Opinion of Mr Advocate General Tesauro

Mr President,

Members of the Court,

1. In these proceedings the Commission seeks a declaration that the Kingdom of Belgium has failed to fulfil its obligations under Article 30 of the Treaty as regards legislation on pharmaceutical products. Three aspects of the national legislation are contested by the Commission: the rules for fixing maximum prices, the rules governing approval for reimbursement by social security and finally the system of programme contracts established in the sector in question.

A — Rules on the fixing of maximum prices

2. As a preliminary matter I would point out that the determination maximum prices for pharmaceutical products, as provided for under the Belgian legislation, may concern both products in general and procuts in particular, that is to say products considered individually. It is in fact the latter technique which is principally used by the Minster for Economic Affairs whose task it is to fix maximum prices after prior consultation wiht the committee on prices for proprietary pharmaceuticals.

3. Having said that, I would first of all recall the words of Commission Directive 70/50/EEC, Article 2(3)(d)(e) of which deems to be incompatible with Article 30 of the Treaty measures which preclude any increase in the price of the imported product corresponding to the supplementary costs and charges inherent in importation; or fix the prices of products solely on the basis of the cost price or the quality of domestic products at such a level as to create a hindrance to importation.

The predominant criteria for fixing prices

4. Prices in particular are fixed on the basis of a series of criteria, 10 in all, certain of which include consideration of factors relating also or solely to imported products (for example ex-producer or ex-importer price components, the impact of sales and delivery margins, the impact of value added tax, the comparison with prices charged for like products in the other countries having a similar standard of living), whilst others relate to factors peculiar to the national market (for example, investment and employment, market and competitive conditions and the effect on exports, comparison with prices charged in Belgium for pharmaceutical products or medicinal products comparable from a therapeutic point of view and to be found on the market). The abovementioned criteria in principle permit the specific components of the cost of imported products to be taken into account.

Fixing of prices at an unremunerative level

5. The Commission itself acknowledges that to demonstrate the unremunerative nature of certain prices involves a detailed analysis of the cost of the product in question (p. 8 of the application). Yet it carries out no analysis of the costs of the products but infers the lack of profitability from the mere fact that the prices of pharmaceutical products are higher in other countries and from the fact that certain undertakings have abandoned the marketing of their products in Belgium because the prices imposed were so low as to be unremunerative.

6. For the sake of completeness, I nevertheless think it useful to mention the analysis of price levels carried out by the Commission for the purpose of demonstrating that the system in question impedes imports and in particular that the prices so fixed are not remunerative for importers.

Lack of transparency in the application of the criteria

7. Article 3 of the Decree of 11 December 1975 provides that, in notifying his decision fixing the price, the Minister for Economic Affairs is to inform the undertaking concerned of the criteria on which he based himself. The Commission has maintained that in the majority of cases the decisions in question merely mention that account was taken of criteria 1 to 10. That practice thus does make it possible to know, in each particular case, the criteria on the basis of which the Minister fixed the maximum price of the products in question or, a fortiori, to appraise the grounds of his decision.

8. In that connection I would point out first of all that a duty to provide a statement of reasons is certainly indispensible where, as in the present case, the legislation merely lists the applicable criteria and leaves the competent Minister to determine, after consultation with the committee on prices of proprietary pharmaceuticals, which of those criteria should be taken into account in each individual case, and the impact of each of them.

B — The rules governing approval for reimbursement

9. The Belgian legislation contested by the Commission provides that only products contained in a relevant list may be reimbursed. Admission to those lists is carried out on the basis of a certain number of criteria relating to the composition, the price and the social interest of each product.

The criteria

10. According to the Commission the decisions on approval for reimbursement are not based on objective and verifiable criteria, a requirement held by the Court in its judgment in Duphar to be essential.

Request for a price reduction

11. The second allegation in this matter concerns the fact that frequently approval for reimbursement is made subject to a reduction in prices by the undertaking concerned. In a system of prices that are already low that situation is said to induce undertakings to forgo reimbursement or to sell at unprofitable prices. The Commission cites a series of examples of products withdrawn from the market on those grounds, and these examples are specifically refuted by the Belgian Government.

C — The system of programme contracts

12. The Commission considers that the system of programme contracts in the medicinal products sector discriminates against imponed products in two respects.

13. In the light of the foregoing considerations I therefore conclude by proposing that the Court should:

1 Original language: Italian.

2 Law of 9 July 1975 (Moniteur Selge, 30 July 1975, p. 9328) and royal decree of 11 December 1975 (Moniteur Belge, 16 December 1975, p. 15989).

3 Royal Decree of 1 September 1980 (Moniteur Belge, 30 September 1980, p. 11106) and Royal Decree of 2 September 1980 (Moniteur Belge, 30 September 1980, p. 11107).

4 Royal Decree of 14 October 1985 (Moniteur Belge, 21 November 1985, p. 17137).

5 OJ English Special Edition 1970 (I), p. 17.

6 See judgments in Case 181/82 Roussel [1983] ECR 3849, paragraph 17; Case 231/83 Caliti [1985] ECR 315, paragraph 23; Case 56/87 Commission v Italy [1988] ECR 2919, paragraph 6

7 Judgment in Case 65/75 Tasca[1976] ECR 291

8 Cited above, paragraph 26.

9 See in that connection the judgment in Case C-347/88 Commission v Greece [1990] ECR I-4747.

10 Judgment in Joined Cases 16/79 and 20/79 Danis [1979] ECR 3327.

11 Judgments Nos 20.987 and 20993 of 27 February 1981, and Nos 23215 and 23220 of 6 May 1983.

12 Case 238/82 Duphar v Netherlands [1984] ECR 523

13 This is a requirement which is moreover now codified in Council Directive 89/105/EEC of 21 December 1988 relating to the transparency of measures regulating the pricing of medicinal products for human use and their inclusion in the scope of national health insurance systems (OJ L 40, p. 8).

14 See in this connection the judgment in Case 222/86 UNECTEF v Heylens [1987] ECR 4097, paragraphs 15 and 16, in which the principle in question was upheld in relation to freedom of movement for workers.

15 Moniteur Beige 29 4 1988, p 5118

16 See, most recently, the judgment in Case 347/88 Commission v Hellenic Republic [1990] ECR 4747. paragraph 40

17 Judgment cited above, at paragraph 22.

18 Paragraph 20.

19 Paragraph 21

20 Moniteur Selge of 5.1.1989, p. 75.

21 See inter alia the judgment in Case 154/85 Commission 0v Italy [19S7]ECR 2717.