CJEC, February 28, 1984, No 247-81

The court

1 By application lodged at the court registry on 10 september 1981, the Commission of the European Communities brought an action under article 169 of the eec treaty for a declaration that by reserving the placing of medicinal preparations on the market to pharmaceutical undertakings having their headquarters in the area in which the german law on medicinal preparations is applicable, the Federal Republic of Germany has failed to fulfil its obligations under article 30 et seq. Of the eec treaty.

2 By virtue of article 1, paragraph 9 (2) of the law of 24 august 1976 revising the law on medicinal preparations (bgbl. I, p. 2445) pharmaceutical products may be placed on the market only by a pharmaceutical undertaking having its headquarters in the area in which that law is applicable. By so limiting the opportunities for marketing medicinal preparations, that condition is undeniably, according to the commission, a restriction on imports which entails for foreign undertakings an increase in their costs and which constitutes a serious interference with their freedom of action. According to directive 70-50 of 22 december 1969, measures which make access of imported products to the domestic market conditional upon having an agent or representative in the territory of the importing member state are to be considered as having an effect equivalent to a quantitative restriction (article 2 (3) (g)).

3 According to the german government, the provisions in question do not constitute an obstacle to imports, since in practice all pharmaceutical undertakings established in another member state and wishing to export to the Federal Republic of Germany will have recourse to a subsidiary, a branch or a representative body already established in the territory of the federal republic. The obligation to have a representative resident in germany corresponds therefore to a choice which the undertakings would in any event have to make for commercial reasons.

4 That argument cannot be accepted. According to the consistent case-law of the court all commercial rules of member states likely to hinder directly or indirectly, actually or potentially, trade within the community are to be considered as measures having an effect equivalent to a quantitative restriction. The court considers in this respect that the disputed provision is likely to involve additional costs for undertakings which find no good reason for having a representative of their own established in the Federal Republic of Germany for the purpose of promoting their exports to that member state, and which sell directly to several customers. The disputed provision is therefore likely to hinder trade within the community and in particular parallel imports, and must be regarded as a measure having an effect equivalent to a quantitative restriction.

5 The german government considers that the disputed measure can be justified on the basis of article 36 of the eec treaty because it is the only one which makes it possible to protect public health in a sure and efficient way. In its view, the obligation to be represented by a pharmaceutical undertaking within its territory corresponds to the need for continuous surveillance of the risks peculiar to medicinal preparations. The competent authorities need to be able to contact a responsible person who has all the necessary documents, in particular so as to be able to identify consignments of defective medicinal preparations, when it is necessary to withdraw those consignments. Experience also shows that there are difficulties in communicating with undertakings established in the most distant parts of the community. In particular, postal and telecommunication services are subject to interruption due to strikes and the competent authorities of the lander cannot employ qualified staff speaking all the languages of the community.

6 The german government also insists on the need to ensure, through the presence of a responsible person in the territory of the federal republic, the effectiveness of the measures adopted in relation to the civil and criminal liability of pharmaceutical undertakings.

7 The principle behind the arguments put forward by the german government cannot be disputed, inasmuch as, in the absence of adequate harmonization at community level, each member state is entitled to take appropriate measures in order to ensure the protection of public health in its territory. However, such measures are justified only if it is established that they are necessary in order to attain the objective of the protection of public health referred to in article 36 of the treaty and that that objective cannot be attained by means which are less restrictive of trade within the community.

8 In this connection, it should be remembered that council directive 65-65 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, 1965-1966, p. 20) provides that no proprietary medicinal product may be placed on the market in a member state without the prior authorization of that member state. The person responsible for placing that product on the market must make an application accompanied by the information and documents set out in article 4 of the directive. The authorization to place the product on the market may be refused, in particular if the proprietary medicinal product proves to be harmful, and the authorization can also be suspended or revoked by the member state concerned. Furthermore, it is provided in article 13 of the directive that the containers and outer packages of proprietary medicinal products must carry the name or style and the address or registered office of the person responsible for placing the product on the market and, if necessary, of the manufacturer, as well as a reference number allowing identification of the manufacturer ' s batch from which the product in question comes.

9 The directive provides for the possibility that the person responsible for placing the product on the market may be someone other than the manufacturer but contains no provision giving member states the right to require that the person responsible for placing the product on the market should be established on the territory of the member state for which the authorization to place the product on the market is sought. Since the directive is intended to reduce obstacles to trade, its silence may not be interpreted as authorizing member states to introduce or maintain such a requirement.

10 It should also be noted that the directive applies only to proprietary medicinal products, that is to say, products prepared in advance, and marketed under a special name and in special packaging. As regards the place in which the person responsible for placing the product on the market is established, the parties have not, however, put forward any reason, in the course of the proceedings, for making a distinction between the supervision which may be required in the case of proprietary medicinal products, on the one hand, and that which may be required in the case of other medicinal preparations, on the other.

11 With regard to article 36 of the treaty, it is apparent that the objectives that the german government wishes to achieve in relation to the surveillance of medicinal preparations and the availability of information in case of accident could be fully met by appropriate organizational measures at the stage of the examination of applications and the issue of the authorization to place the product on the market, without there being any need to have a representative on the national territory and still less without there being any need for a pharmaceutical undertaking to act as intermediary. The procedure for obtaining an authorization to place a product on the market necessarily implies contacts between the competent authorities and the person responsible for placing that product on the market, established in another member state, and these can be renewed, if need be, if difficulties arise in the course of marketing.

12 Furthermore, the procedure of applying for an authorization to place a product on the market has a preventive effect and the possibility that the authorization might be suspended or revoked is an incentive to the manufacturers and the person responsible for placing products on the market to comply with the rules in force, given the impact of such a decision on the undertaking and on its sales. Also, where medicinal preparations imported from another member state are a source of danger, the authorities of the importing member state will not fail to contact the competent authorities in the member states of production which can, in turn, take the necessary measures. There is also the possibility of informing the circles concerned, particularly doctors and pharmacists and, in the event of emergency, of warning the public directly through the press, radio and television.

13 With regard to the german government ' s arguments concerning linguistic problems and possible communications difficulties, it should be pointed out that these difficulties can be resolved by the undertakings and by the administrations in the same way as in every other field of trade. The possibility that such difficulties may arise cannot therefore justify the restrictive character of the german legislation.

14 As regards civil and criminal liability, these are matters which are relevant, for the purposes of the protection of human health, only in so far as application of penal provisions may have a preventive effect. It is clear that, as far as effective prevention is concerned, the preliminary formalities connected with the authorization to place products on the market as well as the checks carried out at that stage and possible subsequent checks can provide an adequate safeguard from the point of view of human health. Even though criminal penalties and damages may have a deterrent effect as regards the conduct which they sanction, that effect is not guaranteed and, in any event, is not strengthened, in the case of a manufacturer in another member state, solely by the presence on national territory of a person who may legally represent that manufacturer.

15 In the light of the foregoing, it must be concluded that the Federal Republic of Germany, by reserving the placing of medicinal preparations on the market to pharmaceutical undertakings whose headquarters are situated in the area in which the law on medicinal preparations is applicable, has infringed article 30 et seq. Of the eec treaty.

Costs

16 Under article 69 (2) of the rules of procedure, the unsuccessful party is to be ordered to pay the costs. Since the defendant has failed in its submission it must be ordered to pay the costs.

On those grounds,

The court

Hereby:

1. Declares that, by reserving the marketing of medicinal preparations to pharmaceutical undertakings having their headquarters in the area in which the german law on medicinal preparations is applicable, the Federal Republic of Germany has failed to fulfil its obligations under article 30 et seq. Of the eec treaty;

2. Orders the defendant to pay the costs.