Belgian Constitutional Court annuls new export prohibition for full-line wholesalers but new legislative proposals are already put forward

Belgian Constitutional Court annuls new export prohibition for full-line wholesalers but new legislative proposals are already put forward
October 25, 2019

On 17 October 2019, the Belgian Constitutional Court annulled the export prohibition for wholesaler-distributors (also ‘full-line wholesalers’), which was introduced by Article 3, 2° of the Act concerning the unavailability of medicinal products of 7 April 2019.[1] This annulment followed the Constitutional Court’s earlier suspension of the provision.[2] As a result, Belgian full-line wholesalers, under certain conditions, can again export their medicinal products and are no longer restricted to supplying medicinal products for human use only to (i) other full-line wholesalers, (ii) Belgian pharmacies, and (iii) Belgian hospitals.[3] The legislator, however, seems determined to reduce the unavailability of medicinal products on the Belgian market as other legislative proposals are already ‘on the horizon’.

Export prohibition has equivalent effect to a quantitative restriction in the sense of Article 34-35 TFEU      

Following the introduction of an export prohibition for full-line wholesalers under Article 3, 2° of the Act of 7 April 2019, several Belgian wholesalers and full-line wholesalers initiated a request for annulment of Article 3, 2° of the Act before the Constitutional Court. Wholesalers, which are not marketing authorisation holders (MAHs), are mainly active in exporting medicinal products and are largely dependent on full-line wholesalers for obtaining the medicinal products. These wholesalers argued that a prohibition for full-line wholesalers on supplying medicinal products to wholesalers fundamentally reshaped the pharmaceutical supply chain. Wholesalers would be forced to obtain their stock from the MAHs (i.e. pharmaceutical companies), with the MAHs often being reluctant to do so.

The wholesalers further argued that the contested provision infringed the free movement of goods and the freedom of trade and business by providing for a general prohibition not limited in time for the supply of medicinal products from full-line wholesalers to wholesalers. Finally, they also stated that it introduced a difference in treatment between full-line wholesalers and wholesalers in Belgium and full-line wholesalers and wholesalers in other EU Member States as the latter are not confronted with such an export prohibition.

The Constitutional Court acknowledged the legislator’s intent to safeguard (i) patients’ health in Belgium, in particular their security of supply of medicinal products, and (ii) the full-line wholesalers’ specific public service obligation entailing that they must prioritise supplies to Belgian pharmacies, hospitals and full-line wholesalers in Belgium. It, however, added that medicinal products are not exempt from the rules of the internal market, and referred to the case law of the Court of Justice of the European Union (‘CJEU’). The CJEU has held that all trading rules enacted by Member States ‘which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade are to be considered as measures having an effect equivalent to quantitative restrictions’.[4] Therefore, the contested provision could only be justified on the grounds ‘of the protection of the health and life of humans if it is appropriate for securing the achievement of the objective pursued and does not go beyond what is necessary in order to attain it’.[5]

On the basis of these principles, the Constitutional Court annulled the contested provision as it did not consider it ‘appropriate’ to achieving the objective pursued. The Court held that wholesalers’ activities do not influence the unavailability of medicinal products.[6] Additionally, the rules that already applied allowed full-line wholesalers to sell medicinal products to other wholesalers only if that does not affect their public service obligation, i.e. ‘to guarantee permanently an adequate range of medicinal products to meet the requirements of a specific geographical area and to deliver the supplies requested within a very short time over the whole of the area in question’.

The other provisions of the new Act – such as the delegation to define by Royal Decree the ‘temporary unavailability’ of medicinal products in which case the Federal Agency for Medicines and Health Products can provide guidance on therapeutically-equivalent alternatives – continue to apply. To date, this has not yet been implemented by Royal Decree.

New legislative proposals introduced to address the problem of drug shortages

The legislator seems determined to address the problem of drug shortages and has introduced new legislative proposals.[7] The most recent Proposal of 28 August 2019 stipulates, amongst other things, that a MAH must provide the exact cause for a temporary or definitive cessation of the commercialisation of its medicinal products in Belgium.[8] This also applies to medicinal products subject to quotas, which are defined as medicinal products for which the MAH deliberately limits production and/or supply.[9]

It should in this respect be noted that the proposal provides that the mere notification or determination of a temporary cessation is subject to penalties ranging from 1000 to 100,000 EUR together with the costs incurred by the patient or the social security system.[10] One can ask whether the imposition of such penalties actually serves the purpose of reducing shortages of medicinal products as instead it may deter MAHs from introducing their medicinal products on the Belgian market or to immediately opt for a definitive cessation of such commercialisation.

The Proposal further stipulates that it must be possible to prohibit the export of medicinal products for as long as the cessation continues.[11] Finally, the Proposal states that both full-line wholesalers and MAHs acting as wholesalers must be able to supply their medicinal products to (hospital) pharmacies within 24 hours.[12]

It now remains to be seen which amendments to the Proposal will be introduced and whether and if so then in what form, the Proposal will eventually be adopted.

[1] Constitutional Court 17 October 2019, No. 146/2019, see online: https://www.const-court.be/public/n/2019/2019-146n.pdf.

[2] Constitutional Court 18 July 2019, No. 116/2019, see online: https://www.const-court.be/public/n/2019/2019-116n.pdf.

[3] See our previous blogpost outlining the principles of the new Act

[4] CJEU 11 July 1974, Dassonville, Case 8/74, paragraph 5.

[5] CJEU 3 July 2019, Delfarma, Case 387/18, paragraph 29.

[6] The Court referred to the FAHMP’s (see § B.17) website explaining the problem of unavailable medicinal products, which did not state the wholesalers’ activities: https://www.famhp.be/en/items-HOME/unavailability_of_medicinal_products.

[7] Legislative proposal of 28 August 2019 amending the Act of 25 March 1964 on medicinal products concerning the unavailability of medicinal products, Parliamentary documents, no. 55, 0229/001 (see online: https://www.dekamer.be/FLWB/PDF/55/0229/55K0229001.pdf). This proposal is based on the nearly identical proposal of 27 April 2017, Parliamentary documents, no. 54, 2440/001. See in this regard also the proposal for a resolution concerning the unavailability of medicinal products, Parliamentary documents, no. 55, 0129/001 (see online: https://www.dekamer.be/kvvcr/showpage.cfm?section=/flwb&language=nl&cfm=/site/wwwcfm/flwb/flwbn.cfm?lang=N&legislat=55&dossierID=0129).

[8] Article 2, 1° of the Proposal.

[9] Article 2, 2° of the Proposal.

[10] Article 2, 2° and Article 5, 2° of the Proposal.

[11] Article 3 of the Proposal.

[12] Article 4 of the Proposal.

Written by

  • Kirian Claeyé

    Partner

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