Licensing of pharmacies

Arecent opinion delivered by Advocate General Poiares Maduro sheds some light on the legality or otherwise of rules which restrict the number of pharmacies that can be licensed in any one particular area. Similar rules are applied locally by the authorities in the granting of licences for operating a pharmacy. The issue that has been recently examined relates to whether such restrictions breach EU law and in particular the fundamental right of freedom of establishment.

The facts of this particular case revolved around a refusal by Spanish authorities to grant a licence to two Spanish fully qualified pharmacists to open a pharmacy. Spanish law provides for a number of restrictions when it comes to the granting of licences for operating a pharmacy. These restrictions refer to a limit on the number of pharmacies in an area by reference to the population of that area and a geographical restriction preventing the opening of a pharmacy within 250 metres of another pharmacy.

The rules also set out criteria for distinguishing between competing candidate pharmacists and award points based on the professional and teaching experience of the candidates. When the matter was challenged before Spanish courts, the latter made a reference to the European Court of Justice, requesting guidance as to whether such rules are compatible with the principle of freedom of establishment as enshrined in the EC Treaty.

Advocate General Miguel Poiares Maduro opined that as a rule such restrictions are tant-amount to a restriction on the freedom of establishment and therefore as such breach Community law. Nonetheless, he also pointed out that such measures may be justified if they satisfy four conditions, namely, that they are applied in a non-discriminatory manner, are justified by requirements in the general interest, are suitable for attaining any objective which they pursue and are proportionate to such objective. The Advocate General then proceeded to declare the Spanish rules discriminatory on the basis of the fact that the Spanish rules favoured and gave priority to those pharmacists who have practiced in a particular region of Spain.

On the other hand, the Advocate General considered that as a rule population and geographical restrictions are justified because they have the objective of protecting public health by ensuring that good pharmaceutical services are provided in all areas. But since the Spanish rules were not being applied in a consistent and coherent manner, Advocate General Poiares Maduro concluded that the Spanish laws were in breach of Community law because they were not suitable for attaining the objective of protecting public health.

Insofar as the requisite of maintaining a minimum distance between pharmacies is concerned, Advocate General Poiares Maduro maintained that it is for the national court to determine whether the specific distance imposed is justified, bearing in mind a number of factors such as the degree of interference with the right of establishment and the nature of the public interest invoked as well as the proportionality of the measures being applied.

The Advocate General's opinion is not binding and one has to await the outcome of the judgment of the European Court of Justice for a binding decision on the matter. Nonetheless, such an opinion is useful in gauging the extent to which member states can seek to impose restrictions in the granting of licences for operating a pharmacy.

Dr Vella Cardona is a practising lawyer and a freelance consultant in EU, intellectual property, consumer protection and competition law. She is also a visiting lecturer at the University of Malta.

mariosa@vellacardona.com