Report for the Hearing delivered in Case 0-169/88

I — Facts and relevant legislation

On 14 July 1987 the applicant, Maurice Prelle, applied to the office responsible for settling claims in Brussels for reimbursement of FF 400 paid for a pharmaceutical preparation prescribed by Dr Jourdan, of Ruoms, France, and made up by a homeopathic pharmaceutical laboratory.

The pharmaceutical preparation at issue, which was prescribed for Mr Prelle's wife, is an ‘Organotherapeutic’ product made from extracts of organs (bone, liver, ovary, ligament) and novocaine, for the treatment of rheumatoid arthritis.

The product at issue is administered by injection, the cost of which is not reimbursed by the social security in France.

By a decision of 2 September 1987 (statement No 66), the office responsible for settling claims refused to reimburse those pharmaceutical expenses.

Upon receiving notification of the decision, Mr Prelle requested the Joint Sickness Insurance Scheme, by a letter of 28 September 1987, to inform him of the reasons for the refusal.

In reply to that request, he was sent a copy of the adverse opinion of the medical officer of the office responsible for settling claims, dated 19 July 1987, which stated, by way of opinion: ‘ointment the cost of which is not reimbursable (organotherapy)’.

On 4 November 1987 the applicant lodged a complaint pursuant to Article 90(2) of the Staff Regulations, which was registered on 9 November 1987; in it he requested the Commission to ask the office responsible for settling claims to take into consideration the first paragraph of Section V of Annex I to the Rules on Sickness Insurance for Officials of the European Communities, which provides that the cost of pharmaceutical products is to be reimbursed at the rate of 85%, except for the cost of those products listed in the second paragraph of Section V, of which the pharmaceutical preparation at issue is not one.

Under the first and second paragraphs of Section V of Annex I to the Rules, ‘the cost of pharmaceutical products prescribed by the practitioner shall be reimbursed at the rate of 85% ... ’, but ‘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’.

On 7 December 1987 Mr Prelle wrote to the Management Committee of the Joint Sickness Insurance Scheme in order to draw its attention to the fact that the reference to an ointment prescribed by Dr Jourdan in the medical officer's opinion was an error, since the ointment had already been reimbursed in statement No 65.

He pointed out that the product in question was not an ointment but an ‘organotherapeutic’ injectable product and that the fees of the nurse who injected it had been paid by statement No 70.

On 13 June 1988 the Commission rejected the complaint in accordance with Opinion 5/88 of 2 March 1988 of the Management Committee of the Sickness Insurance Scheme — which had been consulted pursuant to Article 16(2) of the Rules — principally on the ground that the organotherapeutic preparation was not a pharmaceutical product and its cost was therefore not reimbursable under Section V.

The Commission based its conclusion on an opinion to that effect of the medical officer of the office responsible for settling claims and the Medical Council, which was consulted by the Management Committee.

The decision and the grounds upon which it was based were notified to Mr Prelle by a note of 21 June 1988, receipt of which was acknowledged on 24 June 1988.

On 17 June 1988, in other words before the decision was received, Mr Prelle brought the present action, which was registered at the Court Registry on 20 June 1988, seeking annulment of the implied refusal of the appointing authority to uphold his complaint.

On 23 September 1988, the applicant submitted to the Commission pursuant to Article 90(1) of the Staff Regulations a request that it should inform him, first, of the criteria used by the organs of the Joint Sickness Insurance Scheme in determining whether a therapeutic substance prescribed by a doctor and made up by a pharmacist is a pharmaceutical product the cost of which can be reimbursed and, secondly, how members of the scheme are or should be informed of what those criteria are.

II — Procedure and conclusions of the parties

The applicant claims that the Court should:

i) declare that by rejecting the application for reimbursement of the pharmaceutical expenses at issue the office responsible for settling claims, and subsequently the appointing authority, infringed Section V of Annex I to the Rules governing the Joint Sickness Insurance Scheme;

ii) annul that decision for failure to state the grounds on which it is based (Article 25 of the Staff Regulations of Officials) and for infringement of the aforementioned Rules;

iii) order the Commission to pay the applicant:

1) 85% of the equivalent in Belgian francs of FF 400;

2) interest on that sum at the statutory rate from 11 November 1987, the day following acknowledgement of the receipt of the complaint;

3) the sum of BFR 8000 as damages, together with all the costs of the case.

The Commission concludes that the Court should:

i) reject the application as unfounded;

ii) award costs as provided for by law.

Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General the Court (First Chamber) decided to open the oral procedure without any preparatory inquiry. However, it asked the Commission and the applicant to submit certain information and to reply to certain questions. The request was complied with within the time allowed.

III — Submissions and arguments of the parties

Admissibility

The Commission observes that the action is admissible, even though it was brought prior to notification of the express decision rejecting the complaint, on 24 June 1988.

Since on 13 June 1988 the Commission adopted an express decision rejecting the complaint within the time-limit for instituting proceedings, which, taking into account the six-day period of grace based on distance, expired on 15 June 1988, pursuant to Article 91(3) of the Staff Regulations a new time-limit of three months started to run for the applicant from the date of notification of the express decision rejecting the complaint.

The action therefore had to be brought before 24 September 1988 at the latest; it was brought on 20 June 1988.

Substance

The applicant relies on two submissions in support of his application.

A — Infringement of the first and second paragraphs of Section V of Annex I to the Rules on Sickness Insurance for Officials of the European Communities

The applicant submits that under the first paragraph of Section V, when a product has been prescribed by a practitioner and made up by a pharmacist the office responsible for settling claims is required to reimburse the cost of that product at the rate of 85% unless it is expressly referred to in the second paragraph of Section V, since in his view the list of products not considered as pharmaceutical products in the second paragraph is exhaustive.

The applicant claims that since organotherapeutic products do not appear in that list, they are pharmaceutical products the cost of which is reimbursable according to the first paragraph of Section V.

He considers, therefore, that by refusing to reimburse the cost of the product at issue the administration is seeking to replace the statutory scheme laid down in Section V of Annex I, which guarantees reimbursement of medicines which are freely prescribed by the attending physician and supplied by a qualified pharmacist, with an arbitrary scheme based on the subjective preferences of its medical service. Consequently, the principles of legality and the free choice of medicine by the attending physician are at issue in this case. The amount of money involved in the case is only small, but its outcome will also determine whether or not his wife will be able to resume treatment for the complaint, which has reappeared following a long period without treatment.

The applicant claims, therefore, that the administration is not completely free to add, at its own discretion, exceptions which members are unaware of.

The applicant points out that unlike the Member States which it cites as a precedent, the Commission has never published lists of non-reimbursable products. In his opinion, it is pointless and ridiculous to adopt general rules which specify the cases in which reimbursement is not made if the administration can then add to the unpublished list of exceptions as it pleases.

According to the Commission, that interpretation cannot be upheld. Section V provides that only pharmaceutical products prescribed by a practitioner are reimbursable; that condition is obviously not met when the practitioner prescribes a product which cannot be considered to be a pharmaceutical product.

It states that, faced with the extremely difficult task of providing a positive definition of the term ‘pharmaceutical products’ in a piece of legislation which is applied world-wide, the persons who drafted the Community Rules simply gave, in the second paragraph of Section V, a non-exhaustive list of a number of products which that term obviously does not cover. However, that does not mean that when a product is prescribed by a practitioner and then made up and sold by a pharmacist, medical officers attached to the office responsible for settling claims have no power at all to determine whether or not that product is reimbursable.

According to the Commission, that interpretation is confirmed by an analysis of national social security schemes. No national social security scheme reimburses the cost of every product, regardless of what it is, merely upon presentation of the medical prescription and of proof that it was purchased from a pharmacy. All the Member States exercise control over the range of medicines which are reimbursed by the social security scheme; that control is exercised by means of lists of reimbursable medicines or lists of non-reimbursable medicines. Those lists relate in particular to industrially manufactured proprietary medicinal products which, after a scientific evaluation of their quality, safety and effectiveness, may be placed on the market under authorization obtained pursuant 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).

Magistral pfreparations, made up specially by a pharmacist to a medical prescription, may also be covered by the health insurance schemes of the Member States if they are prepared in accordance with a formula which appears in the national pharmacopoeia or include — or do not include — active ingredients which appear in a positive or negative list drawn up for that purpose such as, for example, the official pharmaceutical schedule in Belgium.

With regard to homeopathic medicines and other alternative treatments, which are not officially recognized in some of the Member States, the Commission observes that in the countries where the cost of such treatments is reimbursed they are closely supervised by the medical officers of the sickness funds.

Although it is true that the Joint Sickness Insurance Scheme of the European Communities is an autonomous scheme, it is equally clear that the persons who drafted the rules at issue did not intend, as the applicant suggests they did, to depart radically from the principles upon which the national health insurance schemes are based.

The Commission infers from that that reimbursement for a product as a pharmaceutical product is subject to a general evaluation to be carried out by the competent bodies of the Joint Sickness Insurance Scheme, and it claims that there is no error in law if the evaluation takes account not only of the curative and preventative properties of the product in question but also of the degree of therapeutic benefit obtained therefrom.

That interpretation is confirmed by Section XV(2) of Annex I to the Rules, which provides that ‘expenses relating to treatments considered by the office responsible for settling claims, after its medical officer has been consulted, where necessary, to be non-functional, superfluous or unnecessary shall not be reimbursed’.

The Commission points out that in the present case the medical officer of the office responsible for settling claims and the Medical Council took the view that the product in question was not a pharmaceutical product the cost of which was reimbursable since it did not have curative or preventative properties or, at least, exhibit a sufficient degree of therapeutic benefit in accordance with current scientific standards, a conclusion which is identical to the conclusion reached by the Management Committee of the Joint Sickness Insurance Scheme. Therefore, according to the Commission, there cannot be said to be any manifest error of assessment in the Decision of 2 September 1987 of the office responsible for settling claims, confirmed by the express decision rejecting the complaint.

The applicant replies that the argument relating to Section XV(2) of Annex I was raised belatedly in the statement of defence and that it is irrelevant, since the contested product cannot be described as ‘nonfunctional’, because it gave excellent results, and since it has not been proved that it is ‘superfluous’ or ‘unnecessary’.

B— Infringement of the second paragraph of Article 25 of the Staff Regulations on the ground that there was no statement of reasons

The applicant claims that, in contravention of the second paragraph o. Article 25 of the Staff Regulations, the decision rejecting the applicant's complaint adopted on 2 September 1987 (statement No 66) by the office responsible for settling claims did not state any ground at all for the rejection and merely referred to ‘non-reimbursable services’.

The Commission claims that it is undeniably clear from the statement of 2 September 1987, supplemented by the staff memorandum of 26 October 1987, which was sent to the applicant, that it is the very nature of organotherapeutic substances and the administration's interpretation of Section V of Annex I which preclude the requested reimbursement of costs.

The applicant was aware of that fact, as is shown by the letter which he sent on 21 February 1988 to Mr Valsesia, Director of Personnel in DG IX.

Referring to the judgment of the Court of 17 December 1981 in Case 791/79 Demont v Commission [1981] ECR 3105, paragraph 12, the Commission takes the view that, taking into account the administration's heavy work-load, ‘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’.

According to the Commission, the requirement of Article 25 of the Staff Regulations was in any event met in the present case since, moreover, the reply to the complaint made sufficiently clear the reasons why Mr Prelle's claim was rejected.

With regard to the judgment in Demont cited by the Commission in support of its claim that the applicant was informed of the grounds for the rejection of his request in an indirect and supplementary way, the applicant replies:

a) First, that the medical service has, from the outset, confused two products: the ointment and the injectable product, so that the alleged statement of grounds in the opinion given by that service ‘ointment the cost of which is not reimbursable (organotherapy)’ did not even concern the product at issue, namely the injectable product, and was so concise that it did not allow him to draw any conclusion at all as to whether Section V of Annex I was exhaustive or merely indicative;

b) Secondly, that contrary to the situation in Demont, in which the applicant challenged a 1978 decision and the defence cited two earlier staff memoranda of 1975 and 1976, there was no way he could have known that the product, which he knew to be effective, was considered not to be a pharmaceutical product, as shown by his letter of 31 March 1988 to Mr Valsesia in which he expressed his regret that his interpretation of Section V of Annex I had simply been ignored, even at the stage at which the Management Committee delivered its opinion. There was thus no way he could have been ‘informed’ of an interpretation of Section V of Annex I which had not even been outlined to him.

The applicant also refers to the case-law of the French Conseil d'État (State Council), under which an adverse decision must set out the grounds upon which it is based and those grounds must, except in circumstances of extreme urgency, be notified at the same time as the decision; late notification in court will not save the decision from annulment.

The Commission replies that the error as to the form of the product, committed at the start of the procedure by the medical officer, when he referred to it as an ointment rather than an injectable product, is not such as to change the substance of the decision at issue or its lawfulness.

According to the Commission, Mr Prelle's letter of 21 February 1988 to Mr Valsesia clearly shows that he was aware of the fact that it was the very nature of organotherapeutic substances and the administration's interpretation of Section V of Annex I to the Rules, with which the applicant was quite familiar, which precluded the requested reimbursement.

Referring to the judgment of the Court of 29 September 1976 in Case 9/76 Morello v Commission [1976] ECR 1415, paragraph 11, the Commission claims that, in any event, the applicant ‘can have no legitimate interest in obtaining the annulment, on the ground of the absence or inadequacy of the reasons on which it is based, of a decision which could certainly be confirmed in substance, in the absence of a mistake of law or of fact’, were it to be annulled.

IV — Replies to the questions

Questions put to the Commission

1) Asked to explain why the office responsible for settling claims refused to reimburse the cost of the injectable organotherapeutic product when it had agreed to reimburse the fees of the nurse who had injected that product (account No 70) and the cost of an organotherapeutic ointment prescribed by Dr Jourdan (account No 65), the Commission replies that: The Commission emphasizes that only the remainder of the invoiced prescription ought to have been reimbursed, namely FF 77.25, in respect of a preparation which is reimbursable under the Joint Sickness Insurance Scheme. The reimbursement at the rate 85% of the total amount of FF 193.55 was therefore due to a classification error.

a) the refusal to reimburse the cost of the injectable organotherapeutic product was based on the ground that the product in question is not to be regarded as a pharmaceutical product within the meaning of the first paragraph of Section V of Annex I to the Rules;

b) the abovementioned nurse's fees were reimbursed pursuant to Section X(1) of Annex I to the Rules, which provides that ‘the fees for treatment by medical auxiliaries shall be reimbursed at the rate of 80% on condition that it is prescribed by the practitioner and provided by a person legally authorized to exercise the profession’. The Commission adds that in its opinion the fact that the cost of the product injected is not reimbursable because it is not considered to be a pharmaceutical product does not mean that reimbursement of the fees for treatment by the nurse must be refused, since that treatment was prescribed by the practitioner and provided by a person authorized by law to exercise the profession;

c) the cost of the organotherapeutic ointment — FF 116.30 — ought not to have been reimbursed, as was pointed out by G. Jentges, of the office responsible for settling claims, in his memorandum of 11 February 1988 to Mr Roth, President of the Management Committee of the Sickness Insurance Scheme, in view of the negative opinion delivered by the medical officer.

2) Asked whether it had informed practitioners and members that the cost of organotherapeutic products is not considered to be reimbursable under the regulations, the Commission stated that the Medical Council had studied the question of the reimbursement of organotherapeutic products on a number of occasions at the request of the Management Committee and that when the matter was last considered, on 2 March 1989, the Medical Council agreed that ‘the cost of the treatments in question should not be reimbursed, since there are no serious studies which show them to be effective' but that it ’nevertheless wished to contact professors of pharmacology again in order to obtain their opinions concerning the methods in question, and to discuss the matter again at its next meeting'. According to the Commission, that shows that the managers of the Joint Sickness Insurance Scheme watch developments in the practices of the Member States very closely and that they take such developments into account when formulating the Rules, which are themselves developing all the time, and in day-to-day practice regarding the reimbursement of medical costs. The Commission adds, moreover, that the rules in question, published in a ‘Special Interinstitutional Notice — All places of employment’ of 1 September 1987, exclude, pursuant to Section V of Annex I, reimbursement of the cost of a number of products which are not considered to be pharmaceutical products. The list cannot be exhaustive, in view of the tens of thousands of products which exist not only in the Member States but throughout the world, to which the territorial scope of the Joint Sickness Insurance Scheme extends.

3) Asked whether the cost of organotherapeutic products is reimbursed by the social security in any of the Member States, and if so in which Member States, the Commission replies that, unless it is mistaken, no national health insurance scheme covers organotherapeutic products and that the office responsible for settling claims has recently asked the President of the Medical Council to make inquiries on that point with the national social security organizations.

4) Asked whether the cost of homeopathic products is reimbursed by the organs of the Joint Sickness Insurance Scheme, the Commission replies that they are reimbursable provided that they are prescribed by a practitioner and that they are products which cannot be confused with more concentrated products, for example oligo-elements or products used in phytotherapy, which are not reimbursable.

5) Asked whether, in recent years, claims have been submitted to the office responsible for settling claims in Brussels for reimbursement of the cost of organotherapeutic products and whether those claims have been systematically rejected because of the nature of the product, the Commission gives an affirmative reply both for the office in Brussels and the office in Ispra, subject to any classification errors such as that which occurred when the cost of the organotherapeutic ointment was wrongly reimbursed to Mr Prelle.

Questions put to the applicant

1) At the request of the Court, account No 70, by which the office responsible for settling claims agreed to reimburse the fees of the nurse who injected the contested product, was placed on file.

2) Asked whether it was the first time he had claimed reimbursement for the cost of an organotherapeutic product, the applicant replied that it was.

3) Asked whether the Commission had replied to his request of 23 September 1988, submitted pursuant to Article 90(1) of the Staff Regulations, the applicant informed the Court that the Commission had in fact replied by a letter of 6 December 1988, and he placed that letter on file.

Gordon Slynn

Judge-Rapporteur

1 Language of the case: French.