CELEX: 62007CC0141
Language: en
Date: 2008-04-10
Title: Opinion of Mr Advocate General Bot delivered on 10 April 2008. # Commission of the European Communities v Federal Republic of Germany. # Failure of a Member State to fulfil obligations - Measures having equivalent effect to a quantitative restriction - Protection of public health - Justification - Pharmacies - Supply of medicinal products directly to hospitals - Proximity to the hospital concerned. # Case C-141/07.

OPINION OF ADVOCATE GENERAL
      BOT
      delivered on 10 April 2008 1(1)
      
      Case C‑141/07
      Commission of the European Communities
      v
      Federal Republic of Germany
      (Supply of medicinal products to a hospital by an external pharmacy – Requirement for the external pharmacy to make supplies on a regular basis and in emergencies, to give advice to hospital
         staff on a regular basis and in emergencies, to be involved in selecting medicinal products and to check stocks – Market restricted to pharmacies located in the vicinity of a hospital – Measure having an equivalent effect to a quantitative restriction on imports – Justification – Protection of public health)
      1.        This action for failure to fulfil obligations concerns whether the provisions of German law applying when a hospital decides
         to obtain its supplies of medicinal products from an external pharmacy are compatible with the EC Treaty rules on the free
         movement of goods. 
      
      2.        Under German law, a hospital located in Germany may obtain supplies of medicinal products either from an internal pharmacy
         within the hospital or from a pharmacy in another hospital or from an external pharmacy. In the last two cases the hospital
         must enter into a contract with the pharmacy concerned, which must agree to carry out all aspects of the supply of medicinal
         products, that is to say, to make supplies on a regular basis and in emergencies, to give advice to hospital staff on a regular
         basis and in emergencies, to be involved in selecting medicinal products and to check stocks of medicinal products supplied
         to the hospital.
      
      3.        It is common ground that those cumulative requirements (‘the contested requirements’) can be met only by a pharmacy in the
         geographical vicinity of the hospital concerned.
      
      4.        The Commission of the European Communities contends that, by maintaining in force that law, which makes it impossible in practice
         for pharmacies established in other Member States to supply medicinal products to a hospital in Germany, the Federal Republic
         of Germany has failed to fulfil its obligations under Articles 28 EC and 30 EC. 
      
      5.        In this Opinion I shall explain in what way the contested requirements, although they should be regarded as selling arrangements
         within the meaning of Keck and Mithouard, (2) constitute a measure having an equivalent effect to a quantitative restriction on imports.
      
      6.        I shall then state that, in the light of the explanations provided by the Federal Republic of Germany, that restriction appears
         to me to be justified in order to protect public health, so that the present action for failure to fulfil obligations should
         be dismissed as unfounded.
      
      I –  Legal context
      7.        Under Paragraph 43(1) of the German Arzneimittelgesetz (Law on Medicinal Products), in Germany medicinal products may be sold
         only by pharmacies, including sales to hospitals and doctors, and purchasing direct from manufacturers or wholesalers is in
         principle prohibited. 
      
      8.        The provisions on the supply of medicinal products to hospitals are contained in Paragraph 14 of the German Apothekengesetz
         (Law on Pharmacies). (3)
      
      9.        Under that paragraph, hospitals have the choice of obtaining their supplies of medicinal products either from an internal
         pharmacy, that is to say, a pharmacy operating within the hospital and normally not accessible to the public, or from the
         pharmacy at another hospital, or from an external pharmacy. Where a hospital takes the decision to obtain supplies from the
         pharmacy at another hospital or from an external pharmacy it must conclude a contract with that pharmacy which is subject
         to the contested requirements set out in Paragraph 14(4) to (6) of the ApoG.
      
      10.      Those provisions, in the version in force since 21 June 2005, read as follows:
      
      ‘(4)      If the body responsible for a hospital intends to obtain supplies for the hospital from the holder of a licence to operate
         a pharmacy under Paragraph 1(2), or under the laws of another Member State of the European Union or of another State Party
         to the Agreement on the European Economic Area, it must conclude a contract in writing with that licence-holder. The place
         of performance of the contractual supplies shall be the address of the hospital. The applicable law shall be German law.
      
      (5)      In order to be valid, a contract concluded under subparagraph 3 or 4 must be approved by the competent authority. Approval
         shall be given where it is established that the hospital has concluded a contract with a pharmacy under subparagraph 3 or
         4, for the supply of medicinal products to the hospital, which satisfies the following requirements:
      
      1.      proper provision of supplies of medicinal products is be ensured; in particular, the pharmacy must possess the premises, equipment
         and staff required under the Apothekenbetriebsordnung [Regulation on the Operation of Pharmacies] or, in the case of pharmacies
         established in another Member State of the European Union or in another State Party to the Agreement on the European Economic
         Area, under the provisions in force in that State;
      
      2.      the pharmacy supplies the hospital with the medicinal products it has ordered directly or, where they are to be sent, in accordance
         with the requirements laid down in Paragraph 11a;
      
      3.      the pharmacy makes available to the hospital without delay and in accordance with what is needed the medicinal products it
         requires particularly urgently for acute medical treatment;
      
      4.      the manager of the pharmacy within the meaning of subparagraph 3 or 4, or the pharmacist of the supplying pharmacy authorised
         by him, personally advises the hospital staff in accordance with what is needed and, in an emergency, without delay;
      
      5.      the supplying pharmacy ensures that it provides hospital staff with advice on a continuous basis with a view to effective
         and economic pharmacotherapy; 
      
      6.      the manager of the supplying pharmacy within the meaning of subparagraph 3 or 4, or the pharmacist authorised by him, is a
         member of the hospital’s medicinal products committee.
      
      Authorisation from the competent authority shall also be required for a hospital pharmacy to supply another hospital for which
         the same body is responsible. The provisions of the second sentence shall apply mutatis mutandis with regard to the grant
         of such authorisation.
      
      (6)      The manager of the hospital pharmacy within the meaning of subparagraph 1, or of a pharmacy within the meaning of subparagraph
         4, or a pharmacist authorised by him, must check stocks of the medicinal products at the hospital to be supplied, in accordance
         with the Regulation on the Operation of Pharmacies, and must in particular in that regard ensure that the medicinal products
         are of faultless quality and are properly stored. …’
      
      II –  The pre-litigation procedure
      11.      Until it was amended in June 2005, the ApoG contained rules that were known as ‘the regional principle’, whereby an external
         pharmacy wishing to conclude a contract to supply medicinal products to a hospital had to be established in the same town
         or district as that hospital.
      
      12.      The Commission had challenged the conformity of that principle with Community law in a letter of formal notice dated 11 July
         2003 and in a reasoned opinion dated 19 December 2003.
      
      13.      On 4 November 2004 the German Government approved a draft law amending Paragraph 14 of the ApoG in order to enable hospitals
         also to conclude different supply contracts for medicinal products with a number of pharmacies.
      
      14.      However, the Bundesrat (Upper Chamber of the Federal Parliament) declined to approve that draft law on the ground that the
         supply system for medicinal products at regional level had proved successful as regards quality and safety and that the system
         had not been shown to be incompatible with Community law. In addition, a majority of the Länder opposed the possibility of a hospital concluding separate contracts with different suppliers. That is why Paragraph 14 of
         the ApoG was amended with effect from 21 June 2005 to read as above.
      
      15.      On 18 October 2005 the Commission sent a further letter of formal notice to the Federal Republic of Germany, in which it stated
         that the contested requirements imposed on suppliers under the new version of Paragraph 14 of the ApoG were equivalent to
         maintaining the regional principle in a disguised form.
      
      16.      By letter of 14 December 2005 the Federal Republic of Germany argued that the contested requirements, designed to assign to
         a single supplier all the aspects of supplying medicinal products to a hospital, were authorised selling arrangements and,
         in the alternative, that they were justified in order to protect public health, in accordance with Article 30 EC.
      
      17.      The Commission sent the Federal Republic of Germany a reasoned opinion dated 10 April 2006, in which it maintained its criticisms
         and rebutted that Member State’s arguments.
      
      18.      The Federal Republic of Germany replied to the Commission by letter of 2 June 2006, stating that its position was unchanged.
      
      III –  Procedure before the Court of Justice and forms of order sought
      19.      The Commission brought the matter before the Court by application of 9 March 2007. The Federal Republic of Germany lodged
         its defence on 21 May 2007. The Commission lodged its reply on 10 July 2007 and the Federal Republic of Germany lodged its
         rejoinder on 15 August 2007. The parties did not request a hearing.
      
      20.      The Commission claims that the Court should:
      
      –        declare that, by providing in Paragraph 14(5) and 14(6) of the ApoG that a contract to supply medicinal products is subject
         to cumulative requirements which make it impossible in practice for pharmacies in other Member States to supply medicinal
         products to a hospital in Germany on a regular basis, the Federal Republic of Germany has failed to fulfil its obligations
         under Article 28 EC and Article 30 EC; 
      
      –        order the Federal Republic of Germany to pay the costs.
      21.      The Federal Republic of Germany contends that the Court should dismiss the application and order the Commission to pay the
         costs.
      
      IV –  Arguments of the parties
      A –    The Commission
      22.      The Commission contends that the contested requirements fall within the scope of Article 28 EC, that they constitute a measure
         having an equivalent effect to a quantitative restriction on imports, and that that restriction is not justified.
      
      1.      Application of Article 28 EC 
      23.      The Commission states that, as Community law now stands, the sale of medicinal products is subject to harmonisation only in
         limited areas. Although Member States may therefore legislate in the other areas, they must none the less comply with the
         rules of the Treaty, in particular those relating to the free movement of goods, irrespective of the provisions of Article
         152 EC.
      
      24.      The fact noted by the Federal Republic of Germany that in some other Member States only an internal pharmacy may supply medicinal
         products to a hospital does not reduce the scope of that requirement once the Federal Republic has made provision for an external
         pharmacy to provide such supplies.
      
      2.      A measure having an equivalent effect to a quantitative restriction on imports 
      25.      The Commission states that the contested requirements laid down in Paragraph 14(5) and (6) of the ApoG are selling arrangements
         within the meaning of Keck and Mithouard. It considers that those requirements none the less fall within the scope of Article 28 EC because they affect medicinal
         products from other Member States more severely than medicinal products of national origin.
      
      26.      Thus the Commission argues that several of the contested requirements imposed on external pharmacies, such as speedy delivery
         of medicinal products in accordance with what is needed, the task of advising hospital staff in an emergency, membership of
         the hospital’s medicines committee and checking the hospital’s stocks of medicinal products, require such pharmacies to be
         located in the close geographical vicinity of the hospital being supplied. 
      
      27.      Requiring a single supplier to fulfil all these requirements therefore has the effect of excluding pharmacies from other Member
         States from access to the market for supplying medicinal products to German hospitals, and hence of preventing medicinal products
         from those other Member States from having access to that market.
      
      28.      The contested requirements imposed by the ApoG therefore constitute a measure having an equivalent effect to a quantitative
         restriction on imports. This view is not altered by the fact that those requirements also penalise pharmacies located in Germany
         a long distance from the hospital to be supplied or by the fact that a local supplier can buy the necessary medicinal products
         from a foreign wholesaler.
      
      29.      The Commission also rejects as irrelevant the Federal Republic of Germany’s argument that pharmacies established in other
         Member States do not, as a rule, have sufficient stocks of medicinal products authorised in Germany.
      
      3.      No justification
      30.      The Commission states that the burden of proof in justifying a restriction on a ground referred to in Article 30 EC or on
         the ground of an overriding reason of public interest falls on the Member State which is claiming that justification.
      
      31.      It notes first of all that it convinced the Federal Republic of Germany of the need to abolish the regional principle applying
         up until June 2005 and that, in the draft law forwarded to it by that Member State in November 2004, the principle of concentrating
         all the aspects of a contract for supplying medicinal products to a hospital in a single supplier had been abandoned.
      
      32.      The Commission also states that the two grounds on which the Federal Republic of Germany maintains that the contested requirements
         are justified in order to protect public health are unfounded.
      
      33.      As regards, first, the need for a single pharmacy to supply medicinal products to a hospital, the Commission maintains that
         it does not challenge that requirement. It simply challenges the fact that only a local pharmacy can conclude a supply contract
         with a hospital. Hospitals should be able to decide themselves whether to assign the provision of normal supplies, the provision
         of emergency supplies, the checking of stocks of medicinal products and the provision of advice to hospital staff to a single
         pharmacy.
      
      34.      As regards, second, the need for a comprehensive supply contract for medicinal products, the Commission states that the Federal
         Republic of Germany’s argument that the complexity of supplying medicinal products to hospitals does not allow there to be
         more than one person responsible for the various aspects of such provision, in particular the supplying of medicinal products
         and the checking of stocks of medicinal products, is unfounded. It justifies its position as follows.
      
      35.      To begin with, there would be no deterioration in the quality of the provision of such supplies if the provision of normal
         supplies were separated from the provision of emergency supplies. In the Commission’s view, a decisive factor in the quality
         of the provision of emergency supplies is the speed at which the medicinal product required can be delivered, so that there
         is no need to link the provision of emergency supplies compulsorily with other aspects of the supply of medicinal products
         to hospitals.
      
      36.      Next, there would be no deterioration in the quality of the provision of such supplies if the provision of normal supplies
         were separated from the selection of medicinal products. The Commission accepts that a hospital needs the advice of a pharmacist
         in selecting its medicinal products, but it does not understand why he should be the pharmacist supplying those products.
         The latter should in any event check the quality of his products.
      
      37.      Likewise, there would be no deterioration in the quality of the provision of supplies of medicinal products to a hospital
         if the supply of medicinal products were separated from the checks on stocks of medicinal products. The Commission considers
         that such separation would, on the contrary, lead to optimum quality being achieved in both activities.
      
      38.      Lastly, there would be no deterioration in the quality of the provision of such supplies were hospital staff to be given advice
         by telephone. The Commission contends that giving advice on the spot, as point 4 of Paragraph 14(5) of the ApoG requires,
         is not needed in order to achieve a high level of quality. It points out in that regard that in Deutscher Apothekerverband (4) the Court of Justice agreed that medicinal products could be sold to patients via the internet, thus dismissing the idea
         that the absence of advice given in person might endanger their safety. This view, according to the Commission, applies a
         fortiori in the case of specialist hospital staff, especially since responsibility for the use of medicinal products always
         lies with the doctor. Moreover, a pharmacist, even one located in the vicinity of the hospital, must spend most of his time
         in his own dispensary and not at the hospital.
      
      B –    The Federal Republic of Germany
      39.      The Federal Republic of Germany points out, first of all, that the present proceedings originate, not in a complaint from
         a pharmacy established in another Member State which is prevented from supplying its products in Germany, but from a company
         which runs several hospitals in Germany through its subsidiaries and wishes to be able to supply them all through a single
         pharmacy.
      
      40.      It also maintains that the purpose of the contested requirements laid down in Paragraph 14 of the ApoG is to ensure that hospitals
         are supplied with high‑quality medicinal products and that the requirements should be assessed in the light of the fact that,
         in a large number of other Member States, provision of such supplies is restricted to an internal pharmacy.
      
      41.      The Federal Republic of Germany contends in its defence that the contested requirements do not constitute a restriction on
         the free movement of goods and, in the alternative, that such a restriction is justified in order to protect public health.
      
      1.      No restriction on the free movement of goods
      42.      The Federal Republic of Germany states, first, that the contested requirements do not constitute a measure having an equivalent
         effect to a quantitative restriction on imports and, second, that it is not for the Commission to require a Member State,
         under cover of Article 28 EC, to amend legislation that falls within the powers of that Member State.
      
      a)      No measure having an equivalent effect
      43.      The Federal Republic of Germany maintains that the two requirements laid down in Keck and Mithouard, whereby selling arrangements do not fall within Article 28 EC, are met.
      
      44.      On one hand, the contested requirements are applicable without distinction. On the other hand, they do not hinder access to
         the market for medicinal products from other Member States any more than access for domestic medicinal products, on the following
         grounds:
      
      –        Pharmacies established in other Member States, as a rule, do not stock medicinal products covered by a marketing authorisation
         for Germany, so the fact that they do not sell many medicinal products in that Member State is not attributable to Paragraph
         14 of the ApoG.
      
      –        Foreign pharmacies could perfectly well deliver medicinal products to a hospital’s internal pharmacy or to an external pharmacy
         meeting the contested requirements.
      
      –        Foreign pharmacies could conclude a supply contract with a German hospital where the contested requirements are met, which
         presupposes that they are located in the vicinity of that hospital.
      
      –        The sale of medicinal products from other Member States is not affected to a greater extent than the sale of medicinal products
         from regions of Germany that are distant from the hospital being supplied.
      
      –        Article 28 EC does not require pharmacies of other Member States to be able to supply medicinal products directly to the hospitals
         of a Member State. That contention is contradicted by the fact that in many Member States medicinal products may be supplied
         to hospitals only by internal pharmacies and by the case-law whereby a State monopoly in the sale of medicinal products can
         be compatible with Community law. (5)
      
      b)      Article 28 EC does not affect the powers of Member States in public health matters
      45.      The Federal Republic of Germany notes that, according to Article 152(5) EC, European Community action in the field of public
         health must fully respect the responsibilities of the Member States for the organisation and delivery of health services and
         medical care. It states that the contested requirements were laid down under a basic legislative provision, adopted in response
         to the difficulties experienced earlier in supplying medicinal products to hospitals.
      
      2.      Justification on the ground of protecting public health
      46.      The Federal Republic of Germany states that the contested requirements are designed to ensure reliable and high-quality supplies
         by assigning to a single pharmacy responsibility for all the tasks involved in supplying medicinal products to hospitals.
      
      47.      It contends that to separate those tasks and have them coordinated by the hospital management would not ensure such a high
         level of quality. It puts forward the following arguments in that regard.
      
      a)      Separation of provision of normal supplies from provision of emergency supplies 
      48.      The Federal Republic of Germany states that a hospital which takes the decision to obtain its supplies of medicinal products
         from an external pharmacy does so mainly in order to ensure effective provision of supplies with low storage costs and low
         stocks of medicinal products. That hospital will, therefore, order the medicinal products it needs for each patient in the
         quantities required, so there is not really any distinction between emergency supplies and normal supplies, which also require
         speedy and frequent delivery.
      
      49.      Moreover, the selection of medicinal products needed in an emergency requires knowledge of the hospital’s stock and also requires
         a system of coordination if the hospital uses various suppliers.
      
      50.      It is also important that the pharmacist called upon to supply a medicinal product in an emergency should know what other
         medicinal products the patient concerned has taken in order to avoid incompatibilities.
      
      51.      Moreover, the stock of medicinal products needed to supply a hospital is different from that of a ‘normal’ pharmacy. The Federal
         Republic of Germany names several medicinal products which a hospital would need but which a ‘normal’ pharmacy would not keep
         in stock.
      
      52.      Therefore, in the view of that Member State, linking provision of normal supplies to provision of emergency supplies ensures
         that the necessary medicinal products are available and that hospitals have more effective and better targeted provision of
         supplies of medicinal products.
      
      b)      Separation of the provision of normal supplies from the selection of medicinal products
      53.      The Federal Republic of Germany states that the pharmacist responsible for supplying a hospital with the medicinal products
         chosen by its medicines committee may negotiate prices and thus ensure better financial management if he is also in charge
         of selecting them on the market.
      
      c)      Separation of the provision of normal supplies from the checking of a hospital’s stocks of medicinal products
      54.      Assigning the checking of stocks of medicinal products to the pharmacist who supplies such products to the hospital ensures
         better stock control, because that pharmacist knows precisely which products he has supplied.
      
      55.      In connection with such checking, that pharmacist is also better informed by the hospital staff about any issues relating
         to obtaining supplies of medicinal products and to the use, selection and dosage of such products.
      
      d)      The need to advise hospital staff
      56.      Practice shows that even doctors need advice on pharmaceutical matters. Personal contact between a pharmacist and hospital
         teams enables the pharmacist to be a member of the treatment team and to improve the safety of medicinal products while optimising
         the success of the treatment provided. This personal contact cannot be replaced by giving advice over the telephone in individual
         cases. Moreover, the presence of the pharmacist in person is particularly essential in emergency cases.
      
      e)      The synergy between supplying medicinal products, advising hospital staff and checking stocks of medicinal products
      57.      The principle of a single supplier providing supplies of medicinal products to a hospital also gives optimum synergy between
         the supply of medicinal products, advice to hospital staff and the checking of stocks of medicinal products. This principle
         has proved its effectiveness, and has resolved the problems in connection with supplying medicinal products to hospitals which
         existed up to 1980.
      
      V –  Analysis
      A –    Application of Article 28 EC
      58.      As the Commission states first of all, the compatibility with Community law of the contested requirements laid down in Paragraph
         14 of the ApoG must be assessed against the yardstick of the Treaty provisions relating to the free movement of goods.
      
      59.      First, the supplying of medicinal products to hospitals has not been the subject of legislation or even harmonisation within
         the Union. (6) Those conditions should therefore be considered in the light of the freedoms of movement provided by the Treaty. (7)
      
      60.      Second, the contested requirements may affect whether it is possible for a German hospital to purchase medicinal products
         from a pharmacy located in another Member State. Moreover, even though those requirements apply to the service of selling
         between a pharmacy and a German hospital and impose a number of service obligations on the pharmacy, the requirements mainly
         determine the way in which medicinal products may be supplied to a hospital by an external pharmacy. The contested requirements
         are therefore likely to affect mainly the free movement of goods. (8)
      
      B –    The existence of a restriction
      61.      I share the Commission’s view that the contested requirements constitute a measure having an equivalent effect to a quantitative
         restriction on imports prohibited by Article 28 EC.
      
      62.      First, those requirements should be regarded as selling arrangements which affect the marketing of medicinal products from
         other Member States more than the marketing of domestic medicinal products. Second, that view, in my opinion, does not have
         the effect of undermining the powers of the Federal Republic of Germany in public health matters and the provisions of Article
         152 EC. I will deal with these two points in turn.
      
      1.      The existence of a measure having an equivalent effect to a quantitative restriction on imports
      63.      The free movement of goods is a fundamental principle guaranteed by the Treaty, which is expressed in the prohibition, laid
         down in Article 28 EC, on quantitative restrictions on imports between Member States and all measures having an equivalent
         effect. (9) That prohibition of measures having an equivalent effect to quantitative restrictions is very broad since, according to case-law,
         it applies to all legislation of the Member States that is capable of hindering, directly or indirectly, actually or potentially,
         intra-Community trade. (10)
      
      64.      Of course, in Keck and Mithouard the Court limited the scope of that case‑law by excluding from the scope of Article 28 EC measures that relate not to the
         properties of the product concerned but to the selling arrangements, so long as those measures apply irrespective of the product
         concerned and affect in the same manner, in law and in fact, the marketing of domestic products and that of products from
         other Member States. (11)
      
      65.      Like both parties in the case, I am of the view that the contested requirements should be regarded as selling arrangements
         within the meaning of that judgment. Those requirements do not concern the properties of medicinal products but the requirements
         that an external pharmacy must comply with under a contract for the supply of medicinal products concluded with a hospital.
         Those requirements therefore lay down the procedure under which medicinal products may be sold. (12)
      
      66.      It is also common ground that the contested requirements apply indiscriminately, since they make no distinction between pharmacies
         according to the Member State in which they are located. 
      
      67.      However, those requirements hinder the marketing of medicinal products from other Member States more than the marketing of
         domestic medicinal products, for the following reasons.
      
      68.      As the Commission has shown, and as the Federal Republic of Germany has expressly acknowledged, the requirement that an external
         pharmacy should undertake, using its own resources, all aspects of supplying medicinal products can be met only by operators
         who are located in the vicinity of the hospital being supplied.
      
      69.      The contested requirements therefore oblige a pharmacist operating a pharmacy in another Member State who seeks to conclude
         a contract for the supply of medicinal products with a German hospital to relocate his dispensary and set it up in the vicinity
         of that hospital or to open another pharmacy in the area. Such measures, therefore, require foreign pharmacies to bear costs
         and overcome difficulties which are not encountered by operators that are already located in the vicinity of that hospital.
         It can therefore be deduced from this that the effect of the contested requirements is to hinder more seriously the marketing
         of medicinal products from other Member States.
      
      70.      The Federal Republic of Germany raises a number of arguments against this position, which to my mind do not alter it.
      
      71.      That Member State thus contends, first, that a foreign pharmacy can conclude a contract for the supply of medicinal products
         with a German hospital if it meets the contested requirements and, second, that the sale of medicinal products from other
         Member States is not affected to a greater extent than the sale of medicinal products from other parts of Germany that are
         distant from the hospital being supplied.
      
      72.      These arguments do not affect the existence of the barrier resulting from the contested requirements. In TK-Heimdienst, the Court was faced with similar arguments concerning legislation of a Member State which created the same geographical
         partitioning as those requirements. (13) It noted that, for a national measure to be categorised as discriminatory or protective for the purposes of the rules on
         the free movement of goods, it is not necessary for it to have the effect of favouring national products as a whole or of
         placing only imported products at a disadvantage and not national products. (14)
      
      73.      In other words, the contested requirements, like the legislation at issue in TK-Heimdienst, constitute a restriction within the meaning of Article 28 EC because they have the effect of partitioning the market concerned,
         which is, by nature, contrary to the common market, that is to say, an internal market characterised in particular by the
         abolition, as between Member States, of obstacles to the free movement of goods. (15)
      
      74.      The Federal Republic of Germany also disputes the existence of a barrier to the marketing of medicinal products from other
         Member States, on the ground that the pharmacies of those States, as a rule, do not stock medicinal products covered by a
         marketing authorisation for Germany.
      
      75.      That argument does not seem to me to be acceptable either. Certainly, at the present state of Community law no industrially
         produced medicinal product may be placed on the market of a Member State unless a marketing authorisation has been issued
         by the competent authorities of that State or by the European Medicines Agency (formerly the European Agency for the Evaluation
         of Medicinal Products). (16) In order for a pharmacy located in another Member State to be able to supply medicinal products to a German hospital, that
         pharmacy must, therefore, stock a sufficient quantity of medicinal products authorised in Germany.
      
      76.      However, the fact that foreign pharmacies do not, as a rule, stock a sufficient quantity of such medicinal products does not
         remove the restriction in question.
      
      77.      It is settled case-law that Article 28 EC applies to measures that are capable of hindering, directly or indirectly, actually
         or potentially, intra-Community trade. (17) Classification of a measure as a measure having an equivalent effect to a quantitative restriction on imports does not therefore
         require verification that a foreign undertaking has actually been prevented from exporting its products to the Member State
         concerned. It is sufficient that the contested measure is capable of hindering intra-Community trade without it being necessary
         to prove that it has had an appreciable effect on trade within the Union. (18)
      
      78.      That case-law is relevant in the present case because, although medicinal products are not ordinary products in view of their
         effects on human health, they none the less constitute goods for the purposes of Article 28 EC, that is to say, products which
         can be valued in money and which are capable, as such, of forming the subject of commercial transactions. (19) The scope of that article, in so far as they are concerned, is no less than with regard to any other goods within the meaning
         of that article.
      
      79.      Lastly, the Federal Republic of Germany denies the existence of a barrier to the intra-Community trade in medicinal products
         on the ground that a foreign pharmacy could perfectly well deliver medicinal products to a hospital’s internal pharmacy or
         to an external pharmacy meeting the contested requirements. According to that Member State, Article 28 EC does not require
         that pharmacies of other Member States should be able to deliver medicinal products directly to the hospitals of another Member
         State. That view, it says, is in contradiction to the fact that in many Member States only an internal pharmacy is allowed
         to supply a hospital with medicinal products and to the case-law whereby a State monopoly in the trade in medicinal products
         may be compatible with Community law.
      
      80.      Those arguments do not seem to me to be well founded. Certainly, Article 28 EC does not in my view preclude the hospitals
         of Member States being supplied with medicinal products exclusively by an internal pharmacy. It does not in itself require
         Member States to provide that their hospitals should also be able to obtain supplies of medicinal products directly from pharmacies
         located in other Member States. However, the situation is different when a Member State provides in its legislation that its
         hospitals may also obtain such supplies from an external pharmacy, that is to say, from a pharmacy that is a third party in
         relation to the hospital.
      
      81.      From the time that a Member State, in the exercise of its sovereign powers, decides that supplies of medicinal products for
         hospitals may be obtained under a contract with a person who is a third party in relation to a hospital, it opens up that
         activity to the market. It is therefore required to comply with the Community rules relating to the common market and, in
         particular, the fundamental freedoms of movement.
      
      82.      That does not mean, however, that that Member State is deprived of its regulatory powers and that any restriction on the exercise
         of those fundamental freedoms is necessarily contrary to the Treaty. In other words, the Member State is not left in an all
         or nothing situation where either medicinal products must be supplied by an internal pharmacy or they may be supplied from
         a source left to the discretion of each hospital.
      
      83.      The rules surrounding the exercise of its reserved powers mean that if its legislation causes a restriction of one of the
         fundamental freedoms of movement it must be in a position to provide a legitimate reason, given in the Treaty or recognised
         as an overriding reason of public interest, to justify this. A Member State which provides that supplies of medicinal products
         for hospitals may also be obtained from an external pharmacy, and which imposes requirements in this regard that have the
         effect of partitioning the market, must therefore be able to justify the need for such partitioning.
      
      84.      This view also conforms to settled case-law.
      
      85.      According to that case-law, since harmonisation of national laws with regard to the distribution of medicinal products remains
         incomplete, Member States are entitled to adopt measures in this field designed to protect public health. However, the Court
         has consistently held that national rules or practices liable to have a restrictive effect, or having such an effect, on imports
         of medicinal products are compatible with the Treaty only to the extent to which they are necessary for the effective protection
         of human health and life. (20)
      
      86.      Lastly, this view does not conflict with the exercise by Member States of their reserved powers in public health matters and
         the provisions of Article 152 EC.
      
      2.      No effect on the reserved powers of the Member States in public health matters and the provisions of Article 152 EC 
      87.      I cannot agree with the Federal Republic of Germany when it argues that the Commission’s action seeking a declaration that
         the contested requirements are contrary to Article 28 EC is a way of circumventing the limits of Community action in the field
         of public health laid down in Article 152 EC.
      
      88.      That article determines the legislative powers of the Community in public health matters. As the Community only has the powers
         that have been conferred on it, the High Contracting Parties limited its powers in that field by providing in that article
         that it may only complement the Member States’ action and that its action must fully respect the responsibilities of the Member
         States for the delivery of health services and medical care.
      
      89.      However, that limitation on the Community’s legislative powers in the field of public health does not affect the Member States’
         obligation, confirmed by settled case-law, to comply with the Treaty rules, in particular the freedoms of movement, when they
         exercise their reserved powers. (21) In other words, Article 152 EC cannot have the effect of excluding public health from the scope of the Treaty rules on freedom
         of movement.
      
      90.      The Commission, which has the task under Article 211 EC of ensuring that the provisions of the Treaty are applied, is therefore
         acting quite correctly if it brings proceedings against a Member State for failure to fulfil its obligations, where it considers
         that the legislation of that State concerning the provision of supplies of medicinal products to hospitals is affecting the
         free movement of goods.
      
      91.      Such action does not constitute misuse of Article 152 EC because it does not allow the Commission or the Court to take the
         place of the Member State concerned and impose one outcome rather than another on the latter. It cannot therefore be compared
         to the exercise of a legislative power. It merely has the effect of circumscribing the exercise by that State of its reserved
         powers in public health matters by specifying the limits which stem from the freedoms of movement which all the Member States
         have undertaken to respect by entering into and then ratifying the Treaty. (22)
      
      92.      It is in the context of examining the justification for the contested requirements that the powers of the Federal Republic
         of Germany in public health matters will be taken into account, in particular under the case-law whereby, in the absence of
         common or harmonised rules, it is for each Member State to decide on the degree of protection which it wishes to afford to
         public health and on the way in which that protection is to be achieved, while observing the principle of proportionality. (23) In particular, it is in that context that the Federal Republic of Germany’s argument that in a number of Member States medicinal
         products are supplied to hospitals exclusively by internal pharmacies will be taken into consideration. (24)
      
      93.      Therefore, as the Commission contends, since the contested requirements constitute a restriction on the free movement of goods
         within the meaning of Article 28 EC they should be declared incompatible with Community law if that restriction is not justified
         on one of the grounds laid down in Article 30 EC or by an overriding reason of public interest. I shall now demonstrate why
         that restriction is justified.
      
      C –    Justification for the restriction
      94.      The Federal Republic of Germany contends that the restriction on intra‑Community trade in medicinal products caused by the
         contested requirements is justified in order to protect public health. Those requirements are designed to ensure that the
         provision of supplies of medicinal products to hospitals from external pharmacies is reliable and of high quality.
      
      95.      I consider that justification to be acceptable in the light of the arguments put forward by the parties.
      
      96.      According to case-law, a restriction on the free movement of goods may be justified on one of the grounds referred to in Article
         30 EC or by an overriding reason of public interest, provided that the measure concerned is appropriate for securing the attainment
         of the objective pursued and does not go beyond what is necessary in order to attain it. (25)
      
      97.      The first of these requirements does not raise any difficulties. The protection of public health ranks foremost among the
         interests protected by Article 30 EC. (26) Moreover, the Commission does not dispute that the contested requirements, which are designed to assign to a single supplier
         all aspects of supplying medicinal products to hospitals, are appropriate for ensuring reliable and high-quality supplies
         and hence for protecting public health.
      
      98.      The second requirement is the one at the centre of this dispute.
      
      99.      A restriction on intra-Community trade in medicinal products can be justified in order to protect public health only if the
         measure in question observes the principle of proportionality. Under that principle, in order for the ground of justification
         to apply, it is necessary that the protection of human health and life cannot be achieved by less extensive prohibitions or
         restrictions, or by prohibitions or restrictions having less effect on intra-Community trade. (27) Moreover, as the Commission quite rightly points out, it is for the Member State whose legislation is at issue to demonstrate
         that that principle is observed. (28)
      
      100. Unlike the Commission, I think that the explanations provided by the Federal Republic of Germany in that regard are convincing.
         I base my view on the following three considerations.
      
      101. First, it is for the Member States, within the limits imposed by the Treaty, to decide what degree of protection of public
         health they wish to ensure. (29)
      
      102. The Federal Republic of Germany is therefore entitled to make provision that in any hospital a pharmacist must assist in the
         distribution of medicinal products to hospital patients, within the context of providing advice on a regular basis to hospital
         staff and, where appropriate, when medical treatment must be administered in an emergency.
      
      103. It should be noted in that regard that the work of a pharmacist does not consist solely in distributing medicinal products.
         Under the provisions of Article 45 of Directive 2005/36, which repeated Article 2 of Council Directive 85/432/EEC, (30) it also includes the provision of information and advice on medicinal products.
      
      104. Therefore, even though, as the Commission observes, it is the doctor who assumes responsibility in individual cases for the
         use of the medicinal products he has prescribed, it is still the case that the pharmacist has a competence of his own, namely
         to give information and advice. On that basis he is required to provide appropriate advice for the proper use of those medicinal
         products and must, where necessary, point out any error in the prescription. That particular competence of pharmacists provides
         justification for the monopoly in the distribution of medicinal products to the public which they enjoy in several Member
         States.
      
      105. A Member State is entitled, in the exercise of its sovereign powers in the field of public health, to decide that such advice
         and supervision on the part of a pharmacist must also be assured for all hospital patients, irrespective of the type of hospital
         and its specialisations. 
      
      106. The way in which this assurance is provided clearly varies according to the size of each hospital and its specialisations.
         It may be assumed that it is provided to a lesser extent in a hospital specialising in geriatric medicine, caring for elderly
         people whose needs for medicinal products are stable and well known to the medical staff, than in a hospital specialising
         in cardiovascular surgery or dealing with medical emergencies.
      
      107. However, in all situations I am of the view that the effective way of carrying out this duty of giving advice and supervising
         the proper use of medicinal products requires the pharmacist to go to the hospital in person on a regular basis and according
         to a schedule worked out for each hospital.
      
      108. Unlike the Commission, I consider that the situation is not comparable to that of distributing medicinal products to the public.
         In the latter situation, a patient who has been prescribed treatment by his doctor and who then goes to his pharmacist is
         in a position to understand and put into practice the advice the pharmacist gives him. On the other hand, in a hospital, medicinal
         products are administered by the nursing staff and the patient is most often in a completely passive situation.
      
      109. Consequently, in order for the pharmacist to carry out this duty to give advice and supervise the proper use of medicinal
         products in a hospital environment effectively, he must be able to familiarise himself with each patient’s situation. The
         pharmacist, as the Federal Republic of Germany contends, must form an integral part of the treatment team. Otherwise, if intervention
         by the pharmacist were to be limited to providing advice over the telephone, his role would be restricted merely to cases
         in which a hospital doctor or a member of the nursing team had doubts about the use of a medicinal product.
      
      110. If an external pharmacist is to carry out this duty of providing advice and supervision, he must therefore be present at the
         hospital in person on a regular basis and be available in an emergency. The logical assumption therefore is that he carries
         on his business in the vicinity of the hospital, since, as the Commission points out, he must also be present in his dispensary
         in order to be able to attend to the public.
      
      111. Second, the Federal Republic of Germany is correct, in my view, in arguing that it is difficult to separate the selection
         of medicinal products from the provision of advice to hospital staff.
      
      112. The list of medicinal products authorised in a Member State is much more extensive than the list of medicinal products that
         a hospital actually needs. A hospital’s needs are limited to the diseases it is called upon to treat. Moreover, a large number
         of medicinal products have identical or comparable properties. Consequently, any hospital, for the sake of good management,
         must select the medicinal products needed for its areas of specialisation and avoid unnecessary ordering of a number of medicinal
         products having the same properties.
      
      113. The Commission does not dispute that in order to select its medicinal products a hospital needs the help of a pharmacist with
         a detailed knowledge of what that hospital requires. It is therefore the pharmacist whose job it is to provide advice on the
         use of medicinal products within the hospital who would appear to be the best person to be aware of precisely what the hospital’s
         needs are and to take part in the process of selecting medicinal products.
      
      114. Third, I share the Republic of Germany’s opinion that the functions of supplying medicinal products and checking a hospital’s
         stocks of medicinal products, on the one hand, and those of advising hospital staff and selecting medicinal products, on the
         other hand, cannot be separated either. I base my view on two complementary reasons, the first functional and the second economic.
      
      115. At the functional level, I share the view of the Federal Republic of Germany that the pharmacist who would appear to be the
         best placed to provide advice in order to ensure the proper use of medicinal products and supervise that use is the one who
         has supplied or dispensed them.
      
      116. Similarly, the external pharmacist who would appear to be the best placed to supply a hospital with all the necessary medicinal
         products and to keep in his dispensary adequate stocks to meet the hospital’s needs in all circumstances would appear to be
         the person who provides advice to the medical staff and takes part in the process of selecting medicinal products, since he
         is well acquainted with the needs of the hospital to be supplied.
      
      117. Like the Federal Republic of Germany, I am of the view that those different functions are complementary and that, from the
         functional point of view, it is more rational to assign them to the same professional.
      
      118. This view also applies as regards the function of checking a hospital’s stocks of medicinal products. As the Federal Republic
         of Germany explains, a hospital which takes the decision to obtain its supplies from an external pharmacy does so primarily
         in order to free itself of the burden of having to stock large quantities of medicinal products on its own premises. It is
         therefore the external pharmacy which has to have sufficient stocks of medicinal products to be able to meet the needs of
         that hospital in all circumstances. Consequently, it is that pharmacy which is best placed to carry out regular checks on
         the quality and storage of such products.
      
      119. As the Federal Republic of Germany states, there is a synergy between supplying medicinal products, advising hospital staff
         and checking stocks.
      
      120. At the economic level, it is important to take into consideration the fact that the activity of providing advice forms an
         integral part of the pharmacist’s job when he issues a medicinal product to a patient. It does not involve additional payment.
      
      121. Where a hospital takes the decision to obtain all its supplies of medicinal products from an external pharmacy, the staff
         of that pharmacy must undertake the task of providing advice within that hospital, including in emergencies, with the availability
         constraints which that involves, and the other tasks of selecting medicinal products and checking stocks of medicinal products
         within the dispensary and at the hospital, because those tasks may be regarded as forming an integral part of the service
         of supplying medicinal products. The cost of those additional tasks is included in the selling price of the medicinal products.
         They should not therefore give rise to any special payment. However, it is difficult to see how this could be done if the
         external pharmacist responsible for carrying out those additional tasks were not the one supplying the hospital with all its
         medicinal products.
      
      122. In reality the hospital concerned would be forced to employ a pharmacist to carry out these tasks specially, which, because
         of the additional charges inherent in such recruitment, would offset to a great extent the advantage of using an external
         pharmacist.
      
      123. Of course, in principle, aims of a purely economic nature cannot justify a barrier to the fundamental principle of the free
         movement of goods. (31) However, in the field of public health the Court has accepted that derogations from that principle may be allowed where interests
         of an economic nature concern maintaining a balanced medical and hospital service open to all, (32) in particular the maintenance of treatment capacity or medical competence on national territory. (33)
      
      124. It has acknowledged in that regard that a Member State must be able to plan the number of hospitals, their geographical distribution,
         the way in which they are organised and the facilities with which they are equipped, and also the nature of the medical services
         which they are able to offer. Such planning, as a general rule, ensures that there is sufficient and permanent access to a
         balanced range of high-quality hospital treatment in the Member State concerned. It also assists in controlling costs and
         preventing, as far as possible, any wastage of financial, technical and human resources. (34)
      
      125. Such wastage, in the view of the Court, would be all the more damaging because it is generally recognised that the hospital
         care sector generates considerable costs and must satisfy increasing needs, while the financial resources which may be made
         available for healthcare are not unlimited, whatever the mode of funding applied. (35)
      
      126.  I am of the view that those considerations may be applied to the present case and that the Federal Republic of Germany was
         right to state that supplying a hospital with medicinal products could not be separated from the other tasks of advising hospital
         staff, selecting medicinal products and checking the hospital’s stocks of medicinal products in order to ensure a high level
         of protection for public health while maintaining a rational supply of healthcare.
      
      127. Moreover, I find nothing in the documents before the Court to suggest that the contested requirements constitute a means of
         arbitrary discrimination or a disguised restriction on trade between Member States, within the meaning of the second sentence
         of Article 30 EC, as interpreted in Henn and Darby. (36) It does not appear that the public health ground relied on to justify the contested requirements has been diverted from its
         purpose and used in such a way as to discriminate against goods originating in other Member States or indirectly to protect
         certain national products.
      
      128. Hence, the requirement for a single supplier to take on all the aspects of supplying medicinal products to a hospital and
         the requirement of geographical proximity stemming from this are, in my view, justified on the ground of protection of public
         health. It also seems to me that the fact that in a number of Member States medicinal products are supplied to hospitals exclusively
         by internal pharmacies confirms this view.
      
      129. Against this, the Commission also argues that it does not object to a hospital being able to make such requirements. It considers,
         however, that hospitals should be able to decide themselves whether to assign to a single pharmacy provision of normal supplies,
         provision of emergency supplies, checks on stocks of medicinal products and provision of advice for hospital staff.
      
      130. I do not share that point of view. As I said above, a Member State is entitled to determine the level of health protection
         it intends to provide in its territory. The Federal Republic of Germany is therefore entitled to require that the same level
         of protection is ensured in all hospitals.
      
      131. I therefore propose that the Court should dismiss the Commission’s action for failure to fulfil obligations as unfounded and
         order the Commission to pay the costs, under Article 69(2) of the Rules of Procedure.
      
      VI –  Conclusion
      132. In view of the foregoing considerations, I propose that the Court should dismiss the present action for failure to fulfil
         obligations as unfounded and order the Commission of the European Communities to pay the costs.
      
      1  –	Original language: French.
      
      2 –	Joined Cases C‑267/91 and C‑268/91 [1993] ECR I‑6097, paragraph 16.
      
      3 –	The ‘ApoG’.
      
      4 –	Case C‑322/01 [2003] ECR I‑14887, paragraph 113.
      
      5 –	The Federal Republic of Germany cites Case C‑438/02 Hanner [2005] ECR I‑4551.
      
      6 –	The movement of medicinal products within the Union was facilitated by the adoption of a number of directives which harmonised
         the conditions for issuing a national marketing authorisation and the rules applying to wholesale distribution, classification
         of medicinal products, labelling and advertising. The content of those directives was combined in Directive 2001/83/EC of
         the European Parliament and of the Council of 6 November 2001 on the Community code relating to medicinal products for human
         use (OJ 2001 L 311, p. 67). The Community legislature also instituted a Community marketing authorisation, valid in all Member
         States, which is currently governed by Regulation (EC) No 726/2004 of the European Parliament and of the Council of 31 March
         2004 laying down Community procedures for the authorisation and supervision of medicinal products for human and veterinary
         use and establishing a European Medicines Agency (OJ 2004 L 136, p. 1). Lastly, the free movement of medicinal products was
         also facilitated by the adoption in 1985 of directives laying down the minimum level of training for pharmacists and the range
         of occupational activities they may pursue. Those directives were replaced by Directive 2005/36/EC of the European Parliament
         and of the Council of 7 September 2005 on the recognition of professional qualifications (OJ 2005 L 255, p. 22).
      
      7 –	See, to that effect, Deutscher Apothekerverband, paragraph 102.
      
      8 –	See, to that effect, Case C‑36/02 Omega [2004] ECR I‑9609, paragraph 26 and case-law cited.
      
      9 –	Case C‑147/04 De Groot en Slot Allium and Bejo Zaden [2006] ECR I‑245, paragraph 70.
      
      10 –	Case C‑170/04 Rosengren and Others [2007] ECR I‑4071, paragraphs 31 and 32.
      
      11 –	Keck and Mithouard, paragraph 16. 
      
      12 –	See, to that effect, Case C‑254/98 TK-Heimdienst [2000] ECR I‑151, paragraph 24.
      
      13–	The legislation provided that bakers, butchers and grocers could make sales on rounds in a given administrative district
         only if they also traded from a permanent establishment where they offered for sale the same goods as they did on rounds,
         located in that administrative district or an adjacent municipality or, in some circumstances, in another Member State.
      
      14 –	TK-Heimdienst, paragraph 27. That interpretation of the scope of Article 28 EC had already been given in Joined Cases C-1/90 and C-176/90
         Aragonesa de Publicidad Exterior and Publivía [1991] ECR I‑4151, paragraph 24.
      
      15 –	Article 3(1)(c) EC.
      
      16 –	Articles 2 and 6(1) of Directive 2001/83.
      
      17 –	See, in particular, Deutscher Apothekerverband, paragraph 66 and case-law cited.
      
      18 –	Case C‑166/03 Commission v France [2004] ECR I‑6535, paragraph 15.
      
      19 –	Case 7/68 Commission v Italy [1968] ECR 423, 428.
      
      20 –	Case 215/87 Schumacher [1989] ECR 617, paragraph 18, and Deutscher Apothekerverband, paragraph 104.
      
      21 –	See, in particular, with regard to direct taxation, Case C‑196/04 Cadbury Schweppes and Cadbury Schweppes Overseas [2006] ECR I‑7995, paragraph 40; with regard to criminal matters, Case 186/87 Cowan [1989] ECR 195, paragraph 19; and with regard to public security, Case C‑285/98 Kreil [2000] ECR I‑69, paragraphs 15 and 16.
      
      22 –	Case 6/64 Costa [1964] ECR 585, 593 and 594.
      
      23 –	See, to that effect, Aragonesa de Publicidad Exterior and Publivía, paragraph 16.
      
      24 –	This way of reasoning applies with regard to all the freedoms of movement and all economic activities. For example, in
         the field of betting the Court accepted that moral, religious or cultural factors, as well as the morally and financially
         harmful consequences for the individual and for society associated with betting and gaming, might serve to justify a margin
         of discretion for the national authorities, sufficient to enable them to determine what is required in order to ensure consumer
         protection and the preservation of public order. However, it was in the context of considering justification of the restriction
         on freedom of establishment and freedom to provide services caused by the national legislation in question that the Court
         took into consideration that discretion of the Member States (Joined Cases C‑338/04, C‑359/04 and C‑360/04 Placanica and Others [2007] ECR I‑1891, paragraphs 47 and 48).
      
      25 –	Case C‑254/05 Commission v Belgium [2007] ECR I‑4269, paragraph 33 and case-law cited.
      
      26 –	Deutscher Apothekerverband, paragraph 103.
      
      27 –	Rosengren and Others, paragraph 43.
      
      28 –	Ibid., paragraph 50.
      
      29 –	Deutscher Apothekerverband, paragraph 103 and case-law cited.
      
      30 –	Directive of 16 September 1985 concerning the coordination of provisions laid down by law, regulation or administrative
         action in respect of certain activities in the field of pharmacy (OJ 1985 L 253, p. 34).
      
      31 –	Case C‑120/95 Decker [1998] ECR I‑1831, paragraph 39.
      
      32 –	Case C‑444/05 Stamatelaki [2007] ECR I‑3185, paragraph 31 and case-law cited.
      
      33 –	Case C‑385/99 Müller-Fauré and van Riet [2003] ECR I‑4509, paragraph 67 and case-law cited.
      
      34 –	Ibid., paragraphs 77 to 80.
      
      35 –	Ibid., paragraph 80.
      
      36 –	Case 34/79 [1979] ECR 3795, paragraph 21.