly be affected. However, stated that if product B is supplied under trade mark B without having been relabelled so as to bear trade mark A, the exclusive right to use the latter trade mark is not called in question at all. ' ... the specific subject-matter is in particular the guarantee to the proprietor of the trade mark that he has the exclusive right to use that trade mark for the purpose 42. In other words, if the 'substitution' of of putting a product into circulation for the products is not accompanied by any physical first time and therefore his protection operation whereby a third party has usurped against competitors wishing to take advantage of the status and reputation of 16 — Paragraph 11, my emphasis. 17 — Paragraph 12. 18 — Paragraph 13, my emphasis. 15 — Cited above, footnote 1. 19 — Paragraph 17.

43. Although I do not believe that I need dwell any longer on this aspect of the case, I would simply point out that the argument calling on the protection of trade-mark rights as justification for the measure in 46. However, as I have said, it is in question, in the event that the Court should trade-mark rights that the real difficulty lies. consider the measure contrary to Article 30, The Commission, which has devoted more would give the 'prescribed' brand an undue than half of its observations to this subject, competitive advantage. tells the Court that if the possibilities of relabelling were open to parallel importers, the problems of this case would be resolved. It also invites the Court to clarify its judgment in American Home Products as regards the question whether the exercise of 44. I indicated earlier what was essentially trade-mark rights, and more precisely the at stake in the problem submitted to the registering of two different trade marks in Court. Nevertheless, I am fully aware of the respect of the same product, is contrary to risks entailed in the prescribing by Community law if it leads to the parti­ doctors — and therefore the actual tioning of markets, or whether it is importation — of parallel products. The necessary for such an effect to be intended, difficulty is quite clearly this: does as that judgment appears to suggest. Community law include requirements other than formal equality of access to the market in the case of products such as those covered by a PL(PI) licence? 47. Having regard to the terms of the 20 — Case 3/78 Centra/arm v American Home Products, cited above, paragraph 15. reference now before it, the Court clearly