Decision U.no.121/2014

U.no.121/2014

On the basis of Articles 110 and 112 of the Constitution of the Republic of Macedonia and Article 70 of the Rules of the Constitutional Court of the Republic of Macedonia (»Official Gazette of the Republic of Macedonia«, no.70/1992), at its session held on 24 June 2015, the Constitutional Court of the Republic of Macedonia took the following

DECISION

1. Article 81 paragraph 4 of the Law on Medicines and Medical Devices (“Official Gazette of the Republic of Macedonia”, nos. 106/2007, 88/2010, 36/2011, 53/2011, 136/2011, 11/2012, 147/2013, 164/2013, 27/2014 and 43/2014) SHALL BE REPEALED.

2. This decision shall generate legal effects from the date of its publication in the “Official Gazette of the Republic of Macedonia”.

3. Upon the initiative submitted by Slobodan Novacki from Skopje, with its Resolution U.br.121/2014 dated 8 April 2015 the Constitutional Court of the Republic of Macedonia instigated proceedings for appraising the constitutionality of the Article of the Law noted in item 1 of the present Decision.

The proceeding was initiated as there was a reasonable question raised before the Court with regard to the accordance of the impugned Article with the provisions of the Constitution.

4. At its session the Court found that under the contested Article 81 paragraph 4 of the Law on Medicines and Medical Devices, a founder of a pharmacy may be only a person with a university degree in pharmacy or a trade company in the form of a sole proprietorship, LLC or LLC of one person, whose founder(s) is(are) exclusively people with a university degree in pharmacy.

5. The rule of law and freedom of market and entrepreneurship are the fundamental values of the constitutional order of the Republic of Macedonia, in the sense of Article 8 paragraph 1 lines 3 and 7 of the Constitution of the Republic of Macedonia.

Article 9 of the Constitution of the Republic of Macedonia stipulates that the citizens of the Republic of Macedonia are equal in their freedoms and rights irrespective of their sex, race, colour of skin, national and social origin, political and religious affiliation, property and social status. All citizens are equal before the Constitution and law.

Pursuant to Article 51 of the Constitution, in the Republic of Macedonia laws shall be in accordance with the Constitution and all other regulations in accordance with the Constitution and law. Everyone is obliged to observe the Constitution and the laws.

Article 54 paragraph 1 of the Constitution stipulates that the freedoms and rights of the individual and citizen may be restricted only in cases defined by the Constitution.

Article 55 of the Constitution guarantees the freedom of the market and entrepreneurship. The Republic ensures an equal legal position to all parties on the market and takes measures against monopolistic positions and monopolistic conduct on the market. The freedom of the market and entrepreneurship may be restricted by law only for reasons of the defence of the Republic, protection of the natural and living environment or public health.

Under Article 58 paragraph 1 of the Constitution, ownership and labour form the basis for management and participation in decision-making.

The Law on Medicines and Medical Devices (“Official Gazette of the Republic of Macedonia” nos.106/2007, 88/2010, 36/2011, 53/2011, 136/2011, 11/2012, 147/2013, 164/2013, 27/2014 and 43/2014) regulates drugs and medical devices for use in human medicine, conditions and methods for ensuring their quality, safety and efficacy, methods and procedures for their manufacturing, testing, putting into operations, operations, pricing, quality control, advertising of inspection supervision (Article 1, paragraph 1).

Chapter III. 4. Turnover of medicines, contains provisions (Articles 72-82) of the Law relating to the turnover of medicines at wholesale and retail.

Article 81 paragraph 1 of the Law stipulates that the retailing of medicines is carried out in the pharmacy.

The contested Article 81 paragraph 4 of the Law on Medicines and Medical Devices stipulates that the founder of a pharmacy may be only a person with a university degree in pharmacy or a trade company in the form of a sole proprietorship, LLC or LLC of one person whose founder, or founders are exclusively people with a university degree in pharmacy.

The impugned paragraph 4 of Article 81 of the Law on Medicines and Medical Devices was amended in this Law with Article 5 of the Law Amending the Law on Medicines and Medical Devices (“Official Gazette of the Republic of Macedonia” no.27/2014).

The contested Article 13 paragraph 1 of the Law Amending the Law on Medicines and Medical Devices (“Official Gazette of the Republic of Macedonia” no.27/2014), which is a separate article in this Law stipulates that the provision of Article 5 of this Law adding two new paragraphs 4 and 5, will be implemented as of 1 September 2014.

Under paragraph 2 of this Article, the authorisation for whosale of medicines, that is, the authorisation for retail of medicines shall cease to be valid for a pharmacy that will not bring the structure of its founders in accordance with the provision of Article 81, paragraphs 4 and 5 of this Law.

From the analysis of the disputed Article 81 paragraph 4 of the Law it arises that the legislator regulated who may be the founder of a pharmacy, and therewith who cannot be the founder of a pharmacy.
Under the impugned statutory provision, only persons with a university degree in pharmacy may be founders of a pharmacy, and also all types of trade companies whose founders have this type and level of education may be founders of a pharmacy. Hence, the founder of a pharmacy may not be any other person, nor any type of trade companies referred to in the contested statutory provision, whose founders do not have the prescribed type and level of university education.

Accordingly, any person cannot be a founder of a legal entity for retail with medicines – a pharmacy, although any person possessing capital has the right to dispose and manage his/her capital in any field (Article 3 paragraph 1, item 37 of the Trade Company Law).

According to the Court, the type and level of education of the founder is a restriction of the entities to freely enter the market and entrepreneurship, that is, giving the opportunity for monopoly of the founding rights for a pharmacy activity only to a certain circle of people in the market, and not to all who wish, can and have the capital to join the market as the founders of a legal entity – pharmacy.

Considering that the founder is a person investing capital in the foundation and registration of a legal entity for the purposes  particpating in the market by carrying out activities, the determination who can be the founder of a pharmacy is narrowing the circle of entities that will be able to establish a pharmacy, and thus directly impacting the representation of pharmacies on the market, since not all persons with a university degree in pharmacy have the necessary capital, will and management opportunities to appear on the market as founders and managers of a legal entity – pharmacy.

The rights and obligations of the founder of a legal person are different and cannot be identified with the rights and obligations of the employees in a legal entity, for whom the law regulates the conditions that they must fulfill as employees of a legal entity, corresponding with the activity performed by the legal entity.

Before the introduction of the impugned provision, any person with any education had been able to be the foudner of a pharmacy, with an obligation to employ at the pharmacy persons with suitable qualifications, as regulated in Article 82 paragraph 1 of the Law, which sets out the conditions which the legal entity should meet to perform retail with medicines, that is, a pharmacy, among which to employ adequate number of persons with higher education in the field of pharmacy (constantly present in the pharmacy) and with secondary education in the field of pharmacy.

The essence of the founder is to invest capital and resources for the registration of a legal entity-pharmacy, meaning his properties cannot be equated with those who do not invest resources but as employees perform pharmaceutical profession, for which the Law on Health Care stipulates the conditions unedr which they can carry out their profession, including the specific type and level of education.

The founder of the legal entity-pharmacy is only a person that has invested capital for the establishment of a legal entity-pharmacy, with rights and obligations arising from the status of a founder, that is, a person who needs to ensure that all requirements regulated by the Law for smooth, qualitative, professional performance of the activity by the legal person, governed by Article 82 of the Law (providing suitable premises, equipment and staff for retail in accordance with the quantity and type of medicines that are put into circulation, to employ adequate number of persons with university degree in pharmacy (constantly present in the pharmacy) and with secondary education in the field of pharmacy and others). Accordingly, the founders of pharmacies investing resources to establish this health facility are not statutory obliged to necessarily be employed in pharmacies.

In this sense, it is undisputed that there is no prohibition for a founder of a pharmacy to be a person employed in the pharmacy, but in this case the founder who wants to perform the pharmaceutical profession should fulfill all the conditions required for the performance of the pharmaceutical profession (type and degree of education, taking professional exams and licences), which is regulated by Article 115 of the Law on Health Care.

Thereby, the Court took into consideration the opinion of the proposer of the Law that such regulation achieves positive effects in terms of raising the level of professional management with pharmacies by the founders if they are graduated pharmacists, that is, it is justified with the objective to intercept potential hazards posed by the use of medicines. However, for this purpose the legislator in Article 82 of the Law on Medicines and Medical Devices has regulated the conditions under which a legal person may perform retail with medicines, that is, the legal person to have an adequate number of employed persons with a university diploma in the field of pharmacy (constantly present in the pharmacy) and with secondary education in the field of pharmacy. The right of employment of the employees in the pharmacies is different from the right of the founder of pharmacies. There is no obligation in the Law for his compulsory employment in the pharmacy which would result in his direct contact with the customers of pharmaceutical services.

Hence, in a situation of regulated conditions for the performing of this activity, in terms of premises, equipment, staff, etc., the lack of appropriate type and level of education by the founders who are people who invested resources for carrying out that activity, according to the Court, cannot be the basis to exclude them from the market.

According to the Court, the limitation that other subjects may not establish a pharmacy because of the lack of the required type and level of education violates the constitutional guarantee of freedom of the market and entrepreneurship and does not ensure equal legal position to all subjects in the market, in terms of free movement of capital and the free enjoyment of possessions.

The introduced requirement for the type and level of education of the founder of a pharmacy limits the freedom of entrepreneurship of the founder, who in the present case is an entrepreneur, beyond the constitutional opportunities for restriction of the freedom on the market and entrepreneurship. Consequently, the Court concluded that the impugned Article 81 paragraph 4 of the Law is inconsistent with Article 8 lines 1 and 3, Article 9 and Article 55 of the Constitution.
6. Given the aforementioned, the Court found that the challenged Article 81 paragraph 4 of the Law on Medicines and Medical Devices is not in accordance with the provisions of the Constitution.

7. On the basis of what has been noted, the Court decided as in item 1 of the present Decision.

8. The Court took the present decision in the following composition: Mrs Elena Gosheva, President of the Court, and the judges: Dr Natasha Gaber-Damjanovska, Mr Ismail Dalishta, Mr Nikola Ivanovski, Mr Jovan Josifovski, Mrs Vangelina Markudova, Mr Sali Murati, Dr Gzime Starova and Mr Vladimir Stojanoski.

U.br.121/2014
24 June 2015
S k o p j e

PRESIDENT
of the Constitutional Court of the Republic of Macedonia
Elena Gosheva

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