Decision

DECISION № 5 OF 10 JULY 2008 ON CONSTITUTIONAL CASE № 2/2008

The case was filed on 18 April 2008 following a challenge of the Ombudsman of the Republic of Bulgaria. The proceedings was based on Art. 149, para 1, subpara 2 in relation to Art. 150, para 3 of the Constitution. The Ombudsman challenged the constitutionality of Art. 222, para 1 of the Act on Pharmaceuticals in Human Medicine (promulgated, DV, № 31 / 13 April 2007). In the opinion of the Ombudsman, the text challenged violates civil rights as it conflicts with Art . 6, para 2; Art . 17, paras 1 and 3; Art . 19, paras 1, 2 and 3 and Art . 52, para 5 of the Constitution .

The Constitutional Court considered the arguments as laid down in the challenge of the Ombudsman of the Republic of Bulgaria and the reasons given in the presented positions and to rule on merit, took into account the following points:

Free economic initiative (Art. 19, para 1 of the Constitution) as a Constitution-enshrined principle on which market economy is built underlies the country's economic life. The initiative derives from economic freedom, which is prescribed for all economic actors ( individuals and corporate entities) in conditions of a decentralized national economy.

No doubt, while Art 222, para 1 of the Act on Pharmaceuticals in Human Medicine allows retail trade in pharmaceuticals only to a vendor with a Master of Pharmacy degree who opens a pharmacy when he registers as a one-man owner or as a limited liability company in the sense of the Commercial Act, it bars the entry of new market players as pharmaceuticals retailers. When the legal and organizational forms by which pharmaceuticals retail trade in human medicine are limited, this limits the right to free economic initiative. The limited circle of economic actors who can trade in pharmaceuticals conflicts with Art. 19, para 2 of the Constitution which prescribes that the legislating authority shall create and guarantee equal conditions for business to all individuals and corporate entities. Like any other business, the retail trade in pharmaceuticals is made dependent on the initiative of individual economic actors. Any individual or corporate entity is free to choose a business. However, the law must provide non-discriminatory conditions for business to them. The inference is that any individual or corporate entity shall be able to make business whenever they want in a law-established organizational form.

The limited circle of economic actors who are free to be engaged in retail trade in pharmaceuticals by opening a pharmacy by virtue of Art. 222, para 1 of the Act on Pharmaceuticals in Human Medicine is discordant with Art. 19, para 2 of the Constitution, as ,, equal conditions for economic activities” is to be understood as equality for all economic actors and it is unjustified, from the perspective of public health protection and of consumer protection to limit them. In parallel, the legislation must prescribe an appropriate legal procedure that will successfully prevent instances of abuse by a monopolist and unfair competition and will ensure consumer protection.

On these grounds, the Constitutional Court drew the conclusion that Art. 222, para 1 of the Act on Pharmaceuticals in Human Medicine is dissonant with Art. 19, paras 1 and 2 the Constitution.

The Ombudsman's understanding as expressed in the challenge is that the limitations of Art. 222, para 1 of the Act on Pharmaceuticals in Human Medicine inasmuch as they allow for retail trade in pharmaceuticals only if a vendor with a Master of Pharmacy degree opens a pharmacy registered as a one-man owner or as a limited liability company, drive investment away from the pharmaceuticals market and therefore, the text challenged conflicts with Art. 19, para 3 of the Constitution. This understanding is not shared by the Constitutional Court as Art. 19, para 3 of the Constitution provides for guaranteeing investments understood in the broad sense of the word as spending money to buy movable and immovable property, means of production, securities and suchlike. They all are part of the Constitution-provided guarantees of inviolability of private property (Art. 17, para 3 of the Constitution). However, Art. 222, para 1 of the Act on Pharmaceuticals in Human Medicine treats an activity which is a retail trade in pharmaceuticals and does not treat title. Therefore, the Constitutional Court did not see any conflict between the text challenged and Art. 19, para 3 of the Constitution.

The Ombudsman stressed that pursuant to Art. 52, para 5 of the Constitution ,,the State shall enjoy functions of special stronger control on the trade in pharmaceuticals”. However, he sees this control as acceptable only if the State allows ,,any economic actor to hold title on a pharmacy in whatever legal and organizational form”. In that case, the Ombudsman wrongly correlates the right to be engaged in retail trade in pharmaceuticals by opening a pharmacy to the title on the pharmacy.

While the Constitutional Court recognized that healthcare in a decentralized market economy is not a State-run activity, it also recognized that this is not tantamount to exempting the State from the obligation to exercise ,,control on all health institutions and on the production of and trade in pharmaceuticals, biological substances and medical equipment” (Art. 52, para 5 of the Constitution), including control on the retail trade in pharmaceuticals for the sake of public health protection. Free economic initiative does not drive away the principles of State regulation and control on economic activities as these activities are not absolute and can be put into a law in order to prevent instances of abuse by a monopolist and unfair competition and to ensure consumer protection (see Decision № 6 of 25 February 1997 on Constitutional Case № 32/1996).

In the definition of Art. 219, para 1 of the Act on Pharmaceuticals in Human Medicine, a pharmacy is a healthcare institution with a catalog of activities as follows: ,,storage, preparation, packing, control, counseling, vending medicines and medicine-related products that are licensed for delivery to the Republic of Bulgaria with and without a doctor's prescription, like food additives, cosmetics and sanitary napkins, bandages and suchlike and toiletries on the basis of a list which is approved by the Minister of Health.” Pursuant to Art. 52, para 5 of the Constitution the State has the recognized right to control the pharmacies, with consideration for the fact that in the Bulgarian language the word ,,control” has multiple meanings: examination, check, observation, requirement, inspection and assessment of an activity.

Public health protection understood as a social function is ensured by the guarantee of Art. 222, para 1 of the Act on Pharmaceuticals in Human Medicine, viz. that the business, the retail trade in pharmaceuticals will be in the hands of vendors with a Master of Pharmacy degree. Further, the Act on Pharmaceuticals in Human Medicine assigns to the Executive Medicines Agency to exercise overall control on the operations of pharmacies (Art. 268, para 1, subpara 2 of the Act on Pharmaceuticals in Human Medicine) and to the regional public health protection and control agencies to exercise control on the operations of pharmacies (Art. 268, para 2 of the Act on Pharmaceuticals in Human Medicine).

The analysis of the content of Art. 222, para 2 of the Act on Pharmaceuticals in Human Medicine, shows, however, that when the State limits the legal organizational forms of retail trade in pharmaceuticals, as a matter of fact it goes beyond the limit of the powers that Art. 52 para 5 of the Constitution grants it. The control that the State has the prerogative to exercise on the activities of pharmacies according to Art. 52, para 5 of the Constitution cannot be the justification for the introduction of a ban, as Art. 222, para 1 of the Act on Pharmaceuticals in Human Medicine does, for all companies but a limited liability company and a one-man owner to retail pharmaceuticals upon the condition they open a pharmacy. This is dissonant with Art. 52, para 5 of the Constitution. On the basis of the above statement the Constitutional Court ruled that Art . 222, para 1 of the Act on Pharmaceuticals in Human Medicine disagrees with Art. 52, para 5 of the Constitution.

In the view of the Ombudsman the limitation of the circle of persons and corporate entities that are legitimate to enjoy the title on a pharmacy in keeping with the requirement of a university degree conflicts with Art. 6, para 2 of the Constitution reading that t here shall be no privileges or restriction of rights of citizens ,, on the grounds of ………….. education …”.

The Constitutional Court believes that Art. 222, para 1 of the Act on Pharmaceuticals in Human Medicine was misinterpreted. The text challenged provides for opening a pharmacy and not possession of a pharmacy. Etymologically, the verb ,,to open” that the lawmaker uses means ,,to set up”, ,,to found”, ,,to establish” (see Dictionary of the Bulgarian Language, third ed., Sofia, 1973, p. 609). The text challenged deals with an activity, which is a retail trade in pharmaceuticals in human medicine and does not deal with the title on the pharmacy.

The equality of citizens before the law is a fundamental Constitution principle. Accordingly, Art. 6, para 2 of the Constitution thoroughly lists the social criteria that will prevent inequality in the legal system.

In the case in question, with Art. 222, para 1 of the Act on Pharmaceuticals in Human Medicine the legislating authority introduced the requirement for a Master of Pharmacy degree for a person to be eligible to join the retail trade in pharmaceuticals on the understanding that this specific activity requires special education and professional experience. The text challenged makes the university degree binding only on the retailers of pharmaceuticals who open a pharmacy but excludes the persons and corporate entities that ,,are legitimate to have a title on a pharmacy,” as the Ombudsman claims.

In these circumstances, the requirement for a university degree to carry out a certain activity is not at variance with the Constitution principle of equality before the law. The legislating authority approved it so as to make sure that a certain Constitution-enshrined value or a principle is respected, in this case the protection of public health (Art. 52, para 3 of the Constitution). The Constitutional Court Decision № 18 of 14 December 1997 on Constitutional Case № 12/1997 reads that ,,it is absurd to assume that Art . 6 of the Constitution should forbid the State to pose a requirement for a university degree in medicine or in law in order to practice the profession of a medical doctor or a justice.” The university degree required for the retailers in pharmaceuticals under Art. 222, para 1 of the Act on Pharmaceuticals in Human Medicine does not curtail the rights of persons who do not have the required special education and professional experience (see Decision № 17 of 18 June 1998 on Constitutional Case № 15/1998).

With these considerations in mind the Constitutional Court concluded that Art. 222, para 1 of the Act on Pharmaceuticals in Human Medicine was not at variance with Art. 6, para 2 of the Constitution.

The Ombudsman ' s explanation of his understanding why the challenged text , Art . 222, para 1 of the Act on Pharmaceuticals in Human Medicine , infringes on the Constitution - enshrined requirement to guarantee and defend the right to property , is unsustainable .

As the Constitutional Court agreed that Art . 222, para 1 of the Act on Pharmaceuticals in Human Medicine deals with the retail trade in pharmaceuticals and not with title , the allegation of noncompliance with Art . 17, para 1 of the Constitution which guarantees the right to property and to inheritance is untenable.

When Art. 17, para 1 of the Constitution proclaims that ,, The right to property and inheritance shall be guaranteed and protected by law ” it upholds the interest of the owner, an individual or corporate entity. As per Art. 222, para 1 of the Act on Pharmaceuticals in Human Medicine on whose noncompliance with the Constitution the Constitutional Court is to rule upon the request from the Ombudsman, a pharmacy is not a standalone corporate entity different from a one-man owner or a limited liability company. In the case dealt with a pharmacy is a holder of a right. A pharmacy is a dynamic ,,set of rights, obligations and actual relations” arising from the retail trade in pharmaceuticals in human medicine (see Decision № 3 of 27 April 2000 on Constitutional Case № 3/2000). The right to carry out a certain economic activity, no matter how specific it may be, is different from the title. The Act on Pharmaceuticals in Human Medicine in general and its Art. 222, para 1 in particular are neutral to the title.

Drawing on the stated considerations the Constitutional Court ruled that Art. 222, para 1 of the Act on Pharmaceuticals in Human Medicine does not contravene Art. 17, para 3 of the Constitution.

Having considered the standpoints laid down in the Ombudsman's challenge the Constitutional Court ruled that Art. 222, para 1 of the Act on Pharmaceuticals in Human Medicine contravenes Art. 19, paras 1 and 2 and Art. 52, para 5 of the Constitution of the Republic of Bulgaria.

Председател: Румен Янков