The internal market and health: selected case studies

1. The internal market and health: selected case studies Fiona Godfrey EU Policy Advisor ERS Brussels

2. What is the internal market? Article III-14 • The internal market shall comprise an area in which the free movement of persons, services, goods and capital shall be assured in accordance with the Constitution.

3. Key Treaty articles • Article 28 (non-discrimination) • Article 30 (defences to Article 28) • Article 49 (previously 59) (services) • Article 81 (competition) • Article 95

4. The four freedoms • Free movement of people • Goods • Services • Capital

5. Some principles of EU law • Ultra vires (lacking a legal basis) • Non-discrimination • Proportionality • Precautionary • Duty to give reasons • Freedom of expression • Right to property • Direct effect

6. Proportionality Three tests applied to all EU legislation: • What is the objective of the legislation? • Are the means employed suitable? • Do they go beyond what is necessary to achieve the objective?

7. The different courts EU (based in Luxembourg) • European Court of Justice • Court of First Instance European Court of Human Rights (Strasbourg) Only ECJ and CFI can deal with questions of free movement and EU Treaty law

9. How has the ECJ interpreted these freedoms and principles in relation to health? BSE cases Tobacco Alcohol GMOs and other potential risks to health Patients rights Drug authorizations Drug pricing

10. BSE I • 1998: a worldwide ban on sale of British beef was proportionate and justified because public health had to come before pure internal market considerations

11. France v Commission -BSE II • May 2003 the ECJ annulled a Commission decision ending the ban on Portuguese beef aimed at combating BSE • Asserted the need for a high level of protection to be ensured in all Community policies • Laid down specific tests Commission should have carried out before lifting ban • Found inspections did not take place or were not sufficient to establish if ban could be lifted safely

12. Biret - Another beef case • AG Alber Opinion May 2003: • WTO law directly applicable in Community law • Individuals (incl. Companies) have a fundamental right to economic activity • Where Community found to be in breach of its responsibilities under WTO agreement and fails to implement necessary legislation, affected interests are entitled to compensation

13. Tobacco • Tobacco I annulled 1998 comprehensive tobacco advertising directive on ground it was ultra vires because it did not meet its legal objective of harmonizing the internal market • But AG Opinion seemed to accept proportionality of a total ban had legal base been valid

14. Tobacco II • Upheld strict tests of Tobacco I to be met by all internal market directives but • As long as a directive has as its objective the improvement of the Internal Market, “it is no bar that the protection of public health (is) a decisive factor (in the directive)” • Amendment of existing legislation does not necessarily require new scientific evidence. Changes in perceptions or circumstances can be sufficient • Contrast that to

15. Snus case • AG Opinion (7 September 2004) finds ban on sale of oral tobacco legally based on Article 95 but • illegal for failure to give reasons AND • Court should rule is illegal BUT maintain the ban until Community enacts new legislation to continue ban legally

16. Alcohol- Gourmet Foods • National bans on alcohol advertising are in breach of Article 28 EC but • May be justified on public health grounds under Article 30 unless the same effect could be achieved by measures having less effect on intra-Community trade • National court left to decide - ruled provision was disproportionate

17. Alcohol - Bacardi, July 2004 • The French ban on indirect TV advertising for alcohol is a restriction on the freedom to provide services but • It can be justified on public health grounds

18. GMOs and potentially harmful substances in food • Monsanto C-236/01, September 2003 • A state can restrict or suspend marketing of a product on precautionary grounds but not on mere suppositions which are not verified. States must give detailed reasons for decisions of this nature

19. Denmark v Commission • A Member State does not have to prove that it has a specific problem in order to keep its existing legislation on potentially harmful substances in food • Where a specific problem does exist, the Commission should take account of it • No newscientific evidence is necessary • Divergent assessments of risks can be made without the existence of new evidence • The Member State must prove that its existing legislation ensures a higher level of health protection than the harmonising directive • It must not be disguised discrimination

20. Patient rights: the erosion of prior authorization • Smits-Peerbooms 2001 - prior authorization can be justified to maintain integrity of health care systems • Cannot refuse if the treatment is tried and tested and the applicant’s condition requires it • Can only refuse if treatment can be provided without undue delay at a facility recognized by the insurer/payer Questions arising out of this ruling • What constitutes undue delay? • Does this apply to in and out-patient care

21. Muller Faure, 2003 • Confirmed that national laws requiring prior authorization can be in breach of right to provide services • Costs and risks of imbalances in health care provision can justify this but • Is a distinction between hospital and non-hospital care • Reaffirmed Smits Peerbooms on hospital care but • Went on to lay down factors to be taken into account to assess undue delay e.g.. levels of disability, medical history, professional activity etc. • Found that on evidence provided freedom to provide services precludes prior authorization for non-hospital care, even where provided outside the country by a non-contracted provider

22. Ioannidis February 2003 • Pensioners can seek medical treatment in another member state even if the condition for which treatment is sought is not a new condition, except where pensioner went to the other member state exclusively for this purpose (Articles 31, 36, 93 of Regulation 1408/71)

23. Leichtle, 2004 • National provisions concerning reimbursement of travel, lodging etc. when travelling abroad for a cure can be capable of influencing patient choice • This could constitute a barrier on freedom to provide services • A provision requiring greater prospects of success abroad is discriminatory

24. Health rights giving rise to residence rights- Zhu, Opinion May 2004 • A child’s right of residence cannot be based on her status as a recipient of health or childcare but • If child is provided with private health care it can enjoy the right of residence granted to non-economically active individuals • This confers a right of residence on the parent

25. Drug authorization Commission v Artegodan 2003 • ECJ confirmed CFI ruling annulling a Commission decision to withdraw market authorizations for anti-obesity drugs • Authorizations had been granted according to national procedures and not under EU directives and Commissioned lacked legal powers to withdraw the drugs

26. Drug costs- Doc Morris, 2003 • National provisions prohibiting sale of medicines normally sold in pharmacies by mail order can be breach Article 28 (EC) • Article 30 can provide a justification but only for prescription drugs

27. Drug costs - AOK, 2004 • Sickness funds fulfill an exclusively social function and do not engage in competition with each other • Hence they are non-economic entities for the purposes of Article 81 EC • Accordingly, the competition provisions of the Treaty do not apply to sickness funds

28. Charter of Fundamental Rights • Article 3 - informed consent, sale of organs etc. • Article 8 - data protection • Article 13- freedom of the arts and sciences • Article 35 - right to health care • We can expect to see EU legal cases arising out of this when ratified

29. Summary • Currently health protection measures founded on Article 95. Court will investigate legal basis for laws and uphold health measures but only once internal market conditions have been met (Tobacco I & II) • Once met, Court prepared to give wide discretion to Community measures and broad interpretation of proportionate but • This does not necessarily apply to Commission decisions (Artegodan, Portuguese beef)

30. Summary II • Court doesn’t like Community wide bans on advertising (tobacco) but will accept Community wide bans on specific products (BSE, Snus) • Court will accept national advertising bans but only if objective cannot be achieved with other measures (Bacardi, Gourmet) • ECJ has promoted patients’ free movement rights (Muller Faure etc.) and rights to buy cheaper drugs (Doc Morris) but • Has ruled sickness funds not covered by competition rules

31. Summary III • Where the Court can advance individual rights without undue economic cost to member states, it will (Muller Faure, Doc Morris etc.) But • Where extension of these principles could seriously affect national health care costs, it won’t (AOK)

32. Summary IV • Precautionary principle accepted but good reasons must be given (Denmark, Monsanto) • Failure to give reasons increasingly cited as reason for annulment • Advocate Generals willing to be creative - sometimes good (Tobacco II), sometimes bad (Biret) • Tobacco cases will always surprise us!