Dutch Council of State cross-border decision: Minister rightly imposed fines on Curacao-based online platform for medicinal products

Background

The judgments of focus in this blog post concern Dokteronline. Dokteronline's website allows private individuals (the end users) to purchase medicinal products and obtain a doctor's consultation. Dokteronline has received negative attention before; in 2010, the Disciplinary Board of the Royal Dutch Society for the Advancement of Pharmacy ("KNMP") expelled a former pharmacist from the platform because the platform's modus operandi (making prescription medicinal products available without a doctor's visit) was allegedly contrary to the professional group's guidelines. The television programme Rambam also focused on Dokteronline in 2016, leading to parliamentary questions to the former Minister of Health, Welfare and Sport ("Minister of VWS").[1]

Process

In 2017 and 2018, the Minister for Medical Care imposed two fines on Dokteronline for the following violations of the Dutch Medicinal Products Act:

• ­Offering medicinal products for sale without having the required EU logo for online providers (Article 67a Medicinal Products Act in conjunction with 6.12 Medicinal Products Act Regulation);
• ­Offering medicinal products that may only be dispensed on prescription or without prescription in a pharmacy ("UR medicinal products" and "UA medicinal products") without a registered pharmacist (Section 61, paragraph 1 of the Medicinal Products Act);
• Prohibited advertising of medicinal products without a marketing authorisation (84 sections 1 and 2 of the Medicinal Products Act); and
• Advertising of prescription medicinal products (Article 85 introduction and under a of the Medicinal Products Act).

The fines were upheld by the District Court on appeal (ECLI:NL:RBDHA:2020:85 and ECLI:NL:RBDHA:2020:87), after which Dokteronline lodged an appeal.

The Division ruled on the two cases on 30 June 2021. The first case (ECLI:NL:RVS:2021:1421) concerns the fine (EUR 12,000) for violation of article 67a of the Medicinal Products Act: the prohibition on offering medicinal products for sale at a distance or making them available without an EU logo. The second case (ECLI:NL:RVS:2021:1422) concerns the fine (EUR 102,000) imposed for offering medicinal products in violation of article 61, paragraph 1 of the Medicinal Products Act and for advertising prescription medicinal products in violation of articles 84, paragraph 1 and 2 and 85 of the Medicinal Products Act.

Drug seller or intermediary platform?

A question addressed in both judgments is whether Dokteronline itself offers medicinal products for sale or whether it is merely, as it claims, an intermediary platform. This question is relevant for determining violations of Sections 61 and 67a of the Medicinal products Act. According to these provisions, it is prohibited to offer for sale, sell or supply both UR medicinal products and UA medicinal products online without a registered pharmacist and an EU logo. Online brokerage, however, is not prohibited by the Medicinal Products Act, and the broker in UR medicinal products and UA medicinal products does not require a registered pharmacist.

Dokteronline compares itself with well-known platforms Booking.com and Thuisbezorgd.nl (a Dutch platform in meal delivery). Dokteronline itself does not offer medicinal products for sale, it states, but only acts as an intermediary between the patient and the pharmacist. Dokteronline refers to the text on its website and in its general terms and conditions to show that it is in fact the pharmacy that sells and delivers the medicinal products. The Division did not agree with with this argument, ruling that Dokteronline does indeed offer medicinal products for sale directly to end users. The Division deemed the following circumstances, from the penalty report of the Inspectorate for Health Care and Youth ("IGJ"), important:

• ­The website contains statements about prescription medicinal products and offers the possibility of ordering these medicinal products;
• Payment can be made directly via the website and is made to the account of Dokteronline; and
• ­The consumer must fill in a medical questionnaire, but the order is then in most cases directly confirmed through an approval of the questionnaire by a doctor. The consumer does not have to take any action himself.

Although Dokteronline presents itself as an intermediary in these statements, neither in the first instance nor on appeal was this claim related to the role of a broker under the Medicinal Products Act. This is understandable in itself, because this was not the fundamental question in this case. However, it is unfortunate that the Division did not take the opportunity to further clarify the distinction made in the Medicinal Products Act between the person who (in his own name) physically performs actions with medicinal products (such as manufacturers and wholesalers) and the person who performs actions with medicinal products on behalf of another person, without physical contact (i.e. the broker). This distinction is not further discussed in the rulings, leaving open the question of whether Dokteronline is also a broker in the sense of the Medicinal Products Act. Based on Section 39 of the Medicinal Products Act, a broker in medicinal products is required to register with Farmatec, part of the Central Information Point for Health Care Professions ("CIBG"). Brokers may only mediate in medicinal products for which a European, national or decentralised marketing authorisation has been granted (Article 39a of the Medicinal Products Act in conjunction with 85b of Directive 2001/83/EC). Even as an intermediary, Dokteronline would therefore be acting contrary to the Medicinal Products Act, as its platform also offered medicinal products for which no marketing authorisation had been granted, according to the court rulings. Finally, a broker can also act contrary to the advertising rules set out in Sections 84 and 85 of the Medicinal Products Act.

Enforcement on Curacao

Another unique aspect of these judgments concerns the fact that Dokteronline is located in Curacao. To our knowledge, this is the first time that the court has ruled on fines based on the Medicinal Products Act which have been imposed on legal entities established abroad.

The Minister of Health, Welfare and Sport, now the Minister of Medical Care,[2] and the IGJ have long struggled with enforcement based on the Medicinal Products Act against Dokteronline, due to its location outside the Netherlands. In 2009, the former Minister, in response to parliamentary questions, mentioned a possible violation of Section 67 of the Medicinal products Act.[3] This section prohibits prescribing medicinal products to people whom the prescriber has never met in person, whom he does not know, or whose medication history is not available. Since these parliamentary questions were asked in 2009, the Medicinal Products Act has been amended in various ways, increasing the scope of enforcement. For example, Section 67a of the Medicinal Products Act - which deals with the online sale of medicinal products - has since been introduced, and the options for imposing sanctions have been expanded. Ultimately, the Minister for Medical Care chose to base the fines imposed on Dokteronline not on Section 67, but on Sections 61, 67a, 84 and 85 of the Medicinal Products Act.

The reason for not imposing a fine on the basis of Section 67 of the Medicinal products Act is unknown, but we can imagine that the Minister had doubts about whether it would be possible to establish a violation of this section against Dokteronline, firstly because the article focuses on prescribers, and it is questionable whether Dokteronline is a prescriber in the sense of the Medicinal Products Act, and secondly because the prescribers concerned were not established in the Netherlands, at least not at the time of imposing the fine. This raises the question of whether Section 67 of the Medicinal Products Act can apply to these prescribers who are based abroad.

With regard to the latter question, the opinion of the court in the first instance suggests that it does indeed apply. The District Court ruled that the Medicinal Products Act applied to a company established abroad, as it concerned a website that offered consumers in the Netherlands the opportunity to perform activities that are regulated by the Medicinal Products Act (ECLI:NL:RBDHA:2020:85, section 5).

The assessment criterion used by the court here places the emphasis on the consumer. This seems incorrect to us within the framework of the Medicinal Products Act, which does not regulate the actions of consumers, but of suppliers of products or services on the medicinal products market, such as pharmaceutical companies, pharmacists and doctors. In our opinion, the decisive factor should be whether the actors on the medicinal products market focus on Dutch consumers. After all, the Medicinal Products Act aims to protect Dutch consumers. Based on this yardstick, the Minister for Medical Care could also have imposed a fine on the prescribers concerned who were based abroad, on the grounds of a violation of Section 67 of the Medicinal Products Act. After all, the prescribers concerned prescribed medicinal products to Dutch consumers.

The question whether the Minister of Medical Care is authorised to take enforcement action depends on how the rule in question is structured. Who is it aimed at, who is it intended to protect - and against what? In view of the legislative history of Section 67 of the Medicinal Products Act, this provision aims to safeguard the quality of care, so it is understandable that the related aim is to protect the end user.[4] In that light, it should also be possible to fine prescribers based abroad if their actions affect consumers in the Netherlands.

It remains to be seen whether this also applies to other prohibited actions under the Medicinal Products Act. It follows that companies established abroad can violate Sections 61(1) and 67a of the Medicinal Products Act on Dutch territory, as these provisions focus on the act of "offering for sale". The mere possibility for Dutch consumers to purchase medicinal products via Dokteronline is sufficient to fall within the scope of those provisions. After all, offering for sale does not imply an actual transaction. In addition, it is quite understandable that a website that wishes to be active on the Dutch market must also comply with the Dutch rules. When it comes to violations of Articles 84 and 85 of the Medicinal Products Act involving advertising medicinal products, things become more complicated. In the case of Dokteronline, it concerned statements on its website. As far as we understand from the judgments, there was no targeted advertising to Dutch consumers, for example through advertisements in Dutch media. In our opinion, this is relevant to the question of whether a company established abroad can violate the advertising provisions of the Medicinal Products Act. After all, the enforcement jurisdiction of the Minister of Medical Care is far-reaching indeed if the mere possibility that a Dutch consumer can see the advertisements on a website leads to a violation of Articles 84 and 85 of the Medicinal Products Act.

Follow-up?

In addition to the question of whether it is possible to impose sanctions on a company based abroad under a Dutch regulatory framework, in this case the Medicinal Products Act, the question of the (cross-border) enforcement of sanctions imposed is an interesting one. In total Dokteronline owes the Minister an amount of EUR 114,000. If Dokteronline voluntarily makes payment, of course, there is no problem. However, if it does not, the question arises how the payment can be enforced. In the Netherlands, it is generally the case that an administrative authority that has imposed a fine which is not paid, has, with respect to collection, all the powers that a creditor also has under civil law. After any civil proceedings, however, the same problem will arise if the debtor refuses to pay. Internationally, there are few agreements that the administrative body can fall back on for the enforcement of administrative fines. Within the European Union, Framework Decision 2005/214/JHA is an example of such a cooperation instrument. In the Netherlands, the Framework Decision has been implemented in the Mutual Recognition and Enforcement of Financial Sanctions and Confiscation Orders Act. However, this Act only provides for the enforcement of administrative sanctions in other member states of the European Union, and Curacao is not a member state of the European Union. As far as we have been able to ascertain, there are no specific international agreements on this subject either. For enforcement of the fine in Curacao, the Minister of Health must resort to an exequatur procedure based on international private law. Insofar as such a civil procedure already offers room for the recognition and enforcement of a fine originating from public law, it is a very cumbersome process. It is therefore to be hoped that Dokteronline will take the ‘simple’ option, and pay.

You can find a Dutch translation of this blog here