In Case C-297/16 ‘CMVR’, the Romanian Court of Appeal referred two questions to the CJ stemming from Romanian national laws which grant veterinary practitioners an exclusive right to retail and use veterinary medicinal products and to own veterinary establishments.
The Advocate General has concluded that national rules which grant an exclusive right for veterinary practitioners to retail, use and administer veterinary medicines should be prohibited to the extent that they extend to non-prescription-only veterinary medicines and to the extent that they prevent pharmacists from retailing veterinary medicines (including prescription only veterinary medicines). Furthermore, rules that require sole or majority veterinary ownership of establishments that are permitted to retail veterinary medicines are prohibited. The Advocate General considered both restrictions to be precluded by Directive 2006/123 on services in the internal market.
Whilst this Opinion will not directly affect the UK where multiple retail channels of veterinary medicines are already permitted (dependant on their distribution category) and where ownership of veterinary practices has been already been deregulated, the Opinion could signal change for the wider distribution of veterinary medicines across the EU as well as a move towards wider corporate ownership of veterinary establishments.
Directive 2001/82 – the veterinary medicinal code – requires Member States to take all appropriate measures to ensure that the retail supply of veterinary medicinal products is conducted only by persons who are so permitted by the legislation of the Member State concerned. Further controls are placed on veterinary medicines which may only be dispensed against a prescription. This reflects the public interest in ensuring the safe prescription, administration and retail of veterinary medicinal products.
However, Directive 2006/123 requires Member States to ensure that, under their legal system, any requirement which “reserve[s] access to the service activity in question to particular providers by virtue of the specific nature of the activity” is not discriminatory, but instead is necessary and proportionate.
The Advocate General did not consider it to be necessary or proportionate for veterinary practitioners to have the sole right to retail as well as to prescribe prescription only veterinary medicines products. Instead, he considered it conceivable that other suitably qualified persons might also be allowed to retail such products – a point which is supported by practices in other Member States. The Romanian Government argued that this was not applicable as the role of a ‘veterinary pharmacist’ is not regulated in Romania. However, the Advocate General did not consider this to be sufficient grounds to explain why ‘regular’ pharmacists would not be suitably qualified.
The Advocate General also did not consider there to be an overriding reason in the public interest for a restriction on the ownership of veterinary establishments and concluded that such measures also went beyond what was necessary. He was not satisfied that such measures were necessary to safeguard the professional independence of vets (in response to concerns that corporate ownership may place too much focus on financial returns rather than the scope or quality of healthcare services delivered). In the Advocate General’s view, the quality of veterinary medicinal products or advice would not be detrimentally affected by non-veterinary ownership as legal requirements for veterinary professionals to be present when veterinary medicines are dispensed would act as a sufficient safeguard.
It is worth noting that there was a surge in corporate ownership of veterinary practices after practice ownership was deregulated in the UK. This led to consolidation of the industry with large corporates leveraging new economies of scale - the corollary of which was the decline in independent veterinary practice ownership. There is a separate debate as to whether such consolidation ultimately benefits the quality and availability of healthcare services to animals, but the potential for EU-wide corporate ownership appears to be increasing.
In conclusion, should the CJ follow the Advocate General’s Opinion, Member States that have preserved traditional veterinary practitioners’ monopolies to use, administer and retail veterinary medicinal products and to own veterinary practices may have to adapt their national legislation to bring it in line with EU law. Opening up retail channels for veterinary medicines should increase supply and competition whilst reducing prices of veterinary medicines for consumers in those Member States. Veterinary business models in such Member States may have to adapt to preserve their revenue – most likely by increasing prices of veterinary services.
We await to see if the CJ agrees with the Advocate General’s Opinion, but it seems likely as it would be consistent with the CJ’s approach to lower barriers to the distribution of veterinary medicines observed in Case C-114/15 Audace, and it would be in-line with the broader principles of free competition in a single market.