09. Nov 17

Pharmacies not allowed to offer promotional gifts in the case of fixed-price pharmaceuticals

Pharmacies are not allowed to offer their customers promotional gifts when the latter are purchasing prescription medicinal products. That was the verdict of the Oberverwaltungsgericht (OVG) NRW, North Rhine-Westphalia’s Higher Administrative Court, in two rulings from September 8, 2017.

Consumers in Germany are accustomed to prescription pharmaceuticals being the same price in every pharmacy. We at the commercial law firm GRP Rainer Rechtsanwälte note that German pharmacies are not allowed to deviate from this pharmaceutical pricing regulation and therefore cannot grant price reductions or discounts in the case of prescription or other fixed-price medicinal products or promote these products on this basis. Moreover, the uniform selling price cannot be circumvented by having the customers receive vouchers or other material assets when purchasing medications. That was he verdict of the Oberverwaltungsgericht NRW in two judgments from September 8, 2017 (Az.: 13 A 2979/15 and 13 A 3027/15).

Both rulings stem from the following set of facts: Two pharmacists had promoted vouchers that could be redeemed by submitting a prescription. After presenting the voucher, the customers would receive a pair of cosy socks or wrapping paper. The competent pharmaceutical society viewed this as a violation of the pricing controls for prescription medicinal products and prohibited these types of vouchers from being issued. The legal action brought by the pharmacists against this decision was unsuccessful.

The OVG held that the promised non-cash benefits such as the cosy socks and wrapping paper gave consumers the impression that the medication was cheaper in these pharmacies than in others. This was a violation of the pharmaceutical pricing regulation, as customers were receiving everyday goods for redeeming the voucher. The Court went on to say that the fact that these were material assets of little value was insignificant, because no de minimis limit applies to the price controls.

The OVG also noted that a ruling of the Court of Justice of the European Union finding that these price-fixing regulations do not apply to foreign mail-order pharmacies does not affect the price controls. The Court clarified that this competitive advantage that foreign mail-order pharmacies have has yet to seriously impact domestic pharmacies negatively.

There is often a fine line that needs to be tread when it comes to advertising for pharmacies as well as other health organisations. Violations of competition law can be met with severe penalties. Lawyers who are experienced in the field of industrial property can offer advice and take appropriate legal measures in the event of violations.

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