The EC is unlikely to take action against Germany.

The prospect is that infringement procedure No. 2013/4075 will end soon. If the EC follows a recommendation made by its departments, it will use its discretionary powers in the proceedings against Germany and it will not refer the matter to the ECJ (European Court of Justice). The subject matter of the dispute is the uniform pharmacy selling prices for prescription medicines, which also apply in Germany to foreign mail-order pharmacies.

The new pharmacy law keeps to uniform prices

After the ECJ had already ruled in their decision of October 19, 2016 (C-148/15) that tying foreign mail-order pharmacies to uniform selling prices in Germany violates European law, German politicians were looking for a way to protect their local pharmacies. The solution they found was to move the uniform price specification out of the Pharmaceuticals Act and into Social Insurance Code book V. This is what happened with the act for supporting local pharmacies. This manoeuvre also caused problems for the Federal Ministry of Justice which is why the draft law that came into force on 15th December last year, was submitted to Brussels for study (see News 08/2019).

Brussels has responded. A letter sent on 8th July this year by the Directorate General for the Internal Market, Industry, Entrepreneurship and SMEs to the online pharmacies involved, notified them that it intends to discontinue the proceedings against Germany. The presentation of its legal opinion and request to the Federal Republic of Germany on 7th March 2019 for Germany to comment on the matter is not going to be followed by any further steps at this moment. This was preceded by numerous visits to the EC made by the top people from the Federal Ministry of Health between August 2019 and August 2020.  On 11th September 2020, 14 months after the cabinet decision, the German parliament was able to deal with the draft in its first reading.

Germany's reasoning is not convincing ...

The reasoning by the EC's departments is insightful. Their position is that the ban on bonuses for prescription-only finished medicinal products is to be regarded in the same way as a quantitative import restriction and that this is therefore contrary to EU law is upheld. The references made by the German legislator to the financial equilibrium and protection of the statutory health insurance system are not being complied with.

... but there are "opportunistic reasons"

However, they are surprisingly jumping to the federal government's side with their new reasoning: Germany is deeply involved in creating an e-prescription infrastructure by 2022. The coronavirus pandemic has shown how important this is. A dispute over the national pricing policy would not be conducive to this important switchover process. A stable legal framework is needed right now. What will happen when the digitisation process in Germany has progressed remains to be seen.

The EC has a margin of discretion as to whether and when it should initiate infringement proceedings or refer a case to the ECJ. A discretion that it can use strategically. In the present case, it is proposed that the Commissioners close the case for "opportunistic reasons". Unless the complaining online pharmacies come up with additional reasons or information.

That isn’t the end of it

So for now: If the EC follows the recommendation made by the DG GROW, then the all-clear can be given for German pharmacies. But will it last? The EC’s departments intend to continue monitoring the pharmacy market situation in Germany. Naturally, the appraisal made by national courts remains unaffected. The Dutch mail order pharmacies, which are the ones that are mainly affected, could well consider going there. The recommendation made by the EC's departments is a huge setback for them. Nor does it take up the cudgels for an economical and up-to-date supply of medicines.