Court of Justice of the European Communities (including Court of First Instance Decisions)

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1.Officials - Act adversely affecting an official - Duty to state the reasons on which the decision is based - Purpose - Scope
( Staff Regulations of Officials, Art . 25, second paragraph )
2.Officials - Social security - Medical expenses - Reimbursement - Meaning of term "pharmaceutical products" - Scope
( Staff Regulations of Officials, Art . 72; Rules on Sickness Insurance, Annex I, Section V; Council Directive 65/65 )

1.Since the purpose of the duty to state the reasons upon which a decision is based is both to permit the person concerned to determine whether the decision contains a defect allowing its legality to be challenged and to enable it to be reviewed by the Court, it follows that the extent of that duty must be determined on the basis of the particular facts of each case .
The duty to state the grounds on which a decision is based, within the meaning of the second paragraph of Article 25 of the Staff Regulations, is satisfied if the circumstances in which the disputed measure was adopted and notified to those concerned and the staff memoranda and other communications accompanying it make it possible to recognize the essential factors which guided the administration in its decision .
2.Since the Community Rules on Sickness Insurance contain no definition of the term "pharmaceutical products", in order to determine the scope of that term within the meaning of the first paragraph of Section V of Annex I to the Rules, reference must be made to Council Directive 65/65 on the approximation of provisions laid down by law, regulation or administrative action relating to proprietary medicinal products .
Under the provisions of that directive, an organotherapeutic preparation presented for treating or preventing disease in human beings, prescribed by a practitioner and purchased from a pharmacy, must be considered to be a pharmaceutical product . The Joint Sickness Insurance Scheme must reimburse the cost of that product because it does not appear in the list of products which fall under the heading of beauty products or tonics not considered to be pharmaceutical products and as such excluded from reimbursement contained in the second paragraph of Section V of Annex I to the abovementioned Rules, and may not, in view of its properties, be regarded as a similar product .

In Case C-169/88
Maurice Prelle, a former official of the Commission, represented by Guy Harles, of the Luxembourg Bar, 4 avenue Marie-Thérèse, Luxembourg, with an address for service at the latter' s Chambers,
applicant,
v
Commission of the European Communities, represented by Sean Van Raepenbusch, a member of its Legal Department, acting as Agent, with an address for service in Luxembourg at the office of Georgios Kremlis, Wagner Centre, Kirchberg,
defendant,
APPLICATION for the annulment of the appointing authority' s decision rejecting his complaint lodged at the beginning of November 1987 against a decision of the office responsible for settling claims of the Joint Sickness Insurance Scheme refusing to pay for a pharmaceutical preparation prescribed for Mrs Prelle by Dr Jourdan and made up by the pharmaceutical laboratory of Dr Jeannes,
THE COURT ( First Chamber )
composed of : Sir Gordon Slynn, President of Chamber, R . Joliet and G . C . Rodríguez Iglesias, Judges,
Advocate General : G . Tesauro
Registrar : B . Pastor, Administrator
having regard to the Report for the Hearing and further to the hearing on 27 June 1989,
after hearing the Opinion of the Advocate General delivered at the sitting on 12 October 1989,
gives the following
Judgment

1 By an application lodged at the Court Registry on 17 June 1988, Maurice Prelle, a former official of the Commission of the European Communities, brought an action seeking, first, annulment of the implied decision rejecting the complaint which he had lodged on 4 November 1987 against a decision of the office responsible for settling claims of the Joint Sickness Insurance Scheme refusing to reimburse the cost of an organotherapeutic preparation and, secondly, an order requiring the Commission to pay BFR 8 000 in compensation for the material and non-material damage which it caused him when it forced him to commence legal proceedings owing to the adoption of the decision .
2 According to the documents before the Court, on 14 July 1987 the applicant submitted to the office responsible for settling claims in Brussels a claim for the reimbursement of FF 400 in respect of an organotherapeutic product . The product in question, which was intended to treat rheumatoid arthritis, was prescribed for his wife by a French doctor and made up in a pharmaceutical laboratory . By a decision of 2 September 1987, the office responsible for settling claims refused to reimburse the cost of the product .
3 In reply to a letter of 28 September 1987 from the applicant asking the Joint Sickness Insurance Scheme to inform him of the reasons upon which the refusal was based, on 26 October 1987 he received a copy of an opinion delivered on 19 July 1987 by the medical officer of the office responsible for settling claims which stated "non-reimbursable ointment ( organotherapy )".
4 On 4 November 1987, Mr Prelle submitted an administrative complaint pursuant to Article 90(2 ) of the Staff Regulations . On 7 December 1987 he wrote to the Management Committee of the Joint Sickness Insurance Scheme in order to draw its attention to the medical officer' s error in describing the product at issue as an ointment - the cost of which, moreover, had already been reimbursed - when in fact it was an injectable product .
5 By a decision of 13 June 1988, the Commission rejected the complaint on the ground that the organotherapeutic preparation could not be considered to be a pharmaceutical product and its cost was not therefore reimbursable under Section V of Annex I to the Rules on Sickness Insurance for Officials of the European Communities . That decision was notified to the applicant on 24 June 1988 . Before he received notification of that late response to his complaint, Mr Prelle brought the present action .
6 Reference is made to the Report for the Hearing for a fuller account of the facts, the course of the procedure and the submissions of the parties, which are mentioned or referred to hereinafter only in so far as is necessary for the reasoning of the Court .
7 In support of his application, the applicant submits, first, that there was a breach of the duty to state the reasons upon which a decision is based, pursuant to the second paragraph of Article 25 of the Staff Regulations and, secondly, that Section V of Annex I to the Community Rules on Sickness Insurance for Officials of the European Communities was infringed .
The submission that the contested decision did not contain an adequate statement of reasons
8 The applicant claims that, in breach of the second paragraph of Article 25 of the Staff Regulations, which provides that any decision adversely affecting an official must state the grounds upon which it is based, the decision of 2 September 1987 of the office responsible for settling claims did not state any ground for the refusal to reimburse since it merely referred to "services the cost of which is not reimbursable ". He points out that because the medical officer confused the ointment and the injectable product the statement of reasons contained in his opinion of 19 July 1987 did not relate to the product at issue, namely the injectable product, and was so concise that it did not enable him to draw any conclusion at all regarding the interpretation of Section V of Annex I upon which the refusal was based .
9 As the Court has already held, in particular in the judgment of 21 June 1984 in Case 69/83 Lux v Court of Auditors (( 1984 )) ECR 2447, in order to decide whether the requirements of Article 25 of the Staff Regulations have been satisfied it is appropriate to take into consideration not only the contested decision but also the circumstances surrounding its adoption . Since the purpose of the duty to state the reasons upon which a decision is based is both to permit the person concerned to determine whether the decision contains a defect allowing its legality to be challenged and to enable it to be reviewed by the Court, it follows that the extent of that duty must be determined on the basis of the particular facts of each case .
10 The Court has also stated, in particular in the judgments of 14 July 1977 in Case 61/76 Geist v Commission (( 1977 )) ECR 1419 and of 17 December 1981 in Case 791/79 Demont v Commission (( 1981 )) ECR 3105, that the duty to state the grounds on which a decision is based, within the meaning of the second paragraph of Article 25 of the Staff Regulations, is satisfied if the circumstances in which the disputed measure was adopted and notified to those concerned and the staff memoranda and other communications accompanying it make it possible to recognize the essential factors which guided the administration in its decision .
11 In the present case it should be pointed out first of all that examination of the decision of the office responsible for settling claims of 2 September 1987, which refers to "services the cost of which is not reimbursable", together with the opinion of the medical officer of 19 July 1987, which referred to an "ointment the cost of which is not reimbursable ( organotherapy )", notwithstanding the medical officer' s confusion as to the product, show concisely but with sufficient clarity that the reason for the rejection of the applicant' s claim was the fact that the product in question was not a pharmaceutical product within the meaning of Section V of Annex I .
12 Moreover, the applicant knew that that was the ground upon which the decision was based since both in the complaint of 4 November 1987 and in the application commencing proceedings of 17 June 1988 he claimed that the Commission' s interpretation of Section V of Annex I was incorrect .
13 In view of those factors, the first submission must be rejected as unfounded .
Infringement of Section V of Annex I of the Rules on Sickness Insurance for Officials of the European Communities
14 Under the first paragraph of Section V of Annex I, "the cost of pharmaceutical products prescribed by the practitioner shall be reimbursed at the rate of 85 %". However, the second paragraph provides that "mineral waters, tonic wines and beverages, infant foods, hair-care products, cosmetics, special diet foods, hygiene products, irrigators, thermometers, tisanes, aromatherapeutic products and similar products and instruments shall not be considered as pharmaceutical products ".
15 In the applicant' s opinion, when a product has been prescribed by a practitioner and made up by a dispensing chemist the first paragraph of Section V requires the office responsible for settling claims to reimburse the cost of that product at the rate of 85%, provided that it is not explicitly referred to in the second paragraph of Section V, which contains an exhaustive list of the products which are not regarded as pharmaceutical products . Since organotherapeutic products are not included in that list they must consequently be considered to be pharmaceutical products the cost of which is reimbursable pursuant to the first paragraph .
16 The Commission claims that the product in question is not a pharmaceutical product within the meaning of Section V since it does not have any curative or preventative properties or at least a sufficient degree of therapeutic benefit proven according to current scientific standards, and that its cost is therefore not reimbursable pursuant to Section V . The Commission emphasizes that the persons who drafted the Community Rules merely drew up a non-exhaustive list, in the second paragraph of Section V, of a number of products which quite clearly were not pharmaceutical products . However, it does not follow that the medical officer attached to the office responsible for settling claims has no power to assess whether the cost of any other product prescribed by a practitioner and subsequently made up and sold in a pharmacy is reimbursable .
17 The first thing to be determined is whether organotherapeutic preparations are covered by the concept of pharmaceutical products in the first paragraph of Section V and, if so, whether they may be regarded as similar to the products referred to in the second paragraph and, consequently, excluded from reimbursement .
18 The Community Rules on Sickness Insurance contain no definition of the term "pharmaceutical products ". Consequently, in order to determine the scope of that term within the meaning of the first paragraph of Section V reference must be made to Council Directive 65/65/EEC of 26 January 1965 on the approximation of provisions laid down by law, regulation or administrative action relating to proprietary medicinal products ( Official Journal, English Special Edition 1965-66, p . 20 ), which contains a number of useful criteria for assessment, even though it was adopted in a context different from that of the Rules on Sickness Insurance for Officials of the European Communities .
19 For the purposes of Directive 65/65/EEC, a proprietary medicinal product is defined in Article 1 as "any ready-prepared medicinal product placed on the market under a special name and in a special pack ". Consequently, the directive does not concern a magistral preparation such as the organotherapeutic product at issue .
20 However, if the way in which the product is prepared and packaged is disregarded, the essential characteristics of a pharmaceutical product are given in the definitions of the terms "medicinal product" and "substance" in Article 1 of the directive .
21 Under the first paragraph of Article 1(2 ) of the directive, a medicinal product is "any substance or combination of substances presented for treating or preventing disease in human beings ...". Article 1(3 ) provides that the term "substance" must be interpreted as "any matter irrespective of origin which may be ... animal, e.g . ... parts of organs ".
22 On the basis of those definitions, an organotherapeutic preparation presented for treating or preventing disease in human beings must be considered to be covered by the concept of a pharmaceutical product within the meaning of the first paragraph of Section V of Annex I, provided that it is prescribed by a practitioner and purchased from a pharmacy .
23 However, it must be considered whether an organotherapeutic preparation of that kind falls under the second paragraph of Section V of Annex I to the Rules of the Joint Sickness Insurance Scheme, which lists certain products which are not considered to be pharmaceutical products and the cost of which is consequently not reimbursable .
24 The list of products in the second paragraph is not exhaustive . The wording of the provision itself makes specific mention of a certain number of products and refers to "similar products and instruments ".
25 Organotherapeutic preparations are not specifically mentioned in the list . Nor can they be regarded as products similar to the products specifically mentioned in the second paragraph of Section V of Annex I, such as, for example, mineral waters, tonic wines and beverages, infant foods, hair-care products, cosmetics, special diet foods, hygiene products and aromatherapy products . Unlike organotherapeutic products, the products listed in the second paragraph of Section V are not intended to treat a specific illness but must rather be regarded, in general, as beauty products or tonics . The fact that the cost of those products is not reimbursable therefore appears to be related to those special characteristics and not to their lack of proven therapeutic effectiveness .
26 It follows that the cost of organotherapeutic preparations prescribed by a practitioner and purchased from a pharmacy must be reimbursed at the rate of 85%, since they must be considered to be pharmaceutical products and do not fall within the category of similar products referred to in the second paragraph of Section V of Annex I .
27 The Commission' s reference to Section XV(2 ) of Annex I in order to justify the refusal to reimburse the cost of the organotherapeutic product cannot be accepted either . Section XV(2 ), which provides that expenses relating to treatments considered by the office responsible for settling claims to be non-functional, superfluous or unnecessary are not to be reimbursed, is not the basis upon which the contested decision was adopted and was first cited by the Commission in its statement of defence .
28 Finally, although in the light of the present wording of Section V of Annex I the Commission may not refuse to reimburse the cost of organotherapeutic products, the fact that the list of products in the second paragraph of Section V is not exhaustive enables the persons responsible for drafting the Community Rules to amend the paragraph in question so as expressly to include organotherapeutic preparations among the products which are not considered to be pharmaceutical products .
29 Any other interpretation of Section V of Annex I, on its present wording, would unreasonably expose members to the scarcely foreseeable risk that reimbursement may be refused, even when a product is prescribed by a practitioner and purchased from a pharmacy, although, not being experts in pharmacology, from a reading of Section V they may legitimately expect to be reimbursed the sum paid to purchase such a product .
30 In view of those factors, the second submission must therefore be upheld .
31 The application must therefore be considered to be well founded and, consequently, the implied decision rejecting the applicant' s complaint of 4 November 1987 must be annulled . Under the first paragraph of Article 176 of the EEC Treaty, the Commission must take the necessary steps which follow from the annulment and reimburse the applicant the equivalent in Belgian francs of 85% of the sum of FF 400, with interest at the statutory rate from 11 November 1987, the day following acknowledgment of the receipt of the complaint .
32 The applicant' s claim for damages of BFR 8 000 in compensation for the non-material and material damage which he claims he suffered as a result of the decision at issue must be rejected as unfounded, since he has not supplied any evidence of the damage . It must be stated that, in any event, this judgment constitutes adequate compensation for any non-material damage .

Costs
33 Under Article 69(2 ) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs . Since the Commission has failed in its submissions, it must be ordered to pay the costs .

On those grounds,
THE COURT ( First Chamber )
hereby :
( 1 ) Annuls the implied decision rejecting the applicant' s complaint of 4 November 1987 and the decision of the 2 September 1987 by which the office responsible for settling claims of the Joint Sickness Insurance Scheme refused to reimburse him, at the rate of 85%, the cost of an organotherapeutic preparation;
( 2 ) Orders the Commission to pay the costs .