CJEU balances strict obligations for wholesalers of medicines with proportional penalties

On 21 September 2023, the EU Court of Justice (‘CJEU’) handed down its ruling in the Apotheke B. case (C-47/22), and it is a good example of the high threshold set by the EU Court of Justice to uphold the Community Code’s main aim of protecting public health.

First and foremost, the CJEU made it very clear that wholesalers (i) can only source their products from other authorised wholesalers or manufacturers and (ii) have an obligation to ensure that the national inspection services are provided with the requested information.

Additionally, EU law’s influence in this field even extends to issues governed, in principle, only by national law, such as the implementation of penalties provided for by the Community Code. The CJEU indeed clarified that the national authorities are obliged to respect the general principle of proportionality and thereby heed the Court’s corresponding guidance when carrying out their assessment.

Factual background

Apotheke B. was an Austrian company operating a public pharmacy and the holder of a distribution authorisation for the wholesaling of medicinal products. After an inspection and a subsequent investigation, the Austrian authorities uncovered several irregularities. For example, Apotheke B. had purchased, on several occasions, medicinal products from other pharmacies that did not hold a distribution authorisation and then resold them to authorised wholesalers. Also, it became apparent during the inspection that the ‘responsible person’ was not present on the premises but could be reached by phone. Based on these findings, Apotheke B.’s distribution authorisation was withdrawn. Apotheke B. challenged this decision before the Austrian Federal Administrative Court, which led to the latter referring several preliminary questions to the CJEU.

Wholesalers can only source medicines from other wholesalers or manufacturers

Articles 79 to 82 of Directive 2001/83 (‘the Community Code’) lay down minimum requirements to be satisfied by applicants for and holders of a distribution authorisation for medicinal products.

As far as the supply of medicinal products by wholesalers is concerned, Article 80(1)(b) of the Community Code states that the holder of the distribution authorisation must obtain their supplies of medicinal products only from persons who themselves possess the distribution authorisation or who are exempt from obtaining such an authorisation under Article 77(3) (i.e. holders of a manufacturing authorisation).

In its judgment, the CJEU confirmed that this provision must be read in a strict manner and so would therefore exclude any possibility of procuring medicines from other entities, such as those authorised or entitled under national law to supply medicines to the public (as Apotheke B. occasionally did). For the CJEU it was irrelevant that those irregular supplies allegedly related only to an “extremely small quantity”. Again, referring also to its overarching aim of protecting public health, the CJEU emphasized that Article 80(1)(b) of the Community Code does not allow for any exception, even for minimal quantities.

No continuous physical presence of a responsible person required, but an obligation to ensure that requested information can be provided

Another point of contention was whether the Community Code’s staffing requirements were satisfied when, during an inspection, the wholesaler’s responsible person was not present on the premises, but was contactable by telephone, and the staff that were present could not provide the inspection service with the requested information.

The CJEU recalled that, under Article 79(b) of the Community Code, a wholesale distributor must have staff, and in particular, a qualified person designated as being responsible, which would meet the conditions laid down by national law. The CJEU said that while this provision speaks of ‘a’ responsible person (and thus only one) that does not mean that this person must always be present during an inspection. Requiring otherwise would mean that the responsible person could never be absent from his or her workplace since inspections might also take place without prior notice. The CJEU also said that nothing would prevent urgent questions from being settled by telephone with the responsible person if they are absent.

However, the findings above could not justify the fact that staff present on the premises during an inspection are not able to provide the inspection service with the requested information. In that regard, Article 79(c) of the Community Code requires applicants for a wholesaler authorisation to respect the obligations incumbent on them under Article 80. This thus includes Article 80(1)(h)’s obligation to maintain a quality scheme establishing the responsibilities, procedures and risk management measures for the wholesaler’s activities. Any holder of a distribution authorisation should put in place the necessary procedures to ensure that, in the absence of the responsible person, another member of staff can provide the inspection service with the information requested by it.

The penalties imposed on wholesalers must be proportionate

The last question that the CJEU considered was whether the Community Code requires the withdrawal of a wholesaler authorisation for an infringement that has nevertheless been remedied at the time of adoption of the withdrawal decision or of a court hearing an appeal against that decision.

Under Article 77(6) of the Community Code, the Member States are required to suspend or withdraw a wholesaler authorisation where the conditions set out in Articles 79 and 80 are no longer fulfilled. In this regard, the CJEU ruled that the Community Code only governs the sort of measures that may be imposed by the Member States and not the criteria governing the implementation of those measures. However, since imposing a penalty foreseen by the Community Code constitutes the implementation of EU law, the Member States must still comply with the principle of proportionality (i.e. measures must be appropriate to achieve the desired end but cannot go further than necessary). In their proportionality assessment, the national authorities should, at the CJEU’s instruction, take account of (i) the nature and seriousness of the infringement, (ii) the high level of security of medicines supply enshrined in the Community Code, and (iii) the possibility of remedying deficiencies within a reasonable period.

Kirian Claeyé
Bart Junior Bollen