Changing policy focus through organizational reform? The case of the pharmaceutical unit in the European Commission

Abstract

This article contributes to the debate on the significance of organizational structure for administrative decision behaviour by exploring the effects of a reorganization in the European Commission. It is shown that the move of the pharmaceutical unit from DG Enterprise to DG SANCO impacted on the process of developing a regulatory framework on information to patients. After the reorganization, the focus of the policy process changed from industry to public health and other action alternatives became salient, which eventually led to changes in the policy outcome. The article demonstrates how horizontal specialization systematically tips the scales in the direction of certain actors, solutions, interests and concerns in decision processes, eventually resulting in a change of policy focus. The gap between organizational structure and administrative decision behaviour is thus not as large as is often assumed in the literature.

Keywords

Decision behaviour European Commission organizational structure organizational theory pharmaceutical policy reorganization

Introduction

Structural reforms are frequently carried out within different policy areas and at different levels of public administration, with the aim of changing policy processes or outcomes. At the same time, reports on flawed reforms and absent results are frequent. Reform effects are ambiguous and difficult to anticipate (Olsen, 1997: 206). Theoretically, this taps into a heavily debated topic in public administration literature on the potential for deliberate design and redesign of public policy. The debate has been dominated by perspectives highlighting the importance of informal factors for decision-making behaviour, whereas perspectives emphasizing the explanatory value of organizational structure has been downplayed (Hammond, 1990). Although interest in the relationship between organizational structure and decision behaviour has recently resurged, the impact of reorganizations remains underresearched (Toonen, 2012: 574). This article contributes to the debate by showing that the gap between organizational structure and administrative decision behaviour is not as large as is often assumed in the literature. Restructuring a policy field can change policy processes and eventually have consequences for policy focus by affecting which action alternatives that are perceived as salient.

Empirically, the article investigates reform effects in a case where the pharmaceutical portfolio (i.e., the pharmaceutical unit) in the European Commission (the Commission) was moved from the Directorate General (DG) for Enterprise and Industry (DG Enterprise) to DG Health and Consumer (DG SANCO) in March 2010. EU pharmaceutical policy had long been seen as leaning towards pharmaceutical industry interests by both practitioners, experts and academics (Permanand, 2006), and a desired shift in pharmaceutical policy was signalled by the inclusion of medicines in the health article in the Lisbon treaty (Art. 4c, 168 TFEU) in 2009. However, given the high incidence of failed reforms, what effects can one expect of moving an organizational unit from one department to another? And how fast can one expect effects to materialize? These questions becomes even more pertinent in light of that the shift in DG affiliation was the only thing that was changed: the unit itself was moved intact, and its structure, tasks, size, professional composition and physical location largely remained the same in both DGs. The article applies a structural-instrumental perspective and a cultural-institutional perspective that unpacks the organizational context and singles out these factors as independent variables that in different ways may shape decision behaviour. Given the limited change in the officials' organizational context, the case can be seen as a least likely case in the sense that the independent variables are at values that only weakly predict an outcome (George and Bennett, 2005: 121). The research question is: To what extent and how did the change in DG affiliation affect decision behaviour within the pharmaceutical unit?

The independent variable, decision behaviour in the Commission, is understood as the many choices and decisions that officials make as they perform their tasks during the different phases of the policy cycle. The decision process concerns more than the formal decision that is made (e.g., a concrete policy proposal); it also includes agenda-setting, policy formulation, decision-making, policy implementation and evaluation (Howlett et al., 2009). The study concentrates on the process of developing a regulative framework on information to patients about prescription medicines, which took place from March 2004 to October 2011. This allows for a comparison of decision behaviour before and after the reorganization. The aim is to identify the extent to which behavioural patterns reflect organizational structure, in this case the sectorial DG specialization of the Commission, and to detect potential changes after the reorganization. Impact on decision behaviour is ‘measured’ by examining the officials' behavioural patterns in the policy process: who and what they paid close attention to, perceived as important and in the end prioritized during the policy process. Indicators for this are the officials' perceptions of problems and solutions as well as actors, interests and concerns.

The analysis shows that in the process of developing a regulatory framework for information to patients, the officials in the pharmaceutical unit were continuously exposed to and needed to balance between multiple competing actors, solutions, interests and concerns. DG affiliation was crucial when it came to how problems were understood and solved, as well as which contacts were prioritized and what concerns and interests were stressed when decisions were made. The change of focus implied that the officials went from mainly prioritizing industry actors, interests and concerns to emphasizing public health actors, interests and concerns. Eventually, the content of the policy proposal became more focussed on patient and consumer rights than it was before the reorganization.

However, it is important to note that DG affiliation is not the only factor that can account for variation in decision behaviour. Alternative explanatory factors, such as the impact of the other community institutions and the wider EU institutional context, are also taken into account. In addition, findings revealed that certain behavioural patterns remained unaffected by the reorganization. It is argued that this can be explained by the continuity in the unit structure, its location, professional composition and organizational culture.

Why study the impact of organizational structures? Those who participate in public decision-making processes act on behalf of formal organizations, and how they use their influence and discretion is influenced by the constraints and possibilities offered by the organizations they represent (Christensen et al., 2007: 9). A greater insight into how organizing and reorganizing public administration impacts on decision processes and the content of public policy should be of interest to academics studying organizations as well as practitioners in a position to carry out organizational reforms. In the next section, relevant literature is reviewed and the theoretical framework outlined. Then follows a description of data and method. The empirical findings of the case study are then presented, and finally, the findings are discussed in a concluding section.

Studying the impact of organizational structure: An organization theory approach

Although theorists agree that organizations matter in explaining administrative behaviour, the relative significance of organizational structure is widely debated within the public administration literature. The lack of systematic empirical research on the relationship between bureaucratic structure and actual decision behaviour has been explained as a result of Herbert Simon's criticism of the so-called classical school of administrative theory where the importance of structures for decision behaviour was questioned and consequently de-emphasized in organizational studies (Hammond, 1990) ‘The new style was to downgrade the importance of the formal hierarchical structure of bureaucracy. What came to be known as the ‘informal organization’ was what was important’ (Hammond, 1990: 144). The following example is illustrative:

Once systems are developed and patterns of organization behaviour are established, in most instances they cannot be altered significantly by interdepartmental reorganizations. This is particularly true when bureaus […] are moved intact from one department to another. Reorganizations may result in scarcely more than a new name on the letterhead. Where changes are produced, they are seldom those anticipated or intended by the proponents of the reorganization. Vin ordinaire cannot be transformed into champagne merely by shifting the location of the bottle in the wine cellar. (Seidman, 1980: 169–170)

Recent years have witnessed a resurgence of interest in structural design in both national and international administrations (for a review, see Egeberg, 2012a). Comparable to national ministries, the Commission is divided into DGs that reflect sectors or function. A number of Commission studies indicate that this specialization has consequences for the decision-making processes taking place within it. The Commission has been depicted as a heterogeneous organization with competing DGs (e.g., Cini, 1997; Cram, 1994) and DG affiliation has been pointed out as one crucial factor for understanding policy choices, not only for the Commissioners in the College but also for officials at unit level (Egeberg, 2006a; Egeberg, 2012b; Suvarierol, 2008; Trondal, 2012; Trondal et al., 2008; Trondal et al., 2010). In addition, the heterogeneity of the Commission also seems to affect relations to interest groups, as each DG has become associated with particular client groups (Bouwen, 2009; Mazey and Richardson, 2006). Generally, it is argued that the Commission as an executive is becoming more normalized. While starting out in the 1950s as a technocratic international body, it is increasingly evolving into an executive body as is typical of the executives we are familiar with at the national level as regards organizational and behavioural patterns. This is one development that indicates that a transformation of the European executive system is taking place (Egeberg, 2006a; Trondal, 2010; Wille, 2013).

When it comes to organizational reform, studies have mainly concentrated on the causes of establishing new or changing old structures, i.e., explaining and describing reform processes, but the effects of structural reform on decision behaviour has been given less attention. Arguably, a study in which behaviour has been observed subsequent to reorganization has a value in itself and if behavioural changes can be traced under this circumstance, it is more likely that a cause-effect relationship really exists (Egeberg, 2012a: 162). A distinction can be made between two types of effect studies; the first group are those focussing on effects of reforming internal Commission administrative management (see for instance Bauer, 2008, 2009; Schön-Quinlivan, 2011), the second group are those that focus on effects of reforms aimed at changing policy content, such as the present study. Here, one exception to the lack of studies is Hult (1987), who found that organizational merger may foster shifts in policy direction and impact on relations to interest groups, by making networks more differentiated and diluting established ‘iron triangles’. In addition, Mörth (2000) found that reframing the defence equipment and industry issue in the Commission activated other perspectives, actors and knowledge, and also strengthened the Commission's relationship with particular external actors.

This article draws on theoretical propositions from two strands of organization theory: a structural-instrumental perspective and a cultural-institutional perspective. These perspectives agree that organizations influence the thinking and actions of their members, but highlight different explanatory factors (structural and cultural respectively). Reasons to expect people to comply with organizational norms are found in the different action logics that theoretically connect organizations and actor behaviour; bounded rationality, logic of appropriateness, deliberative rationalism and incentive systems (Trondal et al., 2008: 257).¹ Although these perspectives represent different sides of the debate, the explanations are understood as complementary (Roness, 2009: 50).

The structural-instrumental perspective (as developed by Egeberg, 2012a) is useful because it unpacks the decision-makers organizational context by highlighting an organization's structure, demography and locus (Egeberg, 2012a: 158). Organizations are seen as capable of endowing individual actors with goals and interests, implying that how participants distribute their attention – how they think and act and what and who they attend to as they perform their daily tasks – is affected by their organizational position in a systematic and routine way. Organizational structure is important as it expresses impersonal role expectations and norms for action. Who should do what, how and when in the everyday work, including which interests, values and goals that are to be pursued, or which problems and solutions are important, is built into the structure (Egeberg, 2006b: 33). A key assumption is that individuals are bounded rationally and not capable of overseeing all alternatives and possibilities when they make decisions (Simon, 1997). This means that when choosing between different action alternatives, an individuals' organizational context can work to simplify complex problems by narrowing down and sorting both feasible and unfeasible policy options (Egeberg, 2012a).

The relevant dimension of organizational structure in this article is horizontal specialization, which refers to the way tasks and activities are distributed among units at one level, and expresses how different issues and policy areas are supposed to be linked or de-coupled. The specialization principle applied is central, as organizing according to the principle of purpose fosters sectorial perspectives among decision makers and makes it more likely that decision behaviour follows sectoral lines (Gulick, 1937).² Structural designs, therefore, ‘route’ information exchange, coordination processes and conflict resolution (Egeberg, 2012a: 161). In the present case, one would expect that DG structure impacts on decision behaviour in the pharmaceutical unit by inducing sectoral behavioural patterns. The change in DG affiliation would be expected to change behavioural patterns in terms of how officials view the different problems, solutions, actors, concerns and interests they are exposed to.

Another factor that may impact on decision behaviour is demography, which refers to personnel composition in terms of different personal attributes within the social entity under study (Egeberg, 2012a: 159). Individuals may internalize certain values, norms and role expectations belonging to a particular profession, which condition their decision behaviour. In addition, organizational locus may lay premises for the unit's decision behaviour. This refers to how features of location and physical space create physical boundaries that focus decision makers' attention and facilitate planned and random face-to-face contact, i.e., contact patterns, information flow and co-ordination behaviour (Egeberg, 2012a: 160). Given this, one would expect that the professional composition of the pharmaceutical unit and their location impacts on how the officials view the different problems, solutions, actors, concerns and interests they are exposed to during the policy process. Since the pharmaceutical unit's composition and location where not reorganized, one would expect these factors to contribute to preserve existing behavioural patterns in the pharmaceutical unit.

The cultural-institutional perspective highlights the significance of the informal organizational dimension, in particular, the role of administrative-cultural traditions in explaining bureaucratic behaviour (Christensen, 2012). The logic of appropriateness is a key mechanism connecting the organization and behaviour. Organizational culture entails a relatively consistent set of rules, norms and identities, and through a matching process, the individual intuitively links situations to culture in order to establish what actions are appropriate when facing complex decision-making situations (March and Olsen, 2006). An organization's degree of institutionalization is an essential factor in prescribing what is appropriate behaviour. Institutionalization refers to the process by which informal norms, practices and values evolve and become important for organizational activities. This implies the classical understanding by Selznick (1957) of how organizations grow into institutions as informal structures are gradually developed and infused with meaning over time (age is thus crucial). Typical characteristics of a political-administrative culture may entail balancing between loyalty to leadership and professional norms and balancing between premises of professional norms and values and basic facts and contexts they themselves are specialists in. Other common features may be procedural conditions, such as due process, predictability, equal treatment, transparency and information (Christensen et al., 2007: 49–50). Institutionalization of an organization's culture makes the organization resistant to change, and the relationship between structural reform and change in decision behaviour less evident from a cultural institutional perspective (Olsen, 1997). ‘Administrative culture is much more than just one item in a list of variables. It is what underpins all activity within institutions, creating a foundation of shared meaning, interpretation and values upon which all institutional activity rests’ (Cini, 1997: 73). In the present case, one would anticipate that decision behaviour reflects a particular unit culture, in terms of informal rules, norms and values that have developed over time. Formal structures would be less reflected in behaviour, and the reorganization would have little, if any, impact on how the officials view the different problems, solutions, actors, concerns and interests they are exposed to during the policy process.

Data and method

The decision behaviour of the officials in the pharmaceutical unit was studied within the process of developing a legislative framework on information to patients from March 2004 to October 2011. The study compares decision behaviour before and after the reorganization in March 2010, and in addition to official documents and secondary literature, the study builds extensively on 18 semi-structured interviews with one national official; nine former and current Commission officials (permanent and seconded staff); five representatives of stakeholder organizations; and three representatives from the European Medicines Agency (EMA). Consequently, the empirical material covers how unit officials' themselves perceive their own behaviour as well as how their decision behaviour is perceived by actors in their close environment. The extent to which decision behaviour reflects formal (or informal) structures of the Commission is established based on these perceptions of the officials' distribution of attention.

There are some methodological challenges to measuring reform effects, concerning data and timing. Ideally one would want data gathered at two points of time (dynamic data), before and after the reorganization. However, the data material is gathered after the reorganization took place and qualifies only as ‘quasi-dynamic’. Furthermore, one faces the attribution problem (Christensen et al., 2007: 150); as time passes, the probability of revealing lasting reform effects increases, but so too does the difficulty of isolating the effects of a specific reform and changes that have occurred concurrently in the meantime (Askim et al., 2010: 234). In this study, the possibility of isolating (short term) effects is prioritized, meaning that the effects revealed might be temporary. Yet, this gave the opportunity to explore and exclude potential variation and impact of other explanatory factors. Four independent factors were constant: unit structure, professional composition, location and culture; and one factor varied, DG affiliation. Operationalizing organizational structure, demography and locus is relatively straight forward, as it requires knowledge about the Commission's organizational chart, the unit's professional composition and its location. Organizational culture is more difficult to operationalize, but was identified as the sum of existing informal norms, values and beliefs in the organization that the interviewees accounted for during the interviews.

Changing pharmaceutical policy focus?

The pharmaceutical policy field in the Commission

Pharmaceuticals are ‘peculiar’ (Permanand, 2006: 3) given they are industrial manufactured products with wide-ranging influence on public health. Consequently, pharmaceutical policy is connected to both the industry sector and the health sector. This dual aspect makes it a highly complex policy field to regulate as a heterogeneous group of actors (consumers, patients, industry, member states) are affected by pharmaceutical policy and have interests that are not easily reconciled (Permanand, 2006: 6; Permanand and Mossialos, 2005: 690).

Although a long-standing aim of EU pharmaceutical policy, there is no common European market for prescription drugs. This can be explained as a consequence of the ‘clash’ between the supranational free movement rules for goods and the subsidiarity principle (Permanand and Mossialos, 2005). As the member states are in charge of their own health policy, the Commission has, from the outset, had limited competence within this field (Mossialos et al., 2010). Although the health aspect was always significant in the pharmaceutical legislation,³ policy remained the responsibility of DG Enterprise, which promotes the internal market, favourable framework conditions for European industry, economic growth, innovation and job creation (Sabathil et al., 2008: 145–148).⁴ This organization became over the years an issue of conflict. Patients' and consumers' groups, as well as MEPs and member states, advocated a reorganization to DG SANCO, which seeks to empower consumers, to protect and improve public health and to ensure that the EU's internal market works for the benefit of consumers.⁵ EU pharmaceutical policy was perceived as ‘captured’ by industry, that is, being dominated by industry actors and interests, and focussed on developing a single market and a globally competitive pharmaceutical industry. The regulatory framework was described as favouring the pharmaceutical industry at the expense of health and consumer concerns (Abraham and Lewis, 2000; Baeten, 2010; Boessen, 2008; Carboni, 2009; Geyer, 2011; Permanand, 2006; Permanand and Mossialos, 2005). It was questioned whether a reorganization would actually impact on EU's pharmaceutical policy (Boessen, 2008: 139) as ‘simply passing the brief to DG SANCO would be too simplistic a solution’ (Permanand, 2006: 193). The formal transfer of the portfolio, which took place in March 2010 in connection to the launch of the Barosso II Commission, received great attention and was welcomed by many.⁶

The pharmaceutical unit

The administrative subunit with particular responsibility for pharmaceuticals was established in the mid-eighties (Hauray and Urfalino, 2009: 435). The unit's amount of tasks has steadily increased over the years and in October 2011, approximately forty people staffed the unit, including 25 Administrators with backgrounds in pharmacy, chemistry, biology, human and veterinary medicine, law and economics. The unit carries out tasks such as initiating, preparing, and revising pharmaceutical legislation, decision-making on marketing authorizations, monitoring of member state implementation of pharmaceutical legislation, managing of infringement procedures, and supervising the EMA. DG Enterprise and DG SANCO differ widely in purpose and hence constitute very different frames for pharmaceutical policy. Yet, the reorganization mainly constituted a change in DG affiliation for the unit, its structure, tasks, size, multidisciplinary professional composition and physical location remained the same.

The unit culture is characterized by the special position between two sectors. Interviewees emphasized the importance of performing tasks effectively and being objective. A DG SANCO official pointed out ‘if you look at the objectives of the legal framework, it has always had the purpose of securing safety, quality and efficiency. This was always the basis [and] this has always been taken seriously by the pharmaceutical unit’ (#5). The unit is referred to as an ‘island’, both in DG Enterprise and DG SANCO, due to the large staff and its professional composition, the high technical level and comprehensive amount of the tasks and the legal portfolio they are responsible for. In DG Enterprise, the unit stood out because ‘you can't compare medicines to cares’ (#4). In DG SANCO, the unit stands out because ‘Pharmaceuticals is an area where we really have competences under the treaty. It is of course protection of public health, but it is internal market as well’ (#4).

The policy process: Information to patients

Advertisement of medicinal products in Europe is currently regulated by Directive 2001/83/EC, banning advertising for prescription products (Council/Parliament, 2001). The rationale behind the ban is that advertising would boost healthcare expenditure, without necessarily contributing to health gains, and that the needless consumption of drugs can be harmful to health (Baeten, 2010: 174). DG Enterprise proposed to relax the ban on advertising in 2001,⁷ following pressure by the European pharmaceutical industry (Baeten, 2010: 175; Boessen, 2008: 104; Hancher and Földes, 2011: 5). The proposal was rejected in 2004, but the European Parliament (EP) and the Council asked the Commission to present a report on the current practice of information provision in member states, and, if appropriate, put forward a proposal setting out an information strategy to ensure good, quality, objective, reliable and non-promotional information on medicinal products (Council/Parliament, 2004; Hancher and Földes, 2011: 5–6). A report, developed by the pharmaceutical unit and presented in December 2007, concluded that rules and practices on information provision differed widely among the member states (Commission, 2007a), especially with regard to content, public access to information, information channels and control mechanisms (Commission, 2007b). Consequently, the pharmaceutical unit developed a legislative proposal on information to patients (Commission, 2008a; Commission, 2008b; Commission, 2008c).⁸ During spring 2008, a public consultation was held on the key ideas of the forthcoming legal proposal. In addition to the aim of harmonizing practices on information provision in member states, the consultation paper stated:

A major part is to present a clear distinction between advertising of and information provided on prescription medicines. This distinction as well as the quality criteria, the content and means of the information provided, together with the proposed structure for the monitoring of the quality of the information, should create a framework for the industry to provide certain information on their medicines to the public. The proposal should enable EU citizens to get objective information from reliable sources.

(European Commission, 2008a: 5–6)

The proposal presented in December 2008 reflected the major aims and objectives stated in the consultation paper, but was rejected by the Council in 2009 due to fear of increased health expenditures and circumvention of the advertising ban (Council, 2009a). The Council was unwilling to move forward with the proposal before the Commission made considerable changes (Council, 2009b; #1, #2, #6). In November 2010, the EP adopted a series of amendments to the proposal.⁹ In the pharmaceutical unit, the work with the proposal was put on hold after the Council rejection in 2009, and was not resumed until spring 2011 (#6). A revised proposal was tabled in October 2011 (Commission, 2011a; Commission, 2011b).

Problems and solutions

Which problems did the pharmaceutical unit focus on during the policy process, and what solutions were prioritized? Throughout the process, the main conflict issue concerned the role of industry as a (neutral) source of information. In addition, disagreement centred on the distinction between advertisement and information, what channels should be allowed for information provision and what monitoring and control arrangements should be introduced. Conflict clearly followed sectorial lines within the Commission with DG SANCO strongly opposing the 2008 proposal through the inter-service consultation. ‘I think it is well known that there were quite some struggles within the Commission at that time.’ […] DG Enterprise wanted a more active role for the industry, while DG SANCO was more sceptical (#1).

External interest groups roughly made up a ‘health coalition’ opposing the proposal, with an ‘industry coalition’ in favour of the proposal. The first group included healthcare professionals and organizations, patient and consumer groups, and social insurance organizations; the latter group consisted of pharmaceutical industry associations and companies (Carboni, 2009: 27–28). The health coalition argued that information provision is a task for regulators and health professionals, and that the role of industry should be limited due to their commercial interests. The industry coalition argued that the pharmaceutical industry possessed essential knowledge and should have a central role in providing information about their prescription products.

From the beginning, the pharmaceutical unit was convinced that a better framework was necessary. The existing regulatory framework was perceived as inadequate, defining advertising only vaguely and not regulating provision of non-promotional information, leaving the borderline between advertising and information unclear (Commission, 2008a: 5–6). In addition, the 2007 report had uncovered that information provision in the EU was not harmonized. The legal framework caused some disagreement between the unit and the DG leadership. Although the proposal in legal terms would not remove the ban on advertisement for pharmaceuticals, there was ambivalence in the pharmaceutical unit regarding whether industry could be a neutral source of information.

Is the industry really able to give – which also was something we gave many thoughts as well – neutral information? Isn't it kind of inherent, that when you want to sell a product, you present it in the most favourable way? Can the industry be a source of information to the general public? That was one of the major points for SANCO. Not only for SANCO – that was the overarching doubt for all discussions.

(#9)

Despite the uncertainties, the unit aligned with the industry coalition and prioritized solutions that would generally secure a strong role for the pharmaceutical industry in information provision when they drafted the 2008 proposal. The 2007 report emphasized the public health gains of revising the legal framework, but clearly stated that ‘the pharmaceutical industry possesses the key information on their medicines but this information can currently not be made available’ (European Commission, 2007a: 9), implying that a key role for industry as a source of information was envisioned.

The basic idea was that the pharmaceutical industry […] has certain information on medicinal products because they have done all the studies […], they have the data, and why should they not be a source of information to the public? And enabling the public to judge by themselves what kind of information they want and to give them the entire picture of what is available in terms of information

(#9)

After the reorganization, conflict continued to follow sectoral lines. The unit was still convinced of the need to revise and improve the existing legislative framework, and this was accepted more broadly in relation to the 2011 proposal than the 2008 proposal – also by DG SANCO, the member states and the health coalition. As a result of the reorganization the unit chose a different approach to the main problem: it was no longer a question of enabling the pharmaceutical industry to give information about their products, it was about how to strengthen patients' and consumers' rights to receive information about medicines. The industry would still have a role in information provision, but the basic premise was no longer that industry could be a neutral source. The reorganization therefor resulted in substantial changes in the focus of the regulatory framework. In revising the proposal, the unit concentrated on patients' and consumers' right to receive information as opposed to companies' rights to give information. The 2011 proposal introduced restrictions on industry's latitude, establishing pre-control arrangements and restricting what kind of information that could be provided as well as which channels that could be used (#6). The 2011 proposal, therefore, became more in line with the demands promoted by DG SANCO and the health coalition earlier in the process.

The information must be asked by the patients in order to be delivered. It is the ‘pull’ principle against the ‘push’ principle, and this is very well defined now in the proposal. Patients should get information when they ask for it, not get it when they do not want it. This is the difference

(#6)

The change of perspective in the pharmaceutical unit after the reorganization is confirmed by respondents outside the Commission as well. ‘The medicinal product is not seen as the goal […], it is more an element that contributes to the overall EU objectives of public health. There was a shift in mind-set on how the medicinal product should be considered’ (#10).¹⁰ Despite the change of focus, it was underlined by several of the interviewees that the unit was undergoing a process of adapting to DG SANCO. The legal framework still regulates the pharmaceutical industry, and the officials also need to take this into account when they consider problems and solutions.

Interaction and coordination

Who did the unit interact and coordinate with in the process of developing a framework on information to patients? Whose interests and arguments did the officials emphasize in the policy process? Unit officials emphasize that horizontal and vertical contact and co-ordination within the pharmaceutical unit itself and its own DG as most important, independent of DG affiliation. Relations within the unit remained stable throughout the process, which is not so surprising since the unit was moved intact. However, an important implication of the reorganization was that intra- and inter-DG interaction changed. The unit's closest contacts in DG Enterprise were replaced by DG SANCO contacts and DG Enterprise replaced DG SANCO as an external DG with interests but less influence in the policy process.

Politico-administrative signals were reported to be imperative throughout the process, and the reorganization caused a change of substance in the political interests and arguments that the unit was exposed to and emphasized during the policy process. For example, in DG Enterprise it was a pronounced political wish to use the legislative framework to facilitate the pharmaceutical industry (#2, #9, #8), whereas in DG SANCO there was a clear political aim in restricting the role of the industry and strengthening the rights of consumers and patients (#1, #2, #5, #6, #7).¹¹

Clearly, this DG [SANCO] has less responsibility for promoting European industry than DG Enterprise. I believe in the longer term the overall public health perspective will, as it already has in this case [the information to patients process], show a stronger overtone than earlier. And this is logical, because at the inter-service consultations, we would earlier be able only to comment on that we were critical, whereas now it is our responsibility to actually prepare it – and then others can be critical if they perceive it as to little suitable for the pharmaceutical industry

(#5)

When it comes to contacts external to the Commission, the unit interacted with a range of actors such as the other Community institutions and interested parties. Continuous contact with the EP and the Council was central and the interests of the member states and the arguments of the EP in connection to the amendments were important throughout the process. With regard to interest groups, all the officials interviewed underlined that a broad, cross-sectorial network of external contacts is highly valued. This was evident in that they routinely organized consultations and participated in meetings and different forums: ‘[I]t is an on-going dialogue’ (#6). The officials also underlined the importance of considering all the different views involved in the process. ‘[T]he legislative process in the Commission is always to balance the interests, to listen to everybody’ (#4). However, actors sharing their sectorial affiliation were perceived as particularly affected parties that should be favoured with regards to access. In DG Enterprise, therefore, contact with the pharmaceutical industry was prioritized.

We were contacted by both consumer protection groups […] and got feedback from them as well as from the industry. […] Industry was quite favourable, and consumer protection groups and association groups were less favourable, to put it like that. Since normally Enterprise worked or was in touch more with companies, it is their primary stakeholder.

(#9)

Well, we listened to all. Lots of comments were received, and everybody was heard. But in the end of the day it was clear that the idea of industry being able to provide information should be maintained. It was more a question about how to go about to do this […]. There was a clear view that “we want to pursue this project, we see a value in it”

(#9)

After the reorganization, the scope of contact with the pharmaceutical industry decreased. ‘[T]here is definitely less contact with the industry. They might not be happy about it, that is another thing’ (#4). The network was still significant in the sense that DG SANCO has a broader network of contacts in the health sector than DG Enterprise, implying that new actors from the health sector gained access after the reorganization. Consumers and patients were regarded as most important among interested parties, and the salience of the interests and arguments of health sector groups increased.

Maybe the NGOs and [consumer] organizations and so forth were more used to working with SANCO […] because SANCO was their main interlocutor […] Protection of public health is the primary goal, and there is more reluctance to have too many contacts with the industry

(#4)

Representatives of the interest groups confirm these changes in behavioural patterns: whereas patients' and consumers' groups experienced easier access after the reorganization, industry groups found it more difficult to interact with the unit. Industry interest groups express discontent with this development. ‘[S]ince the reorganization, things have become more opaque and less transparent’ (#10). A consumer/patient group representative explained it this way:

The people in DG Enterprise are concerned about the single market, about innovation, about competition, about boosting the economy and about employment, first and foremost. Health for them is a secondary concern. […] So after the pharma move, we noticed that it became easier to work on information to patients because the people were in DG SANCO and not in DG Enterprise

(#9)

Concerns

Which concerns did the pharmaceutical unit emphasize? Throughout the process there were numerous concerns to be considered. Some overall concerns were central, independent of DG affiliation, such as harmonizing information provision in the EU and improving the quality of the existing regulatory framework. At the same time, some concerns were ranked higher than others in the process of developing the regulatory framework. In DG Enterprise, the unit prioritized industry sector concerns, including, a clear and simple legal framework for the pharmaceutical industry, equal obligations and opportunities for all companies, legal certainty for marketing authorization holders with cross-border activity and sustaining the European pharmaceutical industry's competitiveness (European Commission, 2008a: 2).

DG Enterprise is focussed on enterprise […] So there is a different focus, although you are talking about the same thing. You're talking about medicinal products, but there are different facets to everything. It is more the enterprise side, and of course that came into play here.

(#9)

After the reorganization, however, industry sector concerns were less emphasized. ‘In DG SANCO, the focus is on public health’ (#6). When revising the legal proposal, the unit focussed on concerns such as strengthening patient rights, the rational use of medicines, ensuring equal access to neutral, quality information (especially on the internet) and preserving the initial ban on advertisement. ‘It is obvious that the amended proposals are more oriented towards the patients’ (#6). Also respondents outside the Commission confirm that they have observed a change in what concerns the unit focus on after the reorganization, both in the case of information to patients and in general (#10-#14, #16-#18). It is underlined by the officials in the unit that although they are in DG SANCO and public health comes first, industry and market concerns still have to be taken into account.

I can say from the point of view of myself, and many of my colleagues, I believe, that the change is not very dramatic notably because the legal framework is still the same. And this is what I keep repeating. I am still doing the same thing […]. However, there is a change in emphasis

(#4)

Concluding discussion

This article departs from the theoretical debate on the potential for deliberate design and redesign of public policy. While perspectives highlighting the importance of informal factors for decision-making behaviour have dominated previous research, this article contributes by showing the value of organizational structure in explaining decision behaviour. The analysis demonstrates the extent to which decision behaviour, and eventually policy outcomes, can change after reorganization. Supporting the structural-instrumental perspective, behavioural patterns clearly reflected the DG structure of the Commission both before and after the reorganization. The reorganization of DG affiliation changed how the pharmaceutical unit perceived and prioritized problems, solutions, actors and concerns. The pharmaceutical unit went from mainly prioritizing industry actors, interests and concerns to emphasizing public health actors, interests and concerns. The main consequence of the reorganization was a change in policy focus in the process and eventually a change in focus and content of the (second) legislative proposal. The short time that had passed since the reorganization took place implies that behavioural patterns may change and develop further and new patterns arise (the officials in the unit are clearly still in a process of adapting to the new DG). Yet, the fact that the behavioural change took place relatively short time after the reorganization strengthens the structural-instrumental perspective. The perspective is further strengthened considering how limited the reorganization actually was, confined to the unit's external organizational environment. The unit was moved intact from DG Enterprise to DG SANCO, the unit structure (the officials' primary organizational affiliation) and its multidisciplinary staff retained. In addition, their physical location in DG Enterprises' building remained the same.

Other factors as well were central in changing the direction of the policy process and its outcome, such as the dissatisfaction of the Council, and the amendments suggested by the EP. In addition, the empirical material revealed behavioural patterns that were not affected by the reorganization. In addition to listening to leadership, some concerns were considered crucial independently of DG affiliation and throughout the policy process, for instance the general issue of harmonizing the pharmaceutical legislation and its practice, improving the legislative framework and balancing the relative attention paid to the different actors, interests, and concerns involved. It is likely that this continuity in decision behaviour can be explained by the organizational factors that were not reorganized: the multidisciplinary staff, its location, structure and unit culture remained stable. In many ways the officials continued to carry out their daily tasks after the reorganization in the same manner as before. Professional expertise was key to the officials during the processes. In addition, a strong unit culture seemed to be connected to the ‘peculiarity’ of pharmaceuticals: indifferent of DG affiliation, the unit was still ‘island’. Furthermore, values and norms of neutrality, equal treatment, transparency and loyalty to leadership seemed prominent to the officials throughout the process. This supports the cultural-institutional perspective.

Besides showing the significance of rearranging organizational structure for administrative decision behaviour in the Commission, the findings support earlier studies showing that DG affiliation is an important supplier of conditions when it comes to choices in decision processes: not only who gets access to processes in the Commission, but also how problems are perceived and solved and whose interests and concerns are emphasized (Bouwen, 2009; Egeberg, 2006a, 2012b; Mazey and Richardson, 2006; Mörth, 2000; Suvarierol, 2008; Trondal, 2012; Trondal et al., 2008, 2010). In the larger perspective, the findings support the hypothesis that the Commission as an executive is becoming more normalized, indicating that a transformation of the European executive system is taking place (Egeberg, 2006a; Trondal, 2010: Wille, 2013). It can be argued that the move of pharmaceutical policy to the ‘health department’ and its strengthening of the public health perspective in pharmaceutical policy has increased the Commission's pharmaceutical policy administration resemblance with similar administrations at member state level.

The study leaves little explanatory power to the hypothesis of regulatory capture in the pharmaceutical field in the Commission (Abraham and Lewis, 2000; Baeten, 2010; Boessen, 2008; Carboni, 2009; Geyer, 2011; Permanand, 2006; Permanand and Mossialos, 2005). Although the pharmaceutical field was dominated by industry before the reorganization, this article shows that this was due to the characteristics of the Commission's organizational structure. Demonstrating the importance of organizational structure, this study also refutes the assertions that a reorganization would not make a difference to EU pharmaceutical policy (Boessen, 2008; Permanand, 2006). The reorganization seems to have strengthened the public health perspective in pharmaceutical policy.

The process on information to patients is special in the sense that it goes to the core of the ‘clash’ between the subsidiarity principle and the supranational free movement rules (Permanand and Mossialos, 2005), and perhaps created more conflict than other policy processes in the Commission. The change of policy focus might thus be particularly clear in this process. However, it is likely that the change of focus applies to the general behaviour of the officials in the pharmaceutical unit and to other policy processes and outcomes as well, given the clear perceptions in both the unit itself and its organizational environment. Although further research on reform effects is necessary, it is likely that corresponding reorganizations in other DGs and national ministries will have similar effects. Generally, the comprehensive change in decision behaviour and policy outcome after the reorganization strengthens the theoretical hypothesis of the significance of organizational structure for decision behaviour: the gap between organizational structure and actual decision behaviour is not as large as is often argued in the theoretical debate.

Footnotes

Notes

Interviews

#1 Former official, DG SANCO, 25 October 2011.

#2 Former official, DG Enterprise (Pharmaceutical unit), 23 November 2011.

#3 National official, 6 December 2011.

#4 Official, DG SANCO (Pharmaceutical unit), 8 December 2011.

#5 Official, DG SANCO, 8 December 2011.

#6 Official, DG SANCO (Pharmaceutical unit), 8 December 2011.

#7 Official, DG SANCO (Pharmaceutical unit), 19 April 2012.

#8 Former official, DG Enterprise (Pharmaceutical unit), 10 May 2012.

#9 Former official, DG Enterprise (Pharmaceutical unit), 28 May 2012.

#10 Policy Officer, industry organization, 13 March 2013.

#11 Policy Officer, public health organization, 21 March 2013.

#12 Policy Officer, public health organization, 18 April 2013.

#13 Policy Officer, industry organization, 8 May 2013.

#14 Policy Officer, public health organization, 8 May 2013.

#15 Official, DG SANCO, 22 May 2013.

#16 Official, EMA, 24 May 2013.

#17 Management Board Member, EMA, 28 April 2013.

#18 Scientific Committee Member, EMA, 29 April 2013.

Acknowledgements

For helpful comments and suggestions the author would like to thank two anonymous reviewers, participants at the panel ‘Parliamentary and Executive Politics' at the ECPR Graduate Conference, Bremen 2012, and participants at the workshop ‘The Transformation of the Executive Branch of Government in Europe', University of Oslo, 2012. The author would also like to thank Morten Egeberg, Jarle Trondal, Tom Christensen, Johanne Døhlie Saltnes, Mathias Johannessen, Anne Elizabeth Stie and Guri Rosén for valuable comments.

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