1. Current legal situation of pharmacies in the EU Brussels, 15 April 2009 Dr. Edurne Navarro Varona

2. Introduction 1. Preliminary issues 2. Reasoned opinion on the Spanish pharmacy legislation 3. Some reflections

3. Preliminary issues 1. Brief description of the current situation The European Commission is questioning the legislation on the establishment of pharmacies in some Member States (MS) Reasoned opinions sent to 6 MS: Germany, Austria, France, Italy, Portugal and Spain Italian case before ECJ (C-531/06); Advocate General Yves Bot’s opinion (16 Dec. 2008) Spanish, Italian and German national courts have requested preliminary rulings to ECJ 1

4. Preliminary issues 2. Relevant EC legislation Art. 43 EC Treaty: freedom of establishment Art. 152 EC Treaty: public health Objective inspiring EC action: “A high level of human health protection shall be ensured in the definition and implementation of all Community policies and activities” Subsidiarity principle: “Community action in the field of public health shall fully respect the responsibilities of the Member States for the organization and delivery of health services and medical care.” 1

5. Preliminary aspects 2. Relevant EC legislation Directive 2006/123/EC on services in the internal market: Art. 2.2.f and whereas 22 foresee the exclusion of health services – including pharmaceutical ones – from the Directive’s scope Art. 15.2 foresees the possibility to establish quantitative or territorial restrictions (ex. depending on population or minimum distances) to the provision of services, provided they are proportionate and not discriminatory 1

6. Reasoned opinion on the Spanish pharmacy legislation 1. Evolution of the procedure against the Spanish legislation on establishment of pharmacies 2. Substance of the reasoned opinion 3. Analysis of the compatibility with EC Treaty of questioned measures 4. Comparative analysis with ECJ ruling on Greek opticians 5. Next steps 2

7. 1. Evolution of the procedure against the Spanish legislation on establishment of pharmacies 13.7.2005: Letter of formal notice sent to Spanish government 18.10.2005: Written observations of Spanish government 4.7.2006: Commission’s reasoned opinion 2009?: Commission decision to bring the Spanish pharmacy legislation before the ECJ 2 Reasoned opinion on the Spanish pharmacy legislation

8. 2. Substance of the reasoned opinion Commission is questioning 3 measures on establishment of pharmacies in Spain: 1. Minimum population and geographical requirements 2. Restrictions to pharmacy ownership: a pharmacist may own only one pharmacy only a pharmacist may own a pharmacy 3. [Proportionality of the grant of additional point for the access to new pharmacies in case of previous experience in one Autonomous Community] 2

9. 3. Analysis of the compatibility with EC Treaty of questioned measures : Fulfillment of requirements established in Gebhard case- law (C-55/94): i. No discrimination by its object or effects ii. Justification by overriding reason of general interest iii. Proportionality and adequacy 2 Reasoned opinion on the Spanish pharmacy legislation

10. 3. Analysis of the compatibility with EC Treaty of questioned measures (I): Non discriminatory character No discrimination : By its object: restrictions are applied indistinctly of the pharmacist’s nationality By its effects: restrictions do not render access to pharmacies more difficult for pharmacists from other MS pharmacists from other MS own pharmacies in Spain 2 Reasoned opinion on the Spanish pharmacy legislation

11. 3. Analysis of the compatibility with EC Treaty of questioned measures (II): Protection of public health as overriding reason of general interest Minimum geographic and population criteria guarantee universal access to pharmaceutical services irrespective of patient’s residence (rural, urban or touristic areas, etc.) Better/wider pharmaceutical coverage guaranteed by regulated models proven in several studies “ECORYS Report”, requested by European Commission, acknowledges risk for pharmaceutical coverage of rural or remote areas if restrictions are eliminated 2 Reasoned opinion on the Spanish pharmacy legislation

12. 3. Analysis of the compatibility with EC Treaty of questioned measures (II): Protection of public health as overriding reason of general interest Ownership restrictions are also justified : “A pharmacist which owns its pharmacy is economically independent, which guarantees the free exercise of its profession” “[A pharmacist] is, at a time, an entrepreneur who is close to the economic situations linked to the management of its pharmacy, and a health professional, who balances its financial imperatives with public health considerations, which distinguishes him from a mere investor” AG Bot; C-531/06 2 Reasoned opinion on the Spanish pharmacy legislation

13. 3. Analysis of the compatibility with EC Treaty of questioned measures (III): Proportionality and adequacy Adequacy to guarantee a high level of public health protection: guarantee high quality pharmaceutical services in the whole Spanish territory, incl. remote and rural areas prevent “conflicts of interest which could arise from a vertical integration in the pharmaceutical sector and which could have a negative influence on the quality of the dispense of medicines” (AG Bot, C-531/06) Proportionality of the measures: success of the Spanish system in achieving its health protection objectives (full pharmaceutical coverage; close, high quality pharmacies with accountable pharmacists) measures are at the core of Spanish pharmacy system, which balances interests of patients and pharmacists 2 Reasoned opinion on the Spanish pharmacy legislation

14. 4. Comparative analysis with ECJ ruling on Greek opticians Main aspects of the ECJ ruling: Restrictions to ownership of optician shops: an optician may own one single shop ECJ reasoning: measures are not discriminatory and may be justified by overriding reasons of public health measures are disproportionate: there are less restrictive means to achieve the same result (presence of a qualified optician + professional liability insurance) 2 Reasoned opinion on the Spanish pharmacy legislation

15. 4. Comparative analysis with ECJ ruling on Greek opticians Commission’s approach: optician = pharmacist BUT...dissimilar activities different treatment Different training and requirements to open an establishment Different risks for health and patients: misuse of medicines may have more serious consequences on health – including the death of the patient – that optician’s products “the dispense of medicines cannot be regarded at the same level of the sales of optician’s products from the point of view of the protection of public health” (AG Bot, C-531/06) 2 Reasoned opinion on the Spanish pharmacy legislation

16. 5. Next steps 2009: ECJ ruling in Italian case and in other related cases on preliminary rulings (incl. the Spanish preliminary ruling on minimum requirements of population and distances between pharmacies) 2009? : Commission decision to bring before ECJ the infringement procedures against Spain, France, Germany, Austria and Portugal ?: Proposal for EC legislation on health services in the internal market 2 Reasoned opinion on the Spanish pharmacy legislation

17. Some reflections 1. Reflections on the ECJ rulings in proceedings on pharmacies Difficult task of ECJ to balance : freedom of establishment vs. health protection regulated models vs. non-regulated models commercial criteria vs. sanitary criteria Possible consequences arising from ECJ rulings: legal interpretation, but also health policy guidance; possible substantial modification of EU pharmacy systems 3

18. Some reflections 2. Reflections on the choice of mechanism for EC action in the pharmacy sector: legislation vs. infringement procedures a. Legislation: participation of several EU institutions (EC Commission, European Parliament, Council of the EU, others) difficulty to reach a political agreement on sensitive issues (ex. Services Directive) slow procedure, eventually implementation issues b. Infringement procedure: participation of European Commission, MS and ECJ lower stagnation risk : no political agreement at EC level necessary (no participation of European Parliament/Council of the EU) faster procedure 3

19. Some reflections 3. Reflections on Community action in general in the pharmacy sector Necessity of an in-depth impact analysis prior to the adoption of any measures in a sensitive issue like public health: consequences of the measures for patients and sanitary policies of MS Neutrality between pharmacy models in the EU: “ECORYS Report” analyses national pharmacy systems on the basis of the model of a liberalized system based on economic criteria / other criteria should be considered: proximity, quality, professionalism of advice, etc. Each pharmacy system has to be analyzed in view of the characteristics and necessities of the population and the MS’ legal and sanitary tradition (Internet not always an option) No “one model fits all” approach 3