Food businesses operators that make medical claims for their products in the Netherlands can be fined for doing so under food law. However, they also run the risk of being fined under the Dutch Medicines Act (in Dutch: “Geneesmiddelenwet”), in which case much higher fine amounts apply. The latter sometimes provokes surprise and outrage. Based on three recent rulings, we see a positive trend, which is explained below.
In principle, a medicinal product cannot be sold in the Netherlands without an authorization. Advertising a medicinal product that has not been authorized is prohibited as well. If a product is classified as such and sold without a license, the seller risks a hefty fine.
The legal definition of the term medicinal product and the corresponding authorization requirement can be found in the Dutch Medicines Act, which is based on the European Directive 2001/83/EC (the “Medicinal Product Directive”). The Medicinal Product Directive provides two criteria for the definition of a medicinal product: qualification by presentation and qualification by function. If a product meets one of these two criteria, it is classified as a medicinal product. The aforementioned criteria are further elaborated in case law.
Qualification by function
A product is a medicinal product by function (see the Hecht-Pharma judgment) if it can be administered to cure or prevent disease, diagnose or otherwise affect a person’s bodily functions. Of particular importance here are the composition and properties of the product, the method of use, the extent of distribution of the product, the consumers’ familiarity with the product and the health risks associated with its use.
Qualification by presentation
When applying the presentation criterion (see the Van Bennekom judgment), consideration is – unsurprisingly – given to whether a product should be regarded as a medicinal product on the basis of its presentation. It is not necessary that the product is expressly indicated or recommended as a medicinal product. The presentation criterion is already met if the manner of presentation gives the average consumer the impression that the product has a medicinal effect. The form in which the product is presented may give an indication for this, especially in the case of tablets, pills and capsules.
In particular the presentation criterion poses a risk to food companies. If they (unintentionally) make a medical claim in respect of their product, the presentation criterion may result in this product being classified (also) as a medicinal product by the Dutch Food and Consumer Product Safety Authority (“NVWA”). In that case, the NVWA may issue a fine under the Dutch Medicines Act. The starting point for such fine is €150,000, which is then differentiated based on the Policy rules of the Dutch Ministry of Health 2019. Even if the product also falls within the legal definition of food, the Dutch Medicines Act may apply simultaneously. The foregoing follows from the so-called hierarchy provision embodied in article 2.2 of the Medicinal Products Directive, which has been implemented into Dutch law as well. On the basis of this hierarchy principle, the Dutch Medicines Act is applicable if there is any doubt about the applicable product category. The result of this provision is that even a seller of coconut oil can receive a fine under the Dutch Medicines Act.
New trend in enforcement of medical claims?
Dutch case law gives numerous examples of products being classified as medicinal products by courts based on (solely) the presentation criterion. Recently, three court rulings have been rendered which give reason to assume that there is a new trend in case law. These are a ruling of the District Court of Oost-Brabant of March 25, 2022, and two (materially identical) rulings of the District Court of The Hague of June 28, 2022, regarding food supplements and follow-on milk, respectively.
The first case concerns the sale of dietary supplements, for which medical claims were made. The NVWA therefore classifies these supplements as medicinal products based on the presentation criterion and imposes two fines under the Dutch Medicines Act (both for sale and for advertising an unregistered medicinal product). The seller’s defense is that the Dutch Medicines Act should be interpreted in accordance with the Medicinal Product Directive and that it follows from there that the contested decision of the NVWA is based on an incorrect legal basis.
The court agreed with this argumentation, referring to the amendment of the Medicinal Product Directive of 2004. The court deduces from the preamble to the amendment that the Medicinal Product Directive does not apply if there is no doubt that a product clearly exclusively belongs to another product category, such as food or food supplements. The court ruled that this was indeed the case for the specific circumstances that were under discussion. The products clearly fall under the category of food supplements and therefore solely food law applies. The court confirms that the Dutch Medicines Act must, after all, be interpreted in accordance with the Medicinal Product Directive. The court therefore does not proceed testing the medical claims made against the presentation criterion based on drug legislation at all.
The above ruling raises the question when a product is “clearly exclusively” a food and what aspects of the product are important in this respect. Indications for this can be found in the two recent decisions of the District Court of The Hague regarding specific food products for toddlers, namely follow-on formula. In its assessment of whether the follow-on formula in question could be a medicinal product by presentation, the court determined that such qualification is not obvious with regard to products sold in supermarkets and drugstores. Another factor in this case was that the detailed information about the follow-on formula, on the basis of which the Dutch Ministry of Health (the counterparty in the cases at stake) believed it to be a medicinal product by presentation, could only be found on the seller’s website.
Based on the rulings discussed, we signal a trend that judges are halting the current practice of enforcement of prohibited medical claims for food products based on the Dutch Medicines Act. The discussed rulings make clear that (prohibited) health claims for food supplements and for other food products such as follow-on formula should be assessed on the basis of the Food Information for Consumers Regulation (the “FIC Regulation”), and not via the presentation criterion based on the Dutch Medicines Act. In our opinion this is justified, because since the FIC Regulation became applicable, food law is specifically set up to do so. We are very curious to see whether the trend initiated above will be followed by other courts. Although it follows from a ruling of the District Court of Zeeland-West-Brabant of 21 October, 2022, that this is not yet the case, we trust this will only be a matter of time.
The above does however not mean that food business operators would be allowed to make medical claims for their products. Also, the FIC Regulation contains a ban on medical claims for food products and the Nutrition and Health Claims Regulation sets forth a strict regime for authorized health claims. Having said that, fines following a violation of food legislation are far lower than fines based on the Dutch Medicines Act. On balance, food companies are therefore better off with fines based on food legislation.
This blogpost is written by Max Baltussen, Karin Verzijden and Jasmin Buijs.
The authors want to acknowledge Ebba Hoogenraad and Irene Verheijen for sharing the case law discussed here.
Nothing left to hide? Status quo on Dutch bill permitting active disclosure of food safety inspection resultsPosted: November 9, 2016
Recently, an amendment to the Dutch Health Act (Gezondheidswet) was voted in Dutch Parliament, allowing the Dutch Food Safety Authority (Nederlandse Voedsel en Warenautoriteit or NVWA) to actively disclose its inspection results. The change in the Health Act equally applies to inspection results obtained by the Dutch Health Inspectorate (Inspectie Gezondheidszorg or IGZ) and therefore, it received broad interest from the pharmaceutical, medical devices, and the food industry and their legal practitioners. Three meetings on this topics were organised by respectively the Dutch association of Food Law (NVLR), the Dutch Pharmaceutical Law Association (VFenR) and by the Dutch organisation for food retail and management VMT. This post will put you up to speed on the actual changes to be applied to the Health Act, as well as on the expected consequences of their implementation for food business operators (FBOs).
Importance of inspection results
Inspection results are important for whom it concerns directly (inspected companies, as they provide answers to questions such as: is your organisation compliant? Will a fine be imposed? Inspection results are furthermore of interest to others, such as consumers, journalists and other companies, including competitors, for a number of reasons. These reasons include (but are not limited to) knowing where to supply from and what places to avoid, the possibility to check if your supplier’s manufacturing processes are up to standards and the option to stay informed on what challenges your competitor is meeting.
Active vs. passive disclosure
All administrative bodies disclose information, on their website, in social media, in leaflets, etc. Under the Dutch Act on Public Access to Government Information (Wet openbaarheid van bestuur or WOB) citizens have the right to file a request for information on administrative matters. The disclosure of such information on request of a person is called passive disclosure. Such disclosure does not take place publicly, but the information concerned will solely be provided to the person who filed the request, unless it is rejected based on the limited grounds specified in the WOB. Active disclosure on the other hand means that the information is disclosed by an administrative body prior to any request for information. Such information is publicly available after disclosure. In case of inspection results of the NVWA, these will most likely be published on the website this administrative body.
Rationale disclosure inspection results
The rationale for both passive and active disclosure of inspection results is threefold.
(i) Transparency. Without information on the inspection, one cannot assess the quality of the inspection or view the results of the inspection. This transparency is also present in other areas such as inspection results of the Inspectorate of Education and the Health Care Inspectorate.
(ii) Trust. By showing the results, the public can see what the NVWA is doing and therefore the public can build trust in the NVWA.
(iii) Increased compliance. Negative results of an inspection can lead to serious problems towards consumers or customers, such as liability claims from suppliers who expected to be supplied with products produced in compliance with the applicable quality standards and hygiene regulations). In this way active disclosure increases the pressure on FBOs to comply.
The current system
Opposed to other inspectorates in the Netherlands, the active disclosure by the NVWA is currently not provided for in a specific Act. So far, the mechanism laid down in the WOB has been used as the framework for disclosure of inspection results. Article 8 WOB enables the NVWA to actively disclose information, provided this is done is a clearly understandable way and offering interested parties in due time the opportunity to comment. As far as a request for information by any company or citizen is concerned, there are predefined grounds on which an administrative body cannot freely disclose information, being absolute and relative grounds. The absolute grounds are found to be of such importance that publication is interdicted, like confidential commercial information relating to the safety of the state or information containing personal data. The relative grounds relate for instance to privacy matters or to disproportional harm that could be created by publication. Such grounds have to be weighed against the interests of disclosure. In the current framework, the interested party can express a provisional opinion with respect to any intended publication by NVWA, which has to be dealt with before publication. This mechanism will disappear under the new system.
The new system
When the amendment of the Health Act will enter into force, the NVWA will not only have the option to actively disclose information, but will be obliged to do so. In the legal framework, the assessment of interests is already taken into account, which makes it unnecessary to do another assessment each time the NVWA decides to actively disclose information. In future, the option to express a provisional opinion by the NVWA will no longer be available. The only way to ensure that the information is not disclosed is starting summary proceedings before a civil court. If any interested party is doing so, NVWA will then be forced to suspend its decision to disclose information until the court decides on the matter. In case the NVWA will disclose the inspection report, the NVWA will provide the option for FBOs to provide a reaction to the inspection results, which will be disclosed together with the inspection results. In addition to the change applied to the Health Act, an underlying decree needs to specify more detailed rules on what information exactly needs to be published in what format. In the discussions on the amendment of the Health Act another amendment was added which ensures the underlying decree can only be amended with the approval of Dutch Parliament.
Current status of the amendment
On the 11th of October the House of Representatives of the Netherlands (Tweede Kamer) accepted the proposed changes to the Health Act and amended some parts. The Dutch Senate (Eerste Kamer) accepted the amendments without making any additional amendments on the 1th of November. However, the change of the Health Act has not yet entered into force and it is currently still unclear when the exact date of entry into force will be. Guestimates are hinting at June 2017, however the Ministry of Health Welfare and Sport is still working on the underlying decree on what information has to be published and in what format. There is a fair chance the amendment will only enter into force simultaneously with this underlying decree. In such case the entry into force of the changes to the Health Act will most likely be later than the guestimate mentioned above.
Situation in other EU countries and NVWA pilot
Other EU Member States already have a system of active disclosure of inspection results for restaurants in using a system of easily understandable designations or colours (Denmark and Ireland for instance). In those countries, the outcome of the inspection is presented at the entrance of the inspected restaurant, in order to give the public an overview of the level of compliance at first glance. For instance, a green colour or a happy face means that the restaurant is compliant and colours closer to red or a less happy face mean the place was less compliant. In the Netherlands, the NVWA launched a pilot for disclosure of inspection results for lunchrooms, which were disclosed via an app. This app subsequently displayed the results on a map. The map showed the lunchrooms in four different colours, depending on the level of compliance. The idea was to provide a quick overview of the lunchrooms and the level of compliance. However, the reaction of the minister of Health, Welfare and Sport to this format was negative due to interpretation issues, particularly interpretation of the colours. There are also lists of inspected products instead of inspected FBOs. The experience gained therewith and during the pilot will have to be evaluated in order to choose an acceptable form for the disclosure of over 200.000 inspections done each year in the Netherlands by the NVWA.
The proposed changes to the Health Act have been much criticised. The active disclosure of the inspection results together with the imposed sanctions can be viewed as punitive sanction in addition to the sanction itself imposed based on the findings during the inspection. In the explanatory notes on the amendment of the Health Act, the government explains that active disclosure should not be perceived as a punitive sanction and therefore not a criminal charge in the sense of Art. 6 ECHR. In case the disclosure will be viewed as a punitive sanction, article 6 ECHR will be applicable, meaning the procedural safeguards embodied in this article will apply. Basically, the government states that the disclosure does not aim at punishing the inspected party, and therefore is not an additional sanction. However, the arguments provided by the government in the explanatory notes are not very convincing. Assuming the disclosure will lead to more transparency, consumers and customers will be aware of the non-compliance due to the disclosure. This disclosure can in turn decrease the trust in the non-compliant producer, which could mean a decline in sales or even liability claims from consumers or customers. It is not the fines imposed by the NVWA, but the disclosure of the inspection results, which leads to these (potential) damages of the producer, whom will not have had the chance to remedy the situation before it is out in the open. This is all the more important, as so far there is no evidence that such public disclosure indeed will lead to an increased level of compliance. Moreover, this situation does not seem to be in line with competition law, which constitutes the regular level playing field of any FBO, just like it is for manufacturers of medical devices or medicinal products. Therefore, competition law elements should in our opinion be an aspect of the legislation concerning disclosure. In the explanatory notes to the amendment, this aspect has not even been mentioned.
As a result of a change applied to the Dutch Health Act, the first steps towards active disclosure of inspection results from the NVWA have been initiated. The actual implementation thereof depends on the underlying decree, which is still under construction. This is why is not clear as of when the legal basis for active disclosure of NVWA inspection results will be operational. As of this moment however, FBOs will be subject to increased enforcement measures, without the effect thereof being necessarily positive. We will keep an eye out for you and report on any relevant development in this field, as they are likely to have an important impact for each FBO.
The author thanks Floris Kets for his contribution to this post.