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EU court quashes German prescription drug price floor
October 19, 2016 / 10:00 AM / 10 months ago

EU court quashes German prescription drug price floor

BERLIN/DUESSELDORF (Reuters) - Europe's highest court has ruled Germany's floor on retail prescription drug prices violates free trade in the single market, potentially opening the door to competition from foreign mail-order outlets.

Patients covered by Germany's statutory medical insurers pay a certain proportion of drug expenses from their own pockets, and Dutch-based mail-order pharmacies have in the past offered to return some of that money, using their non-German domicile to get around 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's strict rules on prices as well as wholesale and retail margins for prescription drugs aim to ensure that brick-and-mortar pharmacies stay in business in rural areas, keeping essential drugs available across the country.

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.

Dutch online pharmacy DocMorris called it "a good day for patients" but German pharmaceutical wholesale group Sanacorp and the Federal Union of German Associations of Pharmacists, ABDA, condemned the decision.

A Sanacorp spokesman said it would lead to unfairness in how domestic and foreign pharmacies were treated and put patients without Internet access at a disadvantage. "Granny Erna will have to pick up the tab at the end of the day," he said.

An ABDA spokesman said: "It can't be that foreign suppliers cherry-pick and we get the leftovers in the regions. That would be an unfortunate situation."

A spokeswoman for drugmaker Bayer said the company was curious to see how German lawmakers would react.

The German health ministry said it would examine the ruling and its consequences, while a spokesman for Angela Merkel's Christian Democrat parliamentary group said it would be worth considering a ban on the mail-order sale of German medicines.

Germany has a fragmented pharmacy market, with ownership of pharmacies restricted to certified dispensing chemists and the number of outlets in a drug retail chain limited to four.

Reporting by Maria Sheahan, Hans-Edzard Busemann, Reinhard Becker, Anneli Palmen and Alexander Huebner; Writing by Maria Sheahan and Georgina Prodhan; Editing by Tom Heneghan

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