C-229/00

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4. Article 2 of the Directive provides that: price proposed by the applicant, the decision shall contain a statement of reasons based on objective and verifi- able criteria. In addition, the applicant shall be informed of the remedies available to him under the laws in 'The following provisions shall apply if the force and the time-limits allowed for marketing of a medicinal product is per- applying for such remedies. mitted only after the competent authorities of the Member State concerned have approved the price of the product: ...'

COMMISSION v FINLAND

competent authorities have agreed the upon objective and verifiable criteria, price to be charged for the product including, if appropriate, any expert pursuant to Article 2, or where a opinions or recommendations on decision on the price of a medicinal which the decision is based. In addi- product and a decision on its inclusion tion, the applicant shall be informed of within the list of products covered by the remedies available to him under the the health insurance system are taken laws in force and of the time-limits after a single administrative procedure, allowed for applying for such remedies. the time-limit shall be extended for a further 90 days. The applicant shall furnish the competent authorities with adequate information. If the infor- mation supporting the application is inadequate, the time-limit shall be 3. Before the date referred to in suspended and the competent auth- Article 11(1), Member States shall orities shall forthwith notify the appli- publish in an appropriate publication cant of what detailed additional infor- and communicate to the Commission mation is required. the criteria which are to be taken into account by the competent authorities in deciding whether or not to include medicinal products on the lists.

Where a Member State does not permit an application to be made under this ...' article before the competent authorities have agreed the price to be charged for the product pursuant to Article 2, the Member State concerned shall ensure that the overall period of time taken by the two procedures does not exceed 180 days. This time-limit may be extended in accordance with Article 2 or suspended in accordance with the National law provisions of the preceding subpara- graph.

sequently became the Commission for or 100% of the remaining cost depending Medicine Prices (lääkekorvauslautakunta, on whether or not the active ingredient is then lääkkeiden hintalautakunta, here- patented. inafter 'the ministerial commission'), stat- ing a reasonable wholesale price which it undertakes to charge. If the ministerial commission agrees that the proposed price is reasonable, the product is automatically entered on the list of 'prescribable' prod- ucts which come under the ordinary scheme of insurance cover, under which 50% of the price, after deduction of a contribution 9. In order to come within either of those of FIM 50 payable by the patient, is special schemes the medicinal product must reimbursed. be included in a special list drawn up by the national institute of social security (Kans- aneläkelaitos, hereinafter 'the institute for social security'), pursuant to a decision (later called a 'decree') of the Finnish Council of Ministers. That decision will identify the serious illnesses which entitle 7. Pursuant to Articles 23 and 24 of Law chronic sufferers to higher-level cover of No 598/82 on administrative procedure the costs of medicines and the active (hallintomenettelylaki; hereinafter 'the law ingredients in respect of which reimburse- on administrative procedure'), a refusal to ment at a higher rate is, in principle, enter a medicine in the abovementioned list guaranteed. The decree is submitted in must be properly reasoned, with a clear draft form to the Council of Ministers by statement of the rights and obligations of the Ministry of Health on the basis of an the party concerned, the factors taken into opinion of the institute for social security consideration, and, in particular, the essen- and is normally adopted by the Council of tial factors and the legal provisions on Ministers without being put to a vote. which the decision is based. A refusal may be challenged before the Finnish adminis- trative courts, in particular before the Supreme Administrative Court (Korkein hallinto-oikeus).

15. Following the receipt of a complaint in April 1997 and on the basis of certain additional information obtained informally from the Finnish authorities, on 11 August 12. The decision of the institute for social 1997 the Commission addressed a request security adopting the final list is duly for clarification to Finland, observing that, published and is not open to challenge. from a preliminary examination of the national legislation, the procedure by which medicinal products are made subject to the higher-rate reimbursement scheme did not appear to comply with the con- ditions laid down by Article 6 of the Directive. 13. Final decisions on higher-rate reim- bursement are taken by the relevant local branch of the institute for social security in response to individual applications sub- mitted by patients with serious and chronic illnesses. Decisions must be reasoned and may be appealed. 16. The Finnish authorities replied on 10 October 1997, explaining how the Finnish system for reimbursement of the cost of medicines operates. Invoking the principle of subsidiarity, they maintained that defining the extent of special insurance cover was not a matter which fell within 14. The procedure thus outlined is not, the scope of the Directive, since it merely however, the only one which may lead to involved the exercise of legislative power higher-rate reimbursement of the costs of and was governed by considerations of medicines. In addition to identifying serious administrative law and health policy.

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19. In its reply of 20 July 1998, Finland acknowledged that the complaint of lack of reasoning was well-founded as regards 22. In the present action the Commission certain refusal decisions taken by the min- makes two complaints. First, Finland failed isterial commission concerning the ordi- to implement Article 6(1) and (2) of the nary reimbursement scheme, but submitted Directive as regards decisions establishing that the procedure had since been amended. certain special categories of higher-rate As for the remainder, Finland claimed that reimbursement of the cost of medicines. the procedure complied fully with the Second, it failed to comply with its obli- requirements laid down by Article 6 of gation under the Directive to give reasons the Directive. for decisions refusing to include medicines in the general positive list, omitting to inform applicants of sufficiently objective 3 — Unofficial translation. and verifiable criteria of assessment. I - 5734

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24. In particular, the Commission laments the fact that interested parties are given no opportunity to argue their point of view, either in the preparatory phase of the decree, or subsequently. No official and 26. Second, again according to the Com- transparent reply is given to applications mission, it is indisputable that defining the which interested parties address to the extent of the special scheme of higher-rate various institutions involved in the reimbursement falls squarely within the decision-making process. No particular scope of the Directive, which applies, as obligation to give reasons is provided for, has been seen, to 'any national measure, either for the inclusion of an active ingredi- whether laid down by law, regulation or ent in the relevant list or for its exclusion administrative action, to control the price from it. Finally, none of the documents or of medicinal products for human use or to measures relating to the definition of the restrict the range of medicinal products extent of the special scheme of higher-rate covered by their national health insurance reimbursement is subject to review by a systems' (Article 1). Therefore, even where court. national decisions on the prices of medi- cines must be adopted at Council of Ministers level, as happens in Finland, the relevant procedure should in all cases comply with the conditions laid down by 25. Furthermore, the Commission takes the Directive and in particular by Article 6. issue with the explanations advanced by the defendant government in the pre-liti- gation phase, in particular the assertion 4 — Paragraph 16.

29. But on closer scrutiny, adds the defend- 32. According to Finland, at no point in the ant, it is not in fact this or that paragraph pre-litigation phase did the Commission of Article 6, but the provision as a whole claim that the conditions laid down in that does not apply to the present case, Article 6(1) and (2) had been breached in because it merely addresses decisions on the the procedure whereby the institute for I - 5736

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social security amends the list of medicines it denies that those provisions are appli- which come under the special scheme of cable in this particular case because the reimbursement. That complaint was raised decree in question is regulatory in nature for the first time in the action before the and therefore falls within the scope of Court and so, according to the well-known Article 6(3). case-law of the Court on the point, 5 the plea is inadmissible.

37. Furthermore, I must record that the general and abstract nature which, accord- 35. I note, first, that Finland does not deny ing to Finland, the criteria referred to in that the Council of Ministers' decree fixing Article 6(3) have, is certainly not found in the list of active ingredients which come the decree by which the Council of Min- under the scheme of higher-rate cover was isters draws up the list of illnesses and passed at the conclusion of a procedure that active ingredients which come under the fails to comply with the requirements of special scheme of reimbursement, given Article 6(1) and (2) of the Directive. Instead that that list specifically names each illness and each active ingredient. It is, if anything, reflected in the law on health insurance, 5 — See, inter alia, Case C-365/97 Commission v Italy [1999] which provides that, in taking its decision, ECR I-7773, particularly paragraph 23, and Case C-191/95 the Council of Ministers must consider the Commission v Germany [1998] ECR I-5449, particularly paragraph 55. necessity, therapeutic efficacy and cost-ef-

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fectiveness of the treatment. It is therefore 40. It therefore follows that, notwithstand- to that legislative provision rather than to ing the fact that it is a piece of delegated the decree that Article 6(3) of the Directive legislation, the decree essentially contains a ought to apply. series of individual decisions on the inclu- sion of specific medicinal products in one of the national health insurance schemes. It cannot, therefore, be regarded as falling outside the scope of Article 6(1) and (2).

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(see the sixth recital of the preamble). It is 51. I wonder, however, what that worri- clear, in fact, that the higher the insurance some interference might consist of, given cover for a medicine, the greater the that neither Finland's political choices with inducement to the persons concerned to regard to social security, nor the current purchase the product, or have it purchased, organisation of its medical insurance preferring it to others of similar therapeutic scheme are in issue here. In particular, efficacy. neither the structuring of the scheme over several levels of insurance cover, nor the decision-making power of the Council of Ministers, nor the considerations governing the selection of illnesses for which curative medicines may attract higher-rate reim- bursement nor, finally, the criteria for including certain active ingredients in the higher-rate reimbursement scheme is in 49. It should be added that the interpre- issue. tation proposed by the Finnish Government risks encouraging the Member States to employ formal devices to evade the obli- gations imposed by the Directive. As the Commission has noted, in fact, with struc- tured schemes of assistance comprising several scales of reimbursement, States could achieve the paradoxical result of substantially circumventing the require- ments of the Directive while formally complying with it. Member States would 52. Finland was merely asked to ensure merely have to make provision for minimal that interested persons could apply for the or even symbolic reimbursement of medici- inclusion of medicines in the list of prod- nal products entered on a general list and ucts coming within the higher-rate reim- then set up 'special' lists for the medicinal bursement scheme, that decisions on such products properly covered by the health applications be given within the time-limits insurance scheme. laid down in Article 6(1) and, lastly, that in the case of negative decisions the require- ments to state reasons and to inform applicants of the possibility of appeal laid down by Article 6(2) are complied with.

II — The complaint concerning the state- Article 2(2), which applies where the auth- ment of reasons on which refusal decisions orities' approval of the proposed wholesale are based price of a medicine is a precondition of marketing it. In the application, by contrast, the Commission makes no express reference to Article 2(2) of the Directive 54. The Commission's second complaint is and asserts that the law and administrative focused on an alleged failure to state practice in Finland do not comply with reasons in the decisions whereby the min- Article 6 of the Directive. isterial commission refuses to approve wholesale prices proposed by the persons who market, or intend to market, medi- cines in Finland. The Commission contends that that is a breach of the part of the Directive which imposes an obligation to give precise reasons for '[a]ny decision not 57. As regards the substance of this com- to include a medicinal product in the list of plaint, Finland objects that, whilst in the products covered by the health insurance letter of formal complaint and in the system', and provides, in particular, that reasoned opinion the Commission merely such decisions should contain 'a statement charged it with certain shortcomings, of reasons based upon objective and verifi- which Finland does not dispute, in its able criteria' (Article 6(2)). administrative practices in connection with certain specific decisions of the ministerial commission, in the application the Com- mission makes the more fundamental com- plaint that the Finnish legislation which (a) Admissibility governs the obligation to state reasons for the decisions in question is inadequate.

cation must correspond to the changes cedure by which the ministerial commis- made in the pre-litigation phase. 9How- sion assesses the fairness of proposed prices ever, as the Court has clarified, 'that for the purposes of bringing medicines requirement cannot be carried so far as to within the health insurance scheme. mean that in every case the statement of complaints in the letter of formal notice, the operative part of the reasoned opinion and the form of order sought in the application must be exactly the same, where the subject-matter of the proceedings has not been extended or altered'. 10 61. The fact that the defendant government was not misled by imprecise references to the legislation is confirmed, moreover, by the defences it put forward during the pre-litigation phase inasmuch as it asserted that it had taken certain steps to ensure that the commission observes the proper form when taking decisions on prices. That 59. In my opinion, the course of the pre- demonstrates in my opinion that, as regards litigation procedure in the present case this aspect, the subject-matter of the dis- proves that, notwithstanding that the Com- pute was clear from the start and cannot be mission complained of infringement of first said to have changed as a result of the one, and then another, different provision commission's legal (re)characterisation of of the Directive in relation to the same the case in the application. aspect of the Finnish legal system, Finland nevertheless has had the 'opportunity... to comply with its obligations under Commu- nity law and... to avail itself of its right to defend itself against the complaints' made against it. 62. However, it remains to be considered whether the plea of inadmissibility is never- theless well founded in the other respects mentioned, that is to say inasmuch as the Commission's complaint, initially limited to certain consequences of Finnish adminis- trative practice, was subsequently extended in the application to include the relevant 60. The defendant, in fact, was perfectly legislative provisions. well aware from the beginning which national procedure was the subject of the Commission's complaint. It was clear to the defendant government that the Com- mission's criticisms focused on the pro-

formal notice and in the reasoned opinion ment of reasons than the Finnish legis- reference is made solely to administrative lation'. In particular, the Commission practice, in the operative part of the latter, mentions two decisions of the ministerial Finland is instead charged with failing to commission, subsequently overturned by adopt 'the laws, regulations and adminis- the Supreme Administrative Court for fail- trative provisions necessary to comply with ure to state reasons. the Directive', and consequently with fail- ing to fulfil its obligations under the Directive and — in the version notified in the Swedish language — that that failure concerned, in particular, negative decisions 'concerning prices'. 66. In challenging the allegation, Finland points out that, pursuant to Articles 23 and 24 of the law on administrative procedure, any administrative decision must be properly reasoned, with a clear statement 64. It may, therefore, be considered that of the rights and obligations of the party already by that stage the complaint had concerned, the factors taken into consider- been extended, albeit with many ambi- ation and the legal provisions on which the guities, to include the overall consistency of decision is based. From the express word- Finnish law with the Directive. I do not, ing of those provisions it is to be inferred however, consider it necessary to attempt that the extent of the obligation to state to resolve that ambiguity because of what I reasons is to be determined by reference to shall now say about the substance of the the specific rules governing the relevant application. administrative procedure, and therefore, in the present case, to the law on health insurance and the decree relating to the Commission for Medicine Prices. Those specific provisions, besides expressly stat- ing certain factors which the ministerial commission must take into consideration (b) Substance when agreeing a reasonable wholesale price, also state the factors and parameters that must form the basis of any application. Thus, the statement of reasons for the ministerial commission's decision must be based on those same factors and par- ameters. 65. As I have said, essentially on the basis of certain effects of administrative practice in Finland, the Commission claims that that State has failed to ensure that the compet- ent authorities are required to give reasons for their own negative decisions in such a way as to comply with the relevant provi- sions of the Directive 'inasmuch as those 67. In support of those conclusions, the provisions require a more detailed state- defendant government invokes the explana-

71. In the present case, however, it seems 68. Lastly, Finland concludes that the fact to me that the Commission is attempting to that the Supreme Administrative Court set base its complaint on certain allegations aside certain decisions of the ministerial which fail to meet the requisite standard of commission for failure to state reasons, proof. remitting them to the commission for fresh determination, far from proving the inad- equacy of the relevant Finnish legislation, as the applicant claims, merely proves that in those particular cases the statement of reasons was inadequate as a matter of both 72. It starts off from a hypothetical prop- Community law and Finnish law. That is osition, asserting that a comparison especially so given that, as regards the two between the Directive and the applicable specific cases mentioned by the applicant, national provisions 'seems to indicate' that following the judgment of the Supreme the latter do not require the ministerial Administrative Court, the ministerial com- commission to give sufficiently detailed mission did in fact provide a proper reasons for its decisions on medicine prices. statement of reasons for its own refusal To illustrate that proposition, however, the decisions. Commission merely points to a very small number of refusal decisions of the minis- terial commission for which the statement of reasons has been shown to be inad- equate.

69. It is not possible, on the other hand, to infer from certain cases of defective prac- tical application a general failure on the part of the administrative authorities to 73. As has been seen, however, those comply with the Directive. Suffice it to decisions were set aside by the Finnish point out that, of the decisions given by the ministerial commission, only 84 out of 2 029 in 1998, and 133 out of 3 266 in the 11 — See, to refer only to some of the most recent authorities, Case C-263/99 Commission v Italy [20011 ECR I-4195, following year were flawed, representing paragraph 27, Case C-347/98 Commission v Belgium [2001) ECR I-3327, paragraph 39, and Case C-159/94 only 4 . 1 % of the total in both cases. Commission v France [1997] ECR I-5815, paragraph 102.

77. Under Article 69(3) of the Rules of Procedure, the Court may, where each 75. That conclusion is not undermined by party succeeds on some and fails on other the lack of any express provision imple- heads, order that the costs be shared or that menting Article 6(2) of the Directive. each party bear its own costs. Since, as I According to the Court's case-law, in fact, have said above, I find that Finland and the 'the implementation of a directive does not Commission have both failed in part, it necessarily require legislative action in each appears to me to be fair to propose also Member State. In particular, the existence that each party should bear its own costs. of general principles of constitutional or administrative law may render implemen- tation by specific legislation superfluous 12 —See Case C-365/93 Commission v Greece [1995] ECR I-499, paragraph 9, and Case 29/84 Commission v provided, however, that those principles Germany [1985] ECR 1661.

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Conclusion

78. In light of the foregoing considerations, I propose that the Court:

(1) declare that, by failing to adopt all the laws, regulations and administrative provisions necessary to comply with Article 6(1) and (2) of Council Directive 89/105/EEC of 21 December 1988 relating to the transparency of measures regulating the prices of medicinal products for human use and their inclusion in the scope of national health insurance systems, in relation to decisions establishing certain special categories of higher-rate reimbursement of the cost of medicines, the Republic of Finland has failed to fulfil its obligations under that Directive and the EC Treaty;