Criminal proceedings against Krister Hanner.

• Jurisdiction: European Union
• Celex Number: 62002CC0438
• ECLI: ECLI:EU:C:2004:317
• Docket Number: C-438/02
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling
• Date: 25 May 2004

OPINION OF ADVOCATE GENERAL
LÉGER
delivered on 25 May 2004(1)


Case C-438/02

Åklagaren
v
Krister Hanner


(Reference for a preliminary ruling from the Stockholms Tingsrätt (Sweden))

(Article 31 EC – State monopolies – Monopoly on the retail sale of medicinal products – Discrimination – Justification – Article 86(2) EC)

1. In this case, the Stockholms Tingsrätt (District Court, Stockholm) (Sweden) refers a number of questions for a preliminary ruling on the legality of the monopoly on the retail of medicinal products in Sweden. Those questions arose in criminal proceedings against Mr Krister Hanner, who is accused of selling certain medicinal products in contravention of the Swedish legislation which allows only the State or a body designated by the State to sell those products. 2. This case essentially raises the question whether an exclusive retailing right can be considered compatible with Article 31 EC. If not, it will be necessary to ask whether the maintenance of such an exclusive right can be justified on the basis of the derogating provisions of the EC Treaty and, in particular, of Article 86(2) EC. 3. One of the difficulties with this issue arises from the fact that the Court’s case‑law contains contradictory answers on those various points. I – National legal background 4. In 1969, the Swedish authorities organised the dissolution of private pharmacies and established a State monopoly on the retail of medicinal products. That monopoly covers all medicinal products, namely medicinal products for human and veterinary use as well as prescription and non‑prescription medicines. It is now governed by the Lagen (1996:1152) om handel med läkemedel m.m. (Law No 1152 of 1996 on trade in medicinal products). (2) 5. Section 2 of that law defines ‘retail’ as the sale to consumers and persons authorised to prescribe medicines. Under Section 3 of the law, any other form of selling constitutes ‘wholesale’ and requires authorisation from the Läkemedelsverket (the Swedish Medicinal Products Agency). 6. Section 4 of the Law of 1996 establishes the Swedish State monopoly. It states that ‘[u]nless otherwise provided by this law, the retail of [medicinal products] shall be reserved for the State or for one or more legal persons over which the State has a determining influence’ and that ‘[t]he Government shall determine the person(s) authorised to engage in this trade and the detailed rules for engaging therein’. 7. By way of derogation from that provision, the retail of medicinal products to hospitals may be engaged in by persons holding a wholesale authorisation. (3) 8. Under Section 11 of the Law of 1996, persons who disregard the provisions establishing the State monopoly are liable to a penalty consisting of a fine or a period of imprisonment of up to two years. 9. Under an agreement signed in 1970, the Swedish State entrusted the company Apoteksbolaget AB, which had been specifically set up for that purpose, with the task of engaging in the activity of retailing medicinal products. Apoteksbolaget AB subsequently changed its name and became, in 1988, Apoteket AB. (4) 10. Apoteket is a company whose capital is held by the State and whose board of directors is composed mainly of politicians and civil servants. It currently has a total of 11 000 employees. 11. For the purpose of selling medicinal products to the public, Apoteket has recourse to 800 pharmacies which it owns and manages itself. Those dispensaries are generally located in densely populated areas such as urban centres, shopping centres and health care centres. 12. In rural areas, where setting up a pharmacy would not be financially viable, Apoteket sells medicinal products through some 970 ‘Apoteksombud’ (pharmacy agents). These are private operators with whom it has concluded an agreement and who undertake, in return for remuneration, to distribute prescription medicines to patients. These pharmacy agents are also authorised to sell a limited selection of non‑prescription medicines to the public. They are under the supervision of Apoteket, which determines the selling price of the medicinal products as well as the selection of products. Pharmacy agents receive no specific training and are not allowed to give the customers advice on the use of the medicinal products. 13. The file shows that, since the spring of 2002, Apoteket has also been selling non‑prescription medicines over the internet and by telephone. In the long term, it expects to be able to sell all medicinal products, including prescription medicines, through those channels. In those circumstances, it would dispatch the medicinal products to the customers, together with the necessary information and advice on use. 14. With regard to the conditions governing procurement, Apoteket obtains its supplies exclusively from two wholesalers on the Swedish market, namely Tamro and Kronans Droghandel. It is not allowed to import medicinal products from other Member States itself. 15. At the material time, relations between the State and Apoteket were governed by the agreement of 20 December 1996, as extended and amended by the agreement of 21 December 1998. (5) 16. That agreement provides that Apoteket must ensure that there is a satisfactory nationwide supply of medicinal products and that consumers receive information which is independent of the manufacturers of the medicinal products. To that end, Apoteket must organise a national distribution system and ensure that stocks and delivery capacity are sufficient to meet the demands of the health system. Against that background, Apoteket itself determines the number and locations of pharmacies and other sales outlets for medicinal products. It must be able to supply all the medicines (prescription or non‑prescription) covered by its exclusive right. 17. Article 8 of the 1996 agreement requires Apoteket to charge a single selling price for each medicinal product. For medicines eligible for reimbursement, the selling price – and therefore Apoteket’s profit margin – is fixed by the Läkemedelsförmånsnämnden (Committee on Medicine Prices). However, in the case of medicines for which there is no reimbursement, Apoteket itself fixes the prices of products as well as its profit margin. The medicines which are eligible for reimbursement are prescription medicines and certain non‑prescription medicines. II – The reference for a preliminary ruling 18. The Swedish authorities brought criminal proceedings against Mr Hanner for contravening Section 4 of the Law of 1996. They accuse him of selling, in May and July 2001, 12 packs of Nicorette patches and Nicorette chewing gum, namely nicotine substitutes intended to help smokers stop smoking. The public prosecutor pointed out that those products were classed as medicinal products by the Läkemedelsverket and were therefore covered by the Swedish State monopoly. 19. Before the national court, Mr Hanner accepted the facts but disputed that they constituted an offence. He maintained that the Swedish State monopoly was contrary to Articles 31 EC, 28 EC and 43 EC. 20. Taking the view that the outcome of the proceedings hinged on the interpretation of those provisions, the Stockholms Tingsrätt decided to stay the proceedings and to submit the following questions to the Court for a preliminary ruling: ‘1. There is an independent system at national level for the testing and approval of medicinal products, intended to ensure the good quality of medicinal products and prevent damaging effects of medicinal products. Certain medicinal products also require a prescription from a registered doctor. In such circumstances, does Article 31 EC preclude national legislation which provides that retail trade in medicinal products may only be carried on by the State or by legal persons over which the State has a determining influence, the objective of which is to meet the need for safe and effective medicinal products? 2. Does Article 28 EC preclude legislation such as that described in Question 1, in the light of the information contained in that question? 3. Does Article 43 EC preclude legislation such as that described in Question 1, in the light of the information contained in that question? 4. Does the principle of proportionality preclude national legislation such as that described in Question 1, on examination of Questions 1 to 3? 5. Would the answers to Questions 1 to 4 be different if “non-prescription” medicines were entirely or partly exempted from the requirement under national legislation that retail trade in medicinal products be carried on only by the State or by legal persons over which the State has a determining influence?’ III – Purpose of the questions referred 21. The request from the Stockholms Tingsrätt for a preliminary ruling raises two sets of questions. 22. First, the national court seeks to ascertain whether the fundamental provisions governing the free movement of goods (AArticles 31 EC and 28 EC) and freedom of establishment (Article 43 EC) preclude national legislation which reserves for the State, or for a body controlled by the State, the exclusive right to retail medicinal products. (6) 23. If so, it will then be necessary to ask whether such legislation can be justified on the basis of the exceptions provided for by the Treaty. Although the Stockholms Tingsrätt does not expressly refer to the derogating provisions of the Treaty in its request for a preliminary ruling, only an interpretation of those provisions will serve to provide it with a helpful answer, that is to say, with all the criteria necessary in order to determine whether the monopoly at issue is compatible with...