Lietuviškai
THE CONSTITUTIONAL COURT OF THE REPUBLIC OF
LITHUANIA
RULING
ON THE COMPLIANCE OF PARAGRAPH 2 OF ARTICLE 11 OF
THE REPUBLIC OF LITHUANIA LAW ON PHARMACEUTICAL
ACTIVITIES WITH THE CONSTITUTION OF THE REPUBLIC
OF LITHUANIA
14 March 2002
Vilnius
The Constitutional Court of the Republic of Lithuania,
composed of the Judges of the Constitutional Court Egidijus
Jarašiūnas, Egidijus Kūris, Zigmas Levickis, Augustinas
Normantas, Vladas Pavilonis, Jonas Prapiestis, Vytautas
Sinkevičius, Stasys Stačiokas, and Teodora Staugaitienė,
with the secretary of the hearing-Daiva Pitrėnaitė,
in the presence of:
the representative of the party concerned, the Seimas of
the Republic of Lithuania, who is Liucija Schulte-Ebbert, a
senior consultant to the Legal Department of the Office of the
Seimas,
pursuant to Paragraph 1 of Article 102 of the Constitution
of the Republic of Lithuania and Paragraph 1 of Article 1 of
the Republic of Lithuania Law on the Constitutional Court, on 6
March 2002 in its public hearing heard Case No. 23/2000 which
originated in a petition of the Higher Administrative Court
requesting to determine whether Paragraph 2 of Article 11 of
the Republic of Lithuania Law on Pharmaceutical Activities was
in compliance with Paragraph 1 of Article 46 and Paragraph 1 of
Article 48 of the Constitution of the Republic of Lithuania.
The Constitutional Court
has established:
I
The petitioner, the Higher Administrative Court, was
investigating an administrative case. The said court suspended
the investigation of the case by its order and addressed the
Constitutional Court with a petition requesting to determine
whether Paragraph 2 of Article 11 of the Law on Pharmaceutical
Activities (Official Gazette Valstybės žinios, 1991, No. 6-161;
1993, No. 29-666; hereinafter also referred to as the Law) was
in compliance with Paragraph 1 of Article 46 and Paragraph 1 of
Article 48 of the Constitution.
II
The request of the petitioner is based on the following
arguments.
Paragraph 2 of Article 11 of the Law provides that
pharmacies (save state pharmacies, state joint-stock and
charity organisations' pharmacies) may belong by right of
ownership only to the natural persons who have had higher
pharmaceutical education or the groups of natural persons in
which more than half of the authorised capital of the pharmacy
(part thereof) belongs to persons who have had higher or
specialised secondary pharmaceutical education. Thus, Paragraph
2 of Article 11 of the Law establishes a restriction of
acquisition of property on the grounds of the education of the
individual. The petitioner points out that although a pharmacy
belongs to the owner, his right of ownership is implemented by
the head of the enterprise in respect of whom qualification
requirements ought to be established. In the opinion of the
petitioner, Paragraph 2 of Article 11 of the Law conflicts with
the provision of Paragraph 1 of Article 46 of the Constitution
that Lithuania's economy shall be based on the right to private
ownership, freedom of individual economic activity, and
initiative, as well as with the provision of Paragraph 1 of
Article 48 of the Constitution that every person may freely
choose an occupation or business.
III
In the course of the preparation of the case for the
Constitutional Court hearing, written explanations were
received from the representative of the party concerned, the
Seimas, who is L. Schulte-Ebbert, a senior consultant to the
Legal Department of the Office of the Seimas. In her
explanations she maintains that under the Constitution, the
state has the right to regulate economic activity so that it
serves the general welfare of the people (Paragraph 3 of
Article 46); the state also has a duty to defend the interests
of the consumers (Paragraph 5 of Article 46). The provisions of
Paragraph 2 of Article 11 of the Law, establishing certain
restrictions of the right of ownership to possess pharmacies
are related to an exceptional character of pharmaceutical
activities. Pharmaceutical activities are of crucial importance
to the entire society. The activity of a pharmacy is a
particularly important part of pharmaceutical activities. This
activity is related to special goods, which are medicines and
medicinal substances, therefore special requirements may be
applied to such an activity.
The representative of the party concerned points out that
in modern society the freedom of economic activity must be
coordinated with the interests of the society. The right of
ownership and freedom of economic activity are of social nature
and restrictions may be imposed upon them. The restrictions
established in the Law are related only to the pharmaceutical
activities directly linked with people's health. In attempt to
ensure that only safe, high quality and effective medicines be
used, the professional knowledge of the owner of the pharmacy,
of its head and of the specialists working in the pharmacy is
equally important.
In the opinion of L. Schulte-Ebbert, Paragraph 2 of
Article 11 of the Law on Pharmaceutical Activities is in
compliance with Paragraph 1 of Article 46 and Paragraph 1 of
Article 48 of the Constitution.
IV
In the course of the preparation of the case for the
Constitutional Court hearing, written explanations were
received from K. Kuzmickas, Chairman of the Committee on Health
Affairs of the Seimas of the Republic of Lithuania, A.
Klišonis, J. Matulevičius, V. Nekrašas, J. Olekas and V.
Šustauskas, who are members of the Committee on Health Affairs
of the Seimas of the Republic of Lithuania, K. R. Dobrovolskis,
Minister of Health of the Republic of Lithuania, E. Gentvilas,
who was then Acting Minister of Economy of the Republic of
Lithuania, R. Stanikūnas, Chairman of the Competition Board of
the Republic of Lithuania, M. Anciuvienė, Deputy Director
General of the European Law Department under the Government of
the Republic of Lithuania, A. Mickis, Head of the Medicines'
Registration Centre of the State Service for the Control of
Medicines, S. Janonis, Director of the National Patients' Fund,
U. Trumpa, President of the Lithuanian Free Market Institute,
E. Tarasevičius, President of the Lithuanian Pharmaceutical
Association, L. Akramas, President of the Pharmacy and Pharmacy
Market, A. Blažys, Chairman of the Association of Manufacturers
of Medicines, E. Kvedarienė, Chairman of the Board of the
Provifarma Association of Pharmacies.
V
1. At the Constitutional Court hearing, L. Schulte-Ebbert,
the representative of the party concerned, the Seimas,
virtually reiterated the arguments set forth in her written
explanations.
2. At the Constitutional Court hearing, the following
specialists spoke: E. Bartkevičius, Vice-minister of Health of
the Republic of Lithuania, L. Darulienė, Chief of the Legal
Division of the Competition Board of the Republic of Lithuania,
A. Mickis, Head of the Medicines' Registration Centre of the
State Service for the Control of Medicines, E. Tarasevičius,
President of the Lithuanian Pharmaceutical Association, J.
Urbienė, Director of the Provifarma Association of Pharmacies.
The Constitutional Court
holds that:
I
1. Paragraph 2 of Article 11 of the Law on Pharmaceutical
Activities provides: "Pharmacies (save state pharmacies, state
joint-stock and charity organisations' pharmacies) may belong
by right of ownership only to the natural persons who have had
higher pharmaceutical education or the groups of natural
persons in which more than half of the authorised capital of
the pharmacy (part thereof) belongs to persons who have had
higher or specialised secondary pharmaceutical education."
The petitioner doubts whether Paragraph 2 of Article 11 of
the Law is in compliance with Paragraph 1 of Article 46 and
Paragraph 1 of Article 48 of the Constitution.
2. The petitioner requests to determine whether Paragraph
2 of Article 11 of the Law is in compliance with Paragraph 1 of
Article 48 of the Constitution. However, it is clear from the
motives presented in the petition that the petitioner doubts as
to the compliance of not entire Paragraph 1 of Article 48 of
the Constitution but only its provision that every person may
freely choose an occupation or business.
3. Subsequent to the petition of the petitioner, the
Constitutional Court will consider whether Paragraph 2 of
Article 11 of the Law is in compliance with Paragraph 1 of
Article 46 of the Constitution and the provision of Paragraph 1
of Article 48 thereof that every person may freely choose an
occupation or business.
II
On the compliance of Paragraph 2 of Article 11 of the Law
on Pharmaceutical Activities with Paragraph 1 of Article 46 of
the Constitution.
1. Paragraph 1 of Article 46 of the Constitution provides:
"Lithuania's economy shall be based on the right to private
ownership, freedom of individual economic activity, and
initiative."
This provision defines the constitutional values upon
which the national economy is based: private ownership, freedom
of individual economic activity, and initiative.
The notion of individual economic activity is a broad one.
It includes the freedom to freely choose business, freedom to
freely conclude contracts, freedom of fair competition, equal
rights of entities of economic activity etc. The freedom of
individual economic activity and initiative is the whole
complex of legal opportunities which creates preconditions for
an individual independently to adopt decisions necessary for
his economic activity (Constitutional Court ruling of 18 April
1996).
The freedom of individual economic activity creates
opportunities to realise various aspirations of persons. Under
the Constitution, the national economy shall be based on the
freedom of individual economic activity and initiative,
therefore one may not establish any such legal regulation
creating inappropriate conditions for the implementation of the
freedom of economic activity. Under Paragraph 2 of Article 46
of the Constitution, the state shall support economic efforts
and initiative which are useful to the community.
2. The freedom of economic activity and initiative are
based on the inborn right of an individual to personal freedom,
as well as on the inborn right to ownership (Constitutional
Court ruling of 20 April 1995).
Paragraph 1 of Article 23 of the Constitution provides
that property shall be inviolable. Paragraph 2 thereof
stipulates that the rights of ownership shall be protected by
law. These constitutional provisions imply that the
Constitution, while guaranteeing the protection of ownership,
establishes the constitutional right to acquisition of property
too, and guarantees protection of this right.
It is noteworthy that the constitutional right of persons
to ownership is an essential (necessary) condition for the
implementation of the freedom of individual economic activity.
When the right of persons to ownership is restricted, the
freedom of individual economic activity is restricted as well.
3. The right of persons to ownership, the freedom of
economic activity, as most of the other rights and freedoms
entrenched in the Constitution, are not absolute ones. While
exercising their rights and freedoms, persons must observe the
Constitution and laws, and must not impair the rights and
freedoms of other people (Article 28 of the Constitution).
Under Article 46 of the Constitution, the state must regulate
economic activity so that it serves the general welfare of the
people, it must defend the interests of the consumers. In these
provisions of the Constitution a principle is consolidated
establishing the purposes and limits of regulation of economic
activity.
Under the Constitution, it is permitted to restrict the
rights and freedoms of individuals if the following conditions
are observed: this is done by law; these restrictions are
necessary in the democratic society in order to protect the
rights and freedoms of other persons as well as the values
enshrined in the Constitution together with the
constitutionally important objectives; the restrictions do not
deny the nature and essence of the rights and freedoms; the
constitutional principle of proportionality is followed.
Under the Constitution, the right to ownership may be
restricted due to the nature of property and/or other reasons
when in case of non-restriction of this right it would be
impossible to protect the values entrenched in the Constitution
and damage would be inflicted on a public interest.
4. Under Paragraph 2 of Article 11 of the Law, pharmacies
(save state pharmacies, state joint-stock and charity
organisations' pharmacies) may belong by right of ownership
only to the natural persons who have had higher pharmaceutical
education; a pharmacy may belong by right of ownership to a
group of natural persons only when in such a group more than
half of the authorised capital of the pharmacy (part thereof)
belongs to persons who have had higher or specialised secondary
pharmaceutical education. It means that the disputed article of
the Law contains a restriction for natural persons or their
groups to possess a pharmacy by right of ownership.
5. Under Article 1 of the Law on Pharmaceutical
Activities, a pharmacy is an enterprise or a sub-division of an
in-patient health care body which has been issued a licence for
pharmaceutical activities or has been accredited for
pharmaceutical activities, in which medicines and medicinal
goods are kept, compounded, controlled, and sold to residents,
health care (and other) institutions and enterprises; the
following is attributed to pharmaceutical activities which are
a part of health activities: compounder, investigation and
manufacture of medicines and medicinal substances;
dispensation, custody (with the intention to sell), and sale of
medicines and medicinal substances; quality control of
medicines and medicinal substances; forensic chemical expertise
and biopharmaceutical analysis of medicines; pharmaceutical
expertise in the course of registering medicines; collecting,
analysis and dissemination of pharmaceutical information about
medicines. Thus, under the Law, a pharmacy is an enterprise
established for the purpose of accomplishment of pharmaceutical
economic activity.
The specific character of medicines and medicinal
substances as goods determines the fact that pharmaceutical
activities are a special area of economic activity. It is an
interest of every individual, of the entire society and the
state that laws and other legal acts would establish such legal
regulation whereby pharmaceutical activities would be conducted
only by the individuals who have had special education and are
of corresponding qualification. The duty of the legislation to
establish such legal regulation arises from Paragraph 1 of
Article 53 of the Constitution which provides that the state
shall take care of people's health.
6. A special role of pharmacists in the area of
pharmaceutical activities is underlined in various
international documents. The Committee of Ministers of the
Council of Europe in the Resolution concerning the pharmacist's
role in the framework of health security adopted on 21 March
2001 recommended that the governments of the member states, for
the purpose of adapting their regulations, take into
consideration the changing conditions of the market, the
development of electronic marketing means, to reflect the
pharmacist's developing role in relation to health security as
well as in the areas of distribution of medicines and
monitoring of their records.
The World Health Organisation, various professional
organisations of pharmacists emphasise in their documents the
influence of distribution of medicines, as specific goods, upon
public health and an important role of the pharmacist as a
person possessing special knowledge and corresponding
qualification in the distribution of medicines and contribution
to the improvement of public health and health activities.
The Declaration adopted in the Third Annual Meeting of the
European Forum of Pharmaceutical Associations and the World
Health Organisation Regional Office for Europe, which took
place on 30-31 May 1994, points out that in attempt to
effectively accomplish the professional duties of pharmacies as
a primary link of health care in the interest of public health
and in order to ensure the protection of people's health and
proper use of medicines, certain principles must be necessary,
which must be reflected in laws and administrative measures in
order to achieve these objectives. One of such principles is as
follows: the pharmacist who is governed by strict rules of
professional conduct and ethics personally has final control
over supply of medicines to the public; the pharmacist must
have complete managerial control of the pharmacy, free of
economic influence of non-pharmacist owners.
7. It needs to be noted that European Union law does not
regulate particular issues of ownership of pharmacies and
permits the member states to decide by themselves the questions
concerning regulation of relations of ownership of pharmacies.
As regards regulation of pharmaceutical activities, it is
established in many states of the European Union that only
individuals who have had pharmaceutical education may found
pharmacies and that they may belong by right of ownership to
such individuals only. In some states of the European Union
pharmacies may belong by right of ownership not only to
individuals who have had pharmaceutical education but to other
natural persons as well.
8. In the context of the case at issue, one must emphasise
that the provision "the State shall take care of people's
health" of Paragraph 1 of Article 53 of the Constitution
implies that laws and other legal acts must establish such
legal regulation of pharmaceutical activities which would make
pre-conditions to create a wide network of pharmacies, also
that pharmacies would have sufficient stock of high quality,
effective and safe medicines, that the system of medicines'
supply would operate smoothly, that the prices of medicines
would be regulated, that the acquisition of medicines would not
be inconvenienced, that the information about medicines and
their use would be easily accessible and properly published
etc. Under the Constitution, pharmaceutical activities must be
regulated so that the freedom of individual economic activity
and initiative as well as fair competition would not be
restricted. The state must exercise control so that
pharmaceutical activities would be conducted for the good of
people's health and public health activities.
9. While considering whether Paragraph 2 of Article 11 of
the Law is in compliance with the Constitution, the fact is of
essential importance that the right to ownership is a
constitutional right of persons and that the legislature, when
restricting this right, is bound by the norms and principles of
the Constitution: this right may not be restricted more than it
is necessary in the democratic society, when one has to protect
the values entrenched in the Constitution as well as the public
interest.
10. It follows from the provision "the State shall take
care of people's health" of Paragraph 1 of Article 53 of the
Constitution that the protection of people's health is a
constitutionally important objective and a public interest.
When one decides whether Paragraph 2 of Article 11 of the Law
establishes the restrictions of an individual's right to
ownership which are indispensable in attempt to ensure people's
health care, the fact is of essential importance that, under
the Constitution, the presence of a public interest
(constitutionally important objective) may serve grounds for
restriction of persons' right to ownership only in such a case
when due to the nature of property and/or other reasons when in
case of non-restriction of this right it would be impossible to
protect the values entrenched in the Constitution and damage
would be inflicted on a public interest.
11. It is noteworthy that after the Law had established
that pharmacies (save state pharmacies, state joint-stock and
charity organisations' pharmacies) may belong by right of
ownership only to the natural persons who have had higher
pharmaceutical education or the groups of natural persons in
which more than half of the authorised capital of the pharmacy
(part thereof) belongs to persons who have had higher or
specialised secondary pharmaceutical education, the right of
other natural persons to possess pharmacies by right of
ownership is restricted without taking into consideration the
fact that a mere being the owner of a pharmacy does not mean
that the owner has the right to conduct the activities which,
under the Law on Pharmaceutical Activities, may be conducted
only by a person who has had an established pharmaceutical
education and possessing necessary qualification.
The owner of an enterprise licensed for pharmaceutical
activities (i.e. a pharmacy) may not be identified, of its own
accord, with pharmacists or other persons conducting
pharmaceutical activities. As it has been mentioned, only the
persons who have had pharmaceutical education and who possess
necessary qualification may conduct pharmaceutical activities.
The laws may also establish additional requirements for the
persons linked with compounder, custody, control and sale of
medicines, which would ensure the security of people's health.
12. One must emphasise a social function of ownership.
Ownership obligates (Constitutional Court ruling of 21 December
2000). The owner, while enjoying the right to possess, use and
dispose of his property, may not violate laws as well as the
rights of other persons. The pharmacy is an enterprise licensed
for pharmaceutical activities, i.e. activities which are part
of public health activities and which are related to goods of
specific character-medicines and medicinal substances,
therefore the laws may and must establish such restrictions of
the subjective rights of pharmacies' owners so that in the
pharmacies belonging by right of ownership to the latter only
the individuals who possess pharmaceutical education and
necessary qualification might be able to control the
professional activities of the pharmacists working in such
pharmacies, might be able to head such pharmacies and might be
able to conduct managerial control in the same. Under the
Constitution, the laws must establish such regulation of
pharmaceutical activities so that the economic interests of
pharmacies' owners would not cast into the shade the activities
of pharmacies conducted in the interest of people's health and
of public health activities.
13. It has been mentioned that under the Constitution, the
right to ownership may be restricted due to the nature of
property and/or other reasons when in case of non-restriction
of this right it would be impossible to protect the values
entrenched in the Constitution and damage would be inflicted on
a public interest. Under the Constitution, it is prohibited to
restrict the right of ownership of a person on the basis of the
person's education. The requirements for pharmaceutical
education and necessary qualification must be imposed on the
persons conducting pharmaceutical activities in pharmacies. It
is not permitted to impose requirements for education on the
persons who attempt to possess pharmacies by right of
ownership.
Paragraph 2 of Article 11 of the Law to the extent that it
provides that pharmacies may belong by right of ownership only
to the natural persons who have had higher pharmaceutical
education or the groups of natural persons in which more than
half of the authorised capital of the pharmacy (part thereof)
belongs to persons who have had higher or specialised secondary
pharmaceutical education restricts the right of other natural
persons to possess pharmacies by right of ownership.
On the grounds of the arguments set forth, one is to draw
a conclusion that Paragraph 2 of Article 11 of the Law on
Pharmaceutical Activities to the extent that it restricts the
right of natural persons without higher pharmaceutical
education and that of groups of natural persons to possess
pharmacies by right of ownership conflicts with Paragraphs 1
and 2 of Article 23 of the Constitution.
14. It has been mentioned that the freedom of individual
economic activity and initiative entrenched in Paragraph 1 of
Article 46 of the Constitution is based upon the right of
persons to ownership. It has already been held in this Ruling
that Paragraph 2 of Article 11 of the Law to the
above-mentioned extent restricts the constitutional right of
persons to ownership and is in conflict with Paragraphs 1 and 2
of Article 23 of the Constitution. It needs to be noted that
when the right of persons to ownership is restricted, the
freedom of individual economic activity is restricted, too. One
ought to consider such restrictions to be disproportionate.
On the grounds of the arguments set forth, one is to draw
a conclusion that Paragraph 2 of Article 11 of the Law to the
extent that it restricts the right of natural persons without
higher pharmaceutical education and that of groups of natural
persons to possess pharmacies by right of ownership conflicts
with Paragraph 1 of Article 46 of the Constitution.
III
On the compliance of Paragraph 2 of Article 11 of the Law
on Pharmaceutical Activities with the provision of Paragraph 1
of Article 48 of the Constitution that every person may freely
choose business.
1. The provision of Paragraph 1 of Article 48 of the
Constitution that every person may freely choose business means
that every individual has a constitutional right to decide by
himself as to what business to choose. The right to freely
choose business is one of necessary conditions in order to
satisfy the vital needs of an individual and to occupy a proper
place in the society. The constitutional provision that every
person may freely choose business is based on a generally
recognised concept of the freedom of a human being. On the
other hand, the said constitutional right of every person to
freely choose business implies that the state has a duty to
create corresponding legal pre-conditions for the
implementation of this right. The provision of Paragraph 1 of
Article 48 of the Constitution that every person may freely
choose business is related to the provision "Lithuania's
economy shall be based on the right to private ownership,
freedom of individual economic activity, and initiative" of
Paragraph 1 of Article 46 of the Constitution.
2. It has already been held in this Ruling of the
Constitutional Court that Paragraph 2 of Article 11 of the Law
to the extent that it restricts the right of natural persons
without higher pharmaceutical education and that of groups of
natural persons to possess pharmacies by right of ownership
conflicts with Paragraphs 1 and 2 of Article 23 and Paragraph 1
of Article 46 of the Constitution. Having held this, one is
also to hold that Paragraph 2 of Article 11 of the Law to the
above-mentioned extent restricts the constitutional right of
persons to freely choose business.
On the grounds of the arguments set forth, one is to draw
a conclusion that Paragraph 2 of Article 11 of the Law to the
extent that it restricts the right of natural persons without
higher pharmaceutical education and that of groups of natural
persons to possess pharmacies by right of ownership conflicts
with the provision of Paragraph 1 of Article 48 of the
Constitution that every person may freely choose business.
Conforming to Article 102 of the Constitution of the
Republic of Lithuania and Articles 53, 54, 55 and 56 of the
Republic of Lithuania Law on the Constitutional Court, the
Constitutional Court of the Republic of Lithuania has passed
the following
ruling:
To recognise that Paragraph 2 of Article 11 of the
Republic of Lithuania Law on Pharmaceutical Activities to the
extent that it restricts the right of natural persons without
higher pharmaceutical education and that of groups of natural
persons to possess pharmacies by right of ownership conflicts
with Paragraphs 1 and 2 of Article 23, Paragraph 1 of Article
46 and Paragraph 1 of Article 48 of the Constitution of the
Republic of Lithuania.
This Constitutional Court ruling is final and not subject
to appeal.
The ruling is promulgated on behalf of the Republic of
Lithuania.