On 19 May 2009 the European Court of Justice (ECJ) ruled that while restrictions on ownership and operation of pharmacies constitute a restriction on freedom of establishment and the free movement of capital, these restrictions can be justifiable (Joined Cases C 171/07 and C 172/07 Apothekerkammer des Saarlandes and Others). This is in line with the Advocate General’s opinion which issued in December 2008.

Implications for Ireland

It is important to note that this ruling does not say that pharmacy ownership must be restricted to pharmacists.  Each EU member state has discretion in this regard. In Ireland there are no restrictions on third party ownership of pharmacies and this continues to be the case unless the Government decides to introduce legislation to change this position.

 

Under Article 43 of the EC Treaty “restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State.” Under Article 48 “companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Community shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States.”

 

German and Italian legislation restrict the right to own and operate a pharmacy exclusively to pharmacists and a challenge was mounted in both jurisdictions arguing that the legislation contravened EU law. The German case involved pharmacists and their professional associations and the Italian case was brought by the European Commission.

 

The ECJ acknowledged that the German and Italian  rules constitute a restriction on freedom of establishment under Article 43 because they only allow  pharmacists to operate pharmacies. However, it went on to say that such restrictions, if imposed without discrimination, may be justified by overriding reasons in the public interest.  The protection of public health and the objective of ensuring that the provision of medicinal products to the public is reliable and of good quality were both held to be justifications for restrictions on the freedoms of movement guaranteed by the EC Treaty.  The ECJ also noted that a member state should be able to take protective measures, such as measures that reduce public health risks, without having to wait until the reality of the risks become apparent. 

While the ECJ acknowledged that a pharmacist has an interest in making a profit through his pharmacy business, that is not his sole objective as it is tempered by the pharmacist’s training, professional experience and the responsibility he owes.  Therefore, a member state may take the view that the operation of a pharmacy by a non-pharmacist may represent a risk to public health in light of the fact that the pursuit of profit by the non-pharmacist owner is not moderated by his training, experience and responsibility.

Having decided that there is no less restrictive measure which would attain the same objective as effectively, the ECJ held that the restrictions in the German and Italian legislation may be justified. The court also concluded however that each EU member state has discretion to determine its own level of protection of public health in this regard.