1. This reference for a preliminary ruling concerns the interpretation of Article 94(1) of 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), as amended by Directive 2004/27/EC of the European Parliament and of the Council of 31 March 2004 (OJ 2004 L 136, p. 34) (‘Directive 2001/83’).
2. The reference was made in proceedings between the Association of the British Pharmaceutical Industry (‘the ABPI’) and the Medicines and Healthcare Products Regulatory Agency (‘the MHPR’), an executive agency of the Department of Health, concerning the legality of the MHPR’s position that Article 94(1) of Directive 2001/83 does not apply to a financial incentive scheme implemented by the public authorities concerning the prescription of specific named medicinal products. Legal context European Union law
3. Recitals 2, 47, 50 and 52 in the preamble to Directive 2001/83 are worded as follows: ‘(2) The essential aim of any rules governing the production, distribution and use of medicinal products must be to safeguard public health. … (47) The advertising of medicinal products to persons qualified to prescribe or supply them contributes to the information available to such persons. Nevertheless, this advertising should be subject to strict conditions and effective monitoring, referring in particular to the work carried out within the framework of the Council of Europe. … (50) \tPersons qualified to prescribe medicinal products must be able to carry out these functions objectively without being influenced by direct or indirect financial inducements. … (52) \tPersons qualified to prescribe or supply medicinal products must have access to a neutral, objective source of information about products available on the market. Whereas it is nevertheless for the Member States to take all measures necessary to this end, in the light of their own particular situation.’
4. Article 4(3) of the directive states: ‘The provisions of this Directive shall not affect the powers of the Member States’ authorities either as regards the setting of prices for medicinal products or their inclusion in the scope of national health insurance schemes, on the basis of health, economic and social conditions.’
5. Title VIII of the directive, entitled ‘Advertising’, contains Articles 86 to 88 thereof, whereas Title VIIIa of the directive, entitled ‘Information and advertising’, contains Articles 88a to 100.
6. Article 86(1) of Directive 2001/83 is worded as follows: ‘For the purposes of this Title, “advertising of medicinal products” shall include any form of door-to-door information, canvassing activity or inducement designed to promote the prescription, supply, sale or consumption of medicinal products; it shall include in particular: - the advertising of medicinal products to the general public, - advertising of medicinal products to persons qualified to prescribe or supply them, … - the provision of inducements to prescribe or supply medicinal products by the gift, offer or promise of any benefit or bonus, whether in money or in kind, except when their intrinsic value is minimal, …’
7. Article 88(1) and (4) of the directive provides: ‘1. Member States shall prohibit the advertising to the general public of medicinal products which: (a) are available on medical prescription only, in accordance with Title VI; … 4. The prohibition contained in paragraph 1 shall not apply to vaccination campaigns carried out by the industry and approved by the competent authorities of the Member States.’
8. Article 94(1) and (3) of the directive states: ‘1. Where medicinal products are being promoted to persons qualified to prescribe or supply them, no gifts, pecuniary advantages or benefits in kind may be supplied, offered or promised to such persons unless they are inexpensive and relevant to the practice of medicine or pharmacy. … 3. Persons qualified to prescribe or supply medicinal products shall not solicit or accept any inducement prohibited under paragraph 1 …’
9. Article 95 of the directive adds: ‘The provisions of Article 94(1) shall not prevent hospitality being offered, directly or indirectly, at events for purely professional and scientific purposes; such hospitality shall always be strictly limited to the main scientific objective of the event; it must not be extended to persons other than health-care professionals.’
10. Article 99 of Directive 2001/83 provides: ‘Member States shall take the appropriate measures to ensure that the provisions of this Title are applied and shall determine in particular what penalties shall be imposed should the provisions adopted in the execution of [this] Title be infringed.’ National law
11. Regulation 21(1) and (5) of the Medicines (Advertising) Regulations 1994, which implements the provisions of European Union law cited in paragraphs 4 to 9 above, provides: ‘(1) Subject to paragraphs (2) and (4), where relevant medicinal products are being promoted to persons qualified to prescribe or supply relevant medicinal products, no person shall supply, offer or promise to such persons any gift, pecuniary advantage or benefit in kind, unless it is inexpensive and relevant to the practice of medicine or pharmacy. … (5) No person qualified to prescribe or supply relevant medicinal products shall solicit or accept any gift, pecuniary advantage, benefit in kind, hospitality or sponsorship prohibited by this regulation.’
12. Under regulation 23(1) of the 1994 Regulations, breach of regulation 21(1) thereof constitutes a criminal offence carrying the sanction of a fine and/or imprisonment for a term not exceeding two years.
13. According to information provided by the referring court, under the National Health Service Act 2006 the Secretary of State in England and Wales is responsible for the provision of a comprehensive health service which is designed to secure improvements in physical and mental health of people and to prevent, diagnose and treat illnesses. To that end, in England, medical services are funded locally by Primary Care Trusts (‘PCTs’) and, in Wales, by Local Health Boards (‘LHBs’). The facts in the main proceedings and the question referred
14. In England and in Wales general practitioners and other health-care professionals are granted specific powers to write prescriptions and, if they issue prescriptions funded by the National Health Service, they must comply with National Health Service rules and prescription controls. They must also comply with professional codes of conduct issued by the General Medical Council.
15. As part of an overall policy seeking to reduce the costs of their branches dealing with medicinal products, the PCTs and LHBs have introduced schemes aimed at medical practices inducing them with financial incentives to prescribe to their patients either specific named medicinal products or generic medicinal products.
16. In the main proceedings, only financial incentive schemes seeking the prescription of specific named medicinal products are at issue.
17. In relation to those products, the scheme seeks to encourage doctors, in developing their therapeutic strategies, to favour the prescription of certain medicinal products belonging to the same therapeutic class as those previously prescribed or those which might have been prescribed to patients if the incentive scheme did not exist, but which do not contain the same active substance. Therefore doctors are encouraged, first, to change the treatment of their patients as regards existing prescriptions and, second, to favour a treatment based on a certain active substance rather than another when prescribing medicinal products for a given condition for the first time. The PCTs and LHBs establish therapeutic equivalence of medicinal products in the same therapeutic class in accordance with the guidance of the National Institute for Health and Clinical Excellence in particular. The incentive schemes at issue in this case primarily concern the prescription of statins, which are cholesterol reducing substances.
18. Financial inducements are calculated in accordance with two separate mechanisms. Under the first, medical practices accumulate points for compliance with a number of prescribing targets which may include increasing the proportion of prescriptions for a specific named medicinal product (expressly or implicitly being prescribed instead of other medicinal products in the same therapeutic class). The level of payment consequently reflects the total number of points obtained. The second mechanism is based on single targets in that payments are made for meeting a single target, such as increasing the overall proportion of prescriptions for a specific named medicinal product, or on the basis of the number of patients whose established treatment has been altered in order to prescribe the medicinal product or products favoured by the competent national authorities.
19. Payments received by medical practices add to the income that they derive from consultations and, in the end, benefit the general practitioners who share in the profits made by those practices.
20. That financial incentive scheme is designed to reduce the expenditure of the PCTs and LHBs in their ‘medicinal products’ branches in so far as prescription of the cheapest medicinal products in the appropriate therapeutic classes is favoured. However, in certain cases, another medicinal product in the same therapeutic class might be better suited to the treatment of a particular patient. Thus, switching the prescribed medication to another based on a different active substance might, in certain cases, itself have adverse consequences for the patient.
21. On 3 July 2006 the ABPI, of which 70 national and international pharmaceutical companies operating in the United Kingdom are members, wrote to the MHPR, whose functions include ensuring compliance with European Union and domestic legislation on the advertising and promotion of medicinal products. In its letter, the ABPI expressed its concerns about, and legal objections to, certain prescribing incentive schemes for specific named medicinal products set up by the PCTs and LHBs.
22. In its reply of 16 October 2006 the MHPR, which had previously held a different view, indicated that it now took the view that Article 94 of Directive 2001/83 covered only promotion or incentive schemes of a commercial nature. In its view, while Article 94 of the directive was indeed adopted in order to prevent commercial organisations from influencing the judgment of doctors when prescribing medicinal products, that does not, however, affect the fact that Article 4(3) of the directive clearly recognises that the Member States need to, and are permitted to, take steps to ensure that publicly funded costs are controlled.
23. Since the ABPI disputed that interpretation of Article 94 of Directive 2001/83, it brought an action before the referring court seeking judicial review of the MHPR’s position. In its action the ABPI states, inter alia, that the financing of medical treatment differs from Member State to Member State, sometimes being financed by public funds and sometimes by private funds. In its view, excluding public authorities which offer health services from the scope of that directive would effectively mean that different rules would apply depending on whether the service provider’s purpose is commercial or not, and would end up affecting the internal market for those services in the European Union.
24. Considering that an interpretation of Article 94 was necessary in order to give judgment in the case, the High Court of Justice of England and Wales, Queen’s Bench Division (Administrative Court), decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling: ‘Does Article 94(1) of Directive 2001/83/EC preclude a public body forming part of a national public health service, in order to seek to reduce its overall expenditure on medicines, from implementing a scheme which offers financial incentives to medical practices (which may in turn provide a financial benefit to the prescribing doctor) to prescribe a specific named medicine supported by the incentive scheme that is either: (a) a different prescription medicine to the medicine previously prescribed by the doctor to the patient; or (b) a different prescription medicine to that which otherwise might have been prescribed to the patient but for the incentive scheme, where such a different prescription medicine is from the same therapeutic class of medicines used for treatment of the patient’s particular condition?’ Consideration of the question referred Observations submitted to the Court
25. The ABPI and the European Commission submit that Article 94(1) of Directive 2001/83 also applies to national authorities. Consequently, that provision precludes a public body forming part of a national public health service from implementing a scheme which offers financial inducements to medical practices in order that the doctors in those practices prescribe a specific named medicinal product, even if the aim of that scheme is to reduce overall public expenditure on medicinal products.
26. By contrast, the United Kingdom, Czech, Estonian, Spanish, French and Netherlands Governments consider that, as is apparent from the broad logic of Directive 2001/83 and since Article 152(5) EC expressly provides that European Community action in the field of public health is to fully respect the responsibilities of the Member States for the organisation and delivery of health services and medical care, Article 94 of the directive does not cover the competent national public health authorities. In addition, even if the prohibition in Article 94 were applicable to such authorities, a financial incentive scheme set up by them would fall within the derogation provided for in Article 4(3) of the directive since such a scheme aims to ensure access for all to a sufficient quantity of medicinal products at a reasonable price. The Court’s response
27. Article 94(1) of Directive 2001/83 provides, in relation to persons qualified to prescribe or supply medicinal products, that no gifts, pecuniary advantages or benefits in kind may be supplied, offered or promised to such persons unless they are inexpensive and relevant to the practice of medicine or pharmacy.
28. As is stated in that provision, that prohibition applies ‘[w]here medicinal products are being promoted’ to doctors or pharmacists.
29. Consequently, as is apparent from the broad logic of Directive 2001/83, that prohibition, which concerns primarily the pharmaceutical industry when promoting the medicinal products which it markets, seeks to prevent promotional practices which may induce health-care professionals to act in accordance with their economic interests when prescribing or supplying medicinal products. The provision thus seeks to promote medical and pharmacological practices which comply with rules of professional conduct.
30. In the case of advertising of medicinal products, the Court has already held that, even where it is carried out by an independent third party outside any commercial or industrial activity, such advertising is liable to harm public health, the safeguarding of which is the essential aim of Directive 2001/83, and that, consequently, dissemination by a third party of information about a medicinal product, including its therapeutic or prophylactic properties, may be regarded as advertising within the meaning of Article 86(1) of that directive, even though the third party in question is acting on his own initiative and completely independently, de jure and de facto , of the manufacturer and the seller of such a medicinal product (Case C‑421/07 Damgaard [2009] ECR I‑0000, paragraphs 22 and 29).
31. However, such reasoning cannot be transposed to cases where information about a medicinal product is disseminated by the public authorities themselves, for example where an epidemic or pandemic occurs. It is apparent, in particular, from Article 88(4) of Directive 2001/83 that the prohibition on advertising medicinal products to the general public, as laid down in Article 88(1), does not apply to vaccination campaigns ‘carried out by the industry’ when they are approved by the competent authorities of the Member States.
32. Similarly, as regards financial inducements to prescribe medicinal products, although the prohibition in Article 94(1) of Directive 2001/83 may admittedly apply to independent third parties who are not acting for commercial or industrial purposes or not for profit-making purposes, such a prohibition cannot apply to national public health authorities, which are responsible, inter alia, (i) for ensuring that the existing rules, of which that directive forms part, are applied and (ii) for defining the priorities for action in relation to public health policy, in particular so far as concerns the rationalisation of the public expenditure allocated to that policy which is precisely what they are responsible for.
33. In general terms, the health policy defined by a Member State and the public expenditure devoted to it do not pursue any profit-making or commercial aim. Since a financial incentive scheme such as the one at issue in the main proceedings forms part of such a policy, it cannot be regarded as falling within the commercial promotion of medicinal products.
34. In addition, while, in the case which gave rise to the judgment in Damgaard , the dissemination by an independent third party of information about a medicinal product was liable to harm public health, the safeguarding of which is the essential aim of Directive 2001/83, such a risk cannot be demonstrated in the case of financial inducements made by the public health authorities. The very nature of the task of those authorities is to supervise public health, for which they assume political responsibility and they are thus in charge of evaluating the therapeutic value of the medicinal products which they authorise to be marketed.
35. In those circumstances, it is permissible for those authorities, in the exercise of the responsibilities which they assume, to determine, on the basis of evaluations of the therapeutic qualities of medicinal products by reference to their cost for the public budget, whether, in order to treat certain conditions, certain medicinal products containing a given active substance are, from the point of view of public finances, preferable to other medicinal products containing a different active substance, but falling within the same therapeutic class.
36. In accordance with Article 168(7) TFEU, European Union law does not detract from the power of the Member States to organise their social security systems and to adopt, in particular, measures intended to govern the consumption of pharmaceutical products in order to promote the financial stability of their health‑care insurance schemes (Joined Cases C-352/07 to C-356/07, C-365/07 to C-367/07 and C-400/07 A. Menarini Industrie Farmaceutiche Riunite and Others [2009] ECR I‑0000, paragraph 19 and the case‑law cited).
37. However, it should be noted that, in order to ensure the effectiveness of Council Directive 89/105/EEC of 21 December 1988 relating to the transparency of measures regulating the prices of medicinal products for human use and their inclusion in the scope of national health insurance systems (OJ 1989 L 40, p. 8), professionals in the pharmaceutical industry, whether or not the prescription of their medicinal products is subject to financial inducements, must also be able to verify that the financial incentive scheme implemented by the public authorities is based on objective criteria and that there is no discrimination between national medicinal products and those from other Member States (see, to that effect, Case C‑229/00 Commission v Finland [2003] ECR I‑5727, paragraph 39, and A. Menarini Industrie Farmaceutiche Riunite and Others , paragraph 28).
38. Consequently, even though Directive 89/105 has as an underlying principle the idea of minimum interference in the organisation by Member States of their domestic social security policies (Case C‑245/03 Merck, Sharp & Dohme [2005] ECR I‑637, paragraph 27), national public health authorities which adopt a financial incentive scheme for the prescription of specific named medicinal products are required in particular to make such a scheme public and to make available to health-care professionals and professionals in the pharmaceutical industry the evaluations establishing the therapeutic equivalence of the active substances available belonging to the therapeutic class covered by that scheme.
39. Finally, it must be noted that such practices entailing public financial incentives for the prescription of medicinal products containing certain active substances cannot compromise the objectivity with which, as noted in recital 50 in the preamble to Directive 2001/83, a doctor must act when issuing a prescription for a given patient.
40. First, a prescribing doctor is required, from the point of view of professional conduct, not to prescribe a given medicinal product if it is not fitting for the therapeutic treatment of his patient, despite the existence of public financial inducements for its prescription.
41. Second, all doctors are authorised to practice only under the supervision of the public health authorities, which the latter carry out either directly or indirectly by appointing professional organisations to that effect, such as, in the United Kingdom, the General Medical Council. In performing their task of supervising and monitoring the activity of doctors, the public authorities or delegated professional organisations are authorised to provide doctors with recommendations relating to the prescription of medicinal products, without such recommendations being able to prejudice the objectivity of prescribing doctors for the purposes of recital 50 in the preamble to Directive 2001/83.
42. In the light of the above, the answer to the question referred is that Article 94(1) of Directive 2001/83 must be interpreted as not precluding financial incentive schemes, such as the one at issue in the main proceedings, implemented by the national public health authorities in order to reduce their public-health expenditure and designed to encourage, for the purpose of treating certain conditions, the prescription by doctors of specific named medicinal products containing an active substance which is different from the active substance of the medicinal product which was previously prescribed or which might have been prescribed but for such an incentive scheme. Costs
43. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.