FRANKFURT Oct 19 Europe's highest court has
ruled that a floor on retail prices for prescription drugs in
Germany violates free trade in Europe's single market,
potentially opening the door for foreign mail-order pharmacies
to undercut German rivals
Patients covered by Germany's statutory medical insurers
have to pay a certain proportion of drug expenses from their own
pockets, though Dutch-based mail-order pharmacies have in the
past offered to return some of that money, using their
non-German domicile to circumvent minimum prices.
Such offers were mainly used by chronically ill patients --
and fiercely attacked by Germany's powerful pharmacy lobby --
until the practice was blocked by Germany's highest court in
2014 after years of legal wrangling.
Germany has strict rules on prices as well as wholesale and
retail margins for prescription drugs to ensure that small
bricks-and-mortar pharmacies are not pushed out of the market by
bigger rivals, keeping essential drugs available across the
country, even in rural areas.
In Wednesday's ruling, however, the European Court of
Justice said that it was not convinced that setting fixed prices
served that purpose.
On the contrary, it said that price competition may be more
likely to encourage the addition of new pharmacies in regions
where there are few of them.
Germany has a fragmented pharmacy market with ownership of
pharmacies is restricted to certified dispensing chemists and
the number of outlets in a drug retail chain is limited to four.
(Reporting by Maria Sheahan; Editing by David Goodman)