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

OPINION OF ADVOCATE GENERAL

MAZÁK

delivered on 16 October 2008 ¹(1)

Case C-88/07

Commission of the European Communities

v

Kingdom of Spain

(Measures having equivalent effect National measures derogating from the principle of the free movement of goods within the Community)

I Introduction

1. In the present proceedings, the Commission of the European Communities has brought before the Court an action under Article 226 EC seeking a declaration that,

by withdrawing from the market a number of herbal products lawfully produced and/or marketed in another Member State, under an administrative practice consisting in withdrawing from the market any product with herbal constituents not included in the annex to the Ministerial Order of 3 October 1973 on the ground that it is deemed to be a medicinal product marketed without the requisite authorisation,

and by not communicating that measure to the Commission,

the Kingdom of Spain has failed to fulfil its obligations under Articles 28 EC and 30 EC and Articles 1 and 4 of Decision No 3052/95/EC of the European Parliament and of the Council of 13 December 1995 establishing a procedure for the exchange of information on national measures derogating from the principle of the free movement of goods within the Community. (2)

2. The Court is, in essence, invited to rule on the method of classifying a product within the category of medicinal products. At issue in this case is not an assessment of the merits of classifying a particular product as a medicinal product, (3) but an evaluation of the method of classification.
3. In all cases, how a product is to be classified is a matter for the Member States. However, the path by which a decision on that classification is reached is laid down by the case-law of the Court.
4. The crux of the present action brought before the Court by the Commission is the classification of a product as a medicinal product. If a Member State applies the body of rules relating to medicinal products to a product which is not medicinal, that is, in principle, a measure having equivalent effect which is prohibited between Member States.
5. Consequently, I consider that the following three questions must be answered. First, are the Spanish authorities correct to classify herbal products within the category of medicinal products? Secondly, does such action by the authorities constitute an administrative practice which is a hindrance to the free movement of goods within the meaning of the Court's case-law? Thirdly, can any such hindrance be justified under Article 30 EC?

II Legal background

A Community law

6. The Treaty establishing the European Community provides for the free movement of goods between Member States. Obstacles to free movement can be justified only on grounds which stem from Article 30 EC and the Court's case-law.
7. Under Decision No 3052/95, Member States are obliged to notify measures which prevent the free movement or placing on the market of a particular model or type of product lawfully produced or marketed in another Member State within a period of 45 days from the date when that measure is taken.
8. Medicinal products are a special category of goods. Directive 2001/83/EC of the European Parliament and of the Council of 6 November 2001 on the Community code relating to medicinal products for human use, (4) is one of the measures for the achievement of the objective of the free movement of medicinal products.
9. The definition of a medicinal product is to be found in Article 1(2) of Directive 2001/83 as amended by Directive 2004/27/EC of the European Parliament and of the Council of 31 March 2004. (5) According to that definition, a medicinal product is:

(i) any substance or combination of substances presented as having properties for treating or preventing disease in human beings; or

(ii) any substance or combination of substances which may be used in or administered to human beings either with a view to restoring, correcting or modifying physiological functions by exerting a pharmacological, immunological or metabolic action, or to making a medical diagnosis'.

10. It follows from that definition that a product can be classified as a medicinal product either 'by presentation' in accordance with part (i) of the definition or 'by function' in accordance with part (ii) of the definition.
11. Directive 2004/24/EC of the European Parliament and of the Council of 31 March 2004 (6) inserted in Article 1 of Directive 2001/83 new definitions relating to the concepts of 'traditional herbal medicinal product', 'herbal medicinal product', 'herbal substances' and 'herbal preparations'.
12. The effect of the first paragraph of Article 6(1) of Directive 2001/83, as amended by Regulation (EC) No 1901/2006 of the European Parliament and of the Council of 12 December 2006, (7) is that no medicinal product may be placed on the market unless prior authorisation has been obtained.
13. However, Article 16a of Directive 2001/83, inserted by Directive 2004/24, establishes a simplified registration procedure for traditional herbal medicinal products.

B National legislation

Law No 29/2006

14. The regulation of medicinal products is primarily governed by Law No 29/2006 of 26 July 2006 on guarantees and the rational use of medicinal and health products, which repealed Law No 25/1990 of 20 December 1990 on medicinal products.
15. Under Article 8(a) of Law No 29/2006, a medicinal product for human use is any substance or combination of substances presented as having properties for treating or preventing disease in human beings which may be used in or administered to human beings either with a view to restoring, correcting or modifying physiological functions by exerting a pharmacological, immunological or metabolic action, or to making a medical diagnosis.
16. If a product is classified as a medicinal product, that product cannot be placed on the market without prior authorisation.
17. As regards medicinal products based on medicinal herbs, it is clear from Article 51(1) of Law No 29/2006 that, as a general rule, they are subject to the same body of rules as other medicinal products. Different rules apply to plants which are poisonous, in which case sale to the public is restricted or prohibited, and to plants which are traditionally regarded as medicinal (8) which may be freely sold to the public, provided that when presented no reference is made to any therapeutic, diagnostic or preventive properties.
18. Plants regarded as poisonous are listed in Ministerial Order SCO/190/2004 of 28 January 2004, establishing a list of plants the sale of which to the public is prohibited or restricted because of their toxicity.
19. As regards plants traditionally regarded as medicinal, the list to be established pursuant to Article 51(3) of Law No 29/2006 does not exist. The Spanish authorities use, according to paragraph 42 of their defence, as an 'instrumento útil' (useful tool), the list of 119 plants to be found in the annex to the Ministerial Order of 3 October 1973 on the creation of a register of medicinal herb-based preparations. According to that order, products containing a single medicinal herb referred to in the annex and clearly designated on the external packaging of the product are exempted from the obligation to register.

III Pre-litigation procedure and procedure before the Court

20. The Commission's action in this case was prompted by three complaints from the Spanish undertakings Ynsadiet SA, Laboratorios Tegor SL and Laboratorios Taxón SL in 2004. The undertakings stated that more than 200 products in total were withdrawn from the Spanish market between 2002 and 2003 due to the fact that those products had no authorisation, since the Agencia Española de Medicamentos y Productos Sanitarios (the Spanish Drugs and Health Products Agency) classified them as medicinal products. The basis of classification was generally that the products concerned were produced using herbs which were not included in the annex to the Ministerial Order of 3 October 1973. According to the undertakings concerned, those products are freely on sale and are legally marketed in other Member States, in the majority of cases as food or dietary supplements.
21. On 21 March 2005, since the Commission considered that the Spanish authorities had not complied with their obligations under Articles 28 EC and 30 EC and Articles 1 and 4 of Decision 3052/95, by ordering products to be withdrawn from the market solely because of their having herbal constituents which were not listed in the annex to the Order of 3 October 1973 and by automatically deeming those products to be medicinal products marketed without any prior authorisation, it sent, in accordance with Article 226 EC, a letter of formal notice to the Kingdom of Spain. The Commission was not satisfied with the observations submitted by the Kingdom of Spain in its reply of 19 May 2005, and sent it a reasoned opinion dated 10 April 2006 in which the Commission requested that the Spanish authorities take the necessary measures within a period of two months.
22. Notwithstanding the arguments put forward by the Spanish authorities in their reply of 12 June 2006 to the reasoned opinion, the Commission brought this action in which it asks the Court to declare that the Kingdom of Spain has failed to fulfil its obligations under Articles 28 EC and 30 EC and Articles 1 and 4 of Decision No 3052/95 and to order the Kingdom of Spain to pay the costs.
23. On the basis of arguments submitted in its defence and in its rejoinder, the Kingdom of Spain contends that the Court should dismiss the action and order the Commission to pay the costs.
24. The Commission requested a hearing, which was held on 25 June 2008.

IV Assessment

A The relationship of 'product', 'herbal product' 'medicinal product' and 'herbal medicinal product'

25. In the present case a 'product' is a general expression which is, as a rule, linked to the principle of the free movement of goods between Member States. That objective is pursued by Articles 28 EC and 29 EC, which prohibit quantitative restrictions on imports and exports and all measures having equivalent effect between Member States.
26. Using differing criteria, it is possible to define many categories of products which, for various reasons, require special rules governing their free movement. At issue in the present case are two categories of products. The first category is that of 'medicinal products' and the second is that of 'herbal products'. (9)
27. The category of 'herbal products' is very extensive. As the Kingdom of Spain correctly states, that category includes, for example, cleaning products, foodstuffs and cosmetics. In Community law there is no definition of the category and there are no special rules concerning the free movement of that category of products.
28. A 'medicinal product' is a special category of product. Its specific feature is that the free movement of that category of products between Member States must be adapted to the requirement that public health be protected.
29. In the area of medicinal products, harmonisation at Community level was achieved by Directive 2001/83. It is clear from that directive, but also from the Court's case-law, that every medicinal product is a product, but, according to the Court's case-law, (10) no product is a medicinal product unless it is covered by one of the two definitions given by Directive 2001/83, either 'by presentation' or 'by function'.
30. It is plain that the two categories of products mentioned above can overlap. Logic dictates that there is a group of products which are simultaneously both medicinal products and herbal products. In my opinion, it can be concluded that a product belonging to that group is a 'herbal medicinal product'.
31. If I may clarify that point, a herbal medicinal product is merely a product which is covered by one of the two definitions of a medicinal product given by Directive 2001/83 and which exclusively has as its active constituents one or more herbal substances or one or more herbal preparations, or one or more such herbal substances in combination with one or more such herbal preparations.
32. It follows that the classification of products as herbal medicinal products is subject to two absolute conditions both of which must be met: the condition of being a medicinal product and the condition as to content. If a product contains one or more herbal substances or one or more herbal preparations, or one or more such herbal substances in combination with one or more such herbal preparations and if it does not at the same time satisfy the conditions of the definition of medicinal product by presentation or by function, it cannot be classified as a medicinal product nor, consequently, as a herbal medicinal product. That means that not all products with herbal constituents are automatically medicinal products or, consequently, herbal medicinal products.

B The method of classification of a product in the category of medicinal products

33. Given that in the present case, the products were classified as medicinal products on the basis of their function, I shall therefore consider the method of classification of products in terms of the definition of medicinal product by function.
34. As is clear from the Court's case-law, (11) contrary to the definition of medicinal product by presentation, whose broad interpretation is intended to protect consumers from products which do not have the effectiveness they are entitled to expect, the definition of medicinal product by function is designed to cover products whose pharmacological properties have been scientifically established and which are genuinely designed to make a medical diagnosis or to restore, correct or modify physiological functions.
35. The Court has also held (12) that the national authorities have the dominant role in the process of classifying a product within the group of medicinal products. It is their task, subject to review by the courts, to determine, on a case by case basis, whether or not each product is a medicinal product.
36. As I have already stated, (13) even though it is the national authorities which determine the classification of a product, the path by which that decision is reached stems from the case-law of the Court. On several occasions the Court has held that in order to classify a product as a medicinal product, it is necessary to take into consideration all of its characteristics. (14) The Court has by way of illustration listed some of them:

the composition of a product,

the pharmacological properties of a product as they may be ascertained in the current state of scientific knowledge,

the way in which a product is used,

the extent to which a product is sold,

a product's familiarity to consumers,

the risks which use of a product may entail.

37. The Commission objects that the Kingdom of Spain does not follow that method of classification, since the presence of herbal constituents is the sole reason for a product's classification as a medicinal product. The Commission states that the Spanish authorities systematically classify a product as a medicinal product by function due to the mere fact that a certain type of herb is present, without basing that decision on a detailed analysis.
38. The Kingdom of Spain does not agree with that conclusion. It contends that a classification of the products concerned by the Agencia Española de Medicamentos y Productos Sanitarios was based on detailed analyses of each product focussing on their composition (for example, herbs, presence of extracts), their pharmacological properties, their labelling, their presentation, and so forth.
39. On that point, I agree with the Commission that the Kingdom of Spain has not provided evidence for that assertion.
40. In support of its defence, the Kingdom of Spain has submitted a report produced by the Agencia Española de Medicamentos y Productos Sanitarios in which are set out the possible effects on human health of 34 plants. In order to demonstrate that a classification of products as medicinal products was based on detailed analyses of each product, the Kingdom of Spain also submitted, by way of example, the analyses relating to two products Inmuplan and Basic Herbal. Those analyses show that those products contain herbs which may have harmful effects on human health. As regards the effects of the herbs, the analyses refer to the study undertaken by the Agencia Española de Medicamentos y Productos Sanitarios.
41. It must be pointed out that that report and those analyses are the analyses of 'herbs' (herbal species) which are plainly constituents of the products which were withdrawn from the market. The Kingdom of Spain has not provided any detailed analysis, in accordance with the Court's case-law, (15) of the 'products' containing those herbs which could enable those products to be classified within the group of medicinal products. As I have already stated above, (16) not all products which have herbal constituents, even if the herbs concerned might possibly have effects harmful to human health, are automatically medicinal products or, consequently, herbal medicinal products.
42. I can imagine that, after detailed analyses, some of the products concerned might be classified as medicinal products, but that decision must be taken in accordance with the requirements of Community law, and that has not happened.
43. A declaration by the Court in the present case that there has been a failure by the Kingdom of Spain to fulfil its obligations would not be an affirmation that the products concerned are definitely not medicinal products. It would be an affirmation that a method of classifying a product as a medicinal product based on the product concerned having herbal constituents which are not listed in the annex to the Ministerial Order of 3 October 1973 did not comply with the requirements of Community law.
44. The number of products (17) which are classified as medicinal products by the Spanish authorities using a method which does not comply with Community law provides, in my opinion, sufficient grounds to conclude that the Spanish authorities are employing a systematic administrative practice, which hinders the free trade of goods and which therefore constitutes a measure having equivalent effect prohibited by Article 28 EC.
45. The Commission however did not accurately specify in its application the number of products affected by that administrative practice. According to the Commission, that practice applies to 'any' product with herbal constituents which are not listed in the annex to the Ministerial Order of 3 October 1973. Given that the category of products with herbal constituents is very extensive, reference, as the Commission clarified in its reply, (18) to a 'series of products' is closer to the truth.

C Justification of a hindrance to the free trade of goods on grounds of protection of public health

46. The question arises whether, as alternatively contended by the Spanish Government, the administrative practice of the Spanish authorities which hinders the free trade of goods may none the less be justified on grounds of protection of public health within the meaning of Article 30 EC.
47. According to settled case-law, (19) a hindrance to the free exchange of goods can be justified only on one of the grounds of public interest listed in Article 30 EC or by one of the overriding requirements referred to in the case-law of the Court, provided in particular that that measure is appropriate for securing the attainment of the objective pursued and does not go beyond what is necessary in order to attain it.
48. As regards specifically the protection of public health as a ground of justification, the Court has clearly stated (20) that, in exercising their discretion relating to the protection of public health, Member States must comply with the principle of proportionality. The means which they choose must therefore be confined to what is actually necessary to ensure the safeguarding of public health; they must be proportional to the objective thus pursued, which could not have been attained by measures which are less restrictive of intra-Community trade.
49. In my opinion, (21) the present case involves an administrative practice which has been systematically adopted by the Spanish authorities. Referring to the case'law of the Court, (22) I find that the administrative practice employed by the Spanish authorities is disproportionate because the systematic nature of that practice does not make it possible to identify and assess a real risk to public health, which requires a detailed assessment on a case'by'case basis of the effects which the product concerned might have.

D Failure to fulfil the obligation to give notice of an obstacle to the free movement of goods to the Commission

50. In accordance with the case-law of the Court, (23) Decision No 3052/95 defines as a 'measure' which must be notified to the Commission any measure taken by a Member State, except for judicial decisions, which has the effect of restricting the free movement of goods lawfully produced or marketed in another Member State, regardless of its form or the authority from which it emanates.
51. As I have already found, (24) the contested administrative practice of the Spanish authorities hinders the free trade of goods and must therefore be regarded as a 'measure' within the meaning of Article 1 of Decision No 3052/95 which must be notified to the Commission.
52. In support of its defence, the Kingdom of Spain contends that the Spanish authorities were not aware of the fact that the products which were withdrawn from the market and which were produced in Spain were marketed at the time in one or more other Member States. The undertakings manufacturing the products concerned did not submit to the Spanish authorities any documents demonstrating that the products subject to withdrawal were legally marketed in another State of the Community.
53. I cannot accept that argument. In my opinion, the authorities of a Member State are obliged to consider whether measures which manifestly obstruct the free movement of goods on the domestic market may not have the same effect on the free movement of goods between Member States, particularly when, as in the present case, the national authorities have information supplied by undertakings.

V Conclusion

54. In light of the foregoing considerations, I therefore propose that the Court should:

declare that by withdrawing from the market a number of herbal products lawfully produced and/or marketed in another Member State, under an administrative practice consisting in withdrawing from the market a series of products with herbal constituents not included in the annex to the Ministerial Order of 3 October 1973 on the ground that they are deemed to be medicinal products marketed without the requisite authorisation and by not notifying that measure to the Commission, the Kingdom of Spain has failed to fulfil its obligations under Articles 28 EC and 30 EC and Articles 1 and 4 of Decision No 3052/95/EC of the European Parliament and of the Council of 13 December 1995 establishing a procedure for the exchange of information on national measures derogating from the principle of the free movement of goods within the Community;

order the Kingdom of Spain to pay the costs.

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1 Original language: French.

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2 OJ 1995 L 321, p. 1.

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3 As, for example, in Case C-290/90 Commission v Germany [1992] ECR I-3317 and Case C-319/05 Commission v Germany [2007] ECR I-9811.

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4 OJ 2001 L 311, p. 67.

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5 OJ 2004 L 136, p. 34.

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6 OJ 2004 L 136, p. 85.

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7 OJ 2006 L 378 p. 1.

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8 By way of explanation of Article 51 of Law No 29/2006, the Kingdom of Spain uses in its statement in defence the expression 'medicamentos vegetales' (herbal medicinal products) but the article concerned uses the expression 'planta' (plant).

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9 To my mind, the expressions 'product based on herbal species' and 'herbal product' are synonymous, as are the expressions 'product based on herbal species' and 'product containing herbal species'.

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10 In Case 227/82 Van Bennekom [1983] ECR 3883, paragraph 23, the Court held that a product which is covered by neither the first nor the second part of the community definition of a medicinal product may not be regarded as a medicinal product within the meaning of Directive 65/65. Given that Directive 2001/83 which repealed Directive 65/65 essentially contains the same definition of medicinal product, that statement also applies in relation to Directive 2001/83.

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11 See Case C-319/05 Commission v Germany, paragraph 61.

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12 See, to that effect, Case C-112/89 Upjohn [1991] ECR I-1703, paragraph 23; Case C-290/90 Commission v Germany, paragraph 17; and Case C-319/05 Commission v Germany, paragraph 55.

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13 See above, point 3.

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14 See, in particular, Case C-60/89 Monteil and Samanni [1991] ECR I-1547, paragraph 29; Upjohn, paragraph 23; Case C-290/90 Commission v Germany, paragraph 17; Joined Cases C-211/03, C-299/03 and C-316/03 to C-318/03, HLH Warenvertrieb and Orthica [2005] ECR I-5141, paragraph 51; and Case C-319/05 Commission v Germany, paragraph 55.

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15 See cases referred to above in footnotes 11 and 12.

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16 See above, point 32.

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17 It must be pointed out that the Spanish authorities withdrew from the Spanish market more than 200 products in total (according to the list of products submitted by the Kingdom of Spain, 206 products, to be exact) of Ynsadiet SQ, Laboratorios Tegor SL and Laboratorios Taxón between 2002 and 2003.

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18 The Commission has clarified the complaint made against the Kingdom of Spain: the administrative practice which consists of systematically classifying as 'medicinal products by function' a series of herbal products not listed in the annex to the Ministerial Order of 3 October 1973 when none of those product have previously been subject to a detailed analysis, as is required by the Court's case-law, constitutes a measure having equivalent effect to a quantitative restriction, prohibited by Article 28 EC, given that the establishment of the mere presence of certain substances in the composition of a product is not sufficient to prove that any of the conditions laid down in Article 30 EC which might justify that practice are satisfied.

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19 See, in particular, Case C-432/03 Commission v Portugal [2005] ECR I-9665, paragraph 42.

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20 See, in particular, Van Bennekom, paragraph 39; Case C-192/01 Commission v Denmark [2003] ECR I-9693, paragraph 45; Case C-387/99 Commission v Germany [2004] ECR I-3751, paragraph 71; and Case C-150/00 Commission v Austria [2004] ECR I-3887, paragraph 88.

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21 See above, point 44.

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22 See, in particular, Commission v Denmark, paragraph 56; Case C-387/99 Commission v Germany, paragraph 79; and Commission v Austria, paragraph 96.

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23 See, to that effect, Joined Cases C-388/00 and C-429/00 Radiosistemi [2002] ECR I-5845, paragraph 68; and Commission v Portugal, paragraph 57.

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24 See above, point 44.