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The Swedish retail monopoly on pharmaceuticals Is it compatible with EC-Law?

Bengtsson, Ann-Christina (2006)
Department of Law
Abstract
Within the common market, built upon the notion of free movement of goods and undistorted competition, Member States are prohibited to put restrictions on the free market or distort competition if no justifiable reasons under Community Law are presented. Thus, state monopolies of a commercial character are per se controversial within the Common market. However it is clear from the existence of Article 31EC that Community regulation does not require the abolition of state monopolies. What is required is that they are adjusted in a way so as to ensure that no discrimination, including any possibility to discriminate, regarding the conditions under which goods are produced and marketed, exists between Member States. The Swedish state monopoly... (More)
Within the common market, built upon the notion of free movement of goods and undistorted competition, Member States are prohibited to put restrictions on the free market or distort competition if no justifiable reasons under Community Law are presented. Thus, state monopolies of a commercial character are per se controversial within the Common market. However it is clear from the existence of Article 31EC that Community regulation does not require the abolition of state monopolies. What is required is that they are adjusted in a way so as to ensure that no discrimination, including any possibility to discriminate, regarding the conditions under which goods are produced and marketed, exists between Member States. The Swedish state monopoly on retail trade on pharamceuticals was examined by The Court in the Hanner case where the main question was whether the Swedish retail monopoly were compatible with the EC Treaty. The case emerged when Mr Hanner faced criminal proceedings by the Swedish authorities for selling nicotine patches and nicotine chewing gum outside the state owned pharmacies, which was prohibited according to Swedish law. Hanner acknowledged the infringement and contended that the Swedish monopoly was discriminating and not proportionate to its objectives and therefore in violation of the EC Treaty articles 28, 31 and 43. The Court found that there was no purchasing plan and no possibility for suppliers of medicinal products to ascertain why they were not selected or to contest selection decisions before an independent supervisory authority. Radically divergent interpretations of the Court's ruling on the Hanner case implied that it was not as distinct and unambiguous as one could have hoped. A reason for this uncertainty regarding what implication the Court's ruling actually has on the Swedish system could be that it leaves several questions, that needed clarification, unanswered. The Court chose to try only the question regarding potential discrimination of traders in pharmaceuticals from other Member States. In doing this, the Court found certain aspects of the organising of the Apoteket system to infringe upon Article 31 EC and that no justifications could be made through Article 86 EC. One conclusion drawn from this ruling is that Over-The-Counter drugs are free to be sold in non-pharmacy outlets. Although this judicially might have been the case directly after the judgment, my opinion is that it no longer is so, since the criticized insufficiency in the Swedish system now has been rectified through the amendment of the 1996 agreement. I interpret Article 31 EC and the Court's ruling in the way that once the Member States have made the required adjustments, Article 31 EC allows them to maintain their monopolies without imposing further conditions. Thus, the main question of whether the very existence of the Swedish retail monopoly on pharmaceuticals can be motivated and justified within Community law, was not explicitly dealt with by the Court. Had the Court tried the ''public health'' criteria under article 31 EC it is my opinion that the retail monopoly on prescription drugs as a means of securing competence could probably be justified. Where as regarding Over-The-Counter drugs the monopoly is not proportionate to its purpose. (Less)
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author
Bengtsson, Ann-Christina
supervisor
organization
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
EG-rätt
language
English
id
1556069
date added to LUP
2010-03-08 15:55:19
date last changed
2010-03-08 15:55:19
@misc{1556069,
  abstract     = {Within the common market, built upon the notion of free movement of goods and undistorted competition, Member States are prohibited to put restrictions on the free market or distort competition if no justifiable reasons under Community Law are presented. Thus, state monopolies of a commercial character are per se controversial within the Common market. However it is clear from the existence of Article 31EC that Community regulation does not require the abolition of state monopolies. What is required is that they are adjusted in a way so as to ensure that no discrimination, including any possibility to discriminate, regarding the conditions under which goods are produced and marketed, exists between Member States. The Swedish state monopoly on retail trade on pharamceuticals was examined by The Court in the Hanner case where the main question was whether the Swedish retail monopoly were compatible with the EC Treaty. The case emerged when Mr Hanner faced criminal proceedings by the Swedish authorities for selling nicotine patches and nicotine chewing gum outside the state owned pharmacies, which was prohibited according to Swedish law. Hanner acknowledged the infringement and contended that the Swedish monopoly was discriminating and not proportionate to its objectives and therefore in violation of the EC Treaty articles 28, 31 and 43. The Court found that there was no purchasing plan and no possibility for suppliers of medicinal products to ascertain why they were not selected or to contest selection decisions before an independent supervisory authority. Radically divergent interpretations of the Court's ruling on the Hanner case implied that it was not as distinct and unambiguous as one could have hoped. A reason for this uncertainty regarding what implication the Court's ruling actually has on the Swedish system could be that it leaves several questions, that needed clarification, unanswered. The Court chose to try only the question regarding potential discrimination of traders in pharmaceuticals from other Member States. In doing this, the Court found certain aspects of the organising of the Apoteket system to infringe upon Article 31 EC and that no justifications could be made through Article 86 EC. One conclusion drawn from this ruling is that Over-The-Counter drugs are free to be sold in non-pharmacy outlets. Although this judicially might have been the case directly after the judgment, my opinion is that it no longer is so, since the criticized insufficiency in the Swedish system now has been rectified through the amendment of the 1996 agreement. I interpret Article 31 EC and the Court's ruling in the way that once the Member States have made the required adjustments, Article 31 EC allows them to maintain their monopolies without imposing further conditions. Thus, the main question of whether the very existence of the Swedish retail monopoly on pharmaceuticals can be motivated and justified within Community law, was not explicitly dealt with by the Court. Had the Court tried the ''public health'' criteria under article 31 EC it is my opinion that the retail monopoly on prescription drugs as a means of securing competence could probably be justified. Where as regarding Over-The-Counter drugs the monopoly is not proportionate to its purpose.},
  author       = {Bengtsson, Ann-Christina},
  keyword      = {EG-rätt},
  language     = {eng},
  note         = {Student Paper},
  title        = {The Swedish retail monopoly on pharmaceuticals Is it compatible with EC-Law?},
  year         = {2006},
}