No sanctions against EU mail-order pharmacies
The German National Association of Statutory Health Insurance Funds (GKV-Spitzenverband) will not sanction foreign mail-order pharmacies that offer bonuses to their customers. Such a step would go against the ECJ’s goal of ensuring competition between mail-order and retail pharmacies.
IW – 03/2017
In October 2016, the European Court of Justice in Luxembourg ruled that a ban on foreign pharmacies offering customers bonuses is discriminatory and not in line with European regulations on the free movement of goods. According to the ECJ, foreign mail-order pharmacies rely on price competition far more than domestic retail pharmacies do. Thus, foreign pharmacies may continue to offer rebates on prescription medicines to customers in Germany. The situation is different for pharmacies based in Germany.
The unequal treatment of German and foreign pharmacies resulting from the judgement has meant that the Framework Agreement based on Section 129 of the German Social Code (Book V) has taken on an important role in political discussion. The Agreement between the GKV-Spitzenverband and the German Pharmacists' Association (DAV) regulates the exact procedures for supplying pharmaceuticals and billing between pharmacies and the health insurance funds. Following the ECJ ruling, various experts from the pharmacies’ side called for foreign mail-order pharmacies to be excluded from the Framework Agreement. They are of the opinion that these pharmacies violate the Agreement by offering bonuses.
Following a legal review, the GKV-Spitzenverband decided several weeks ago to apply the Framework Agreement in order to meet European compliance with the ECJ ruling. Therefore, there will be no sanctions against foreign mail-order pharmacies that offer bonuses to customers when purchasing prescription medicines. “Precisely because the ECJ has specified that bonuses are virtually the only tool that foreign mail-order pharmacies can use to compete with retail pharmacies in Germany, we see no basis for sanctions. Quite on the contrary, such a move would go against the ECJ’s objective of ensuring competition between mail-order and retail pharmacies”, said Johann-Magnus von Stackelberg, Deputy Chairman of the GKV-Spitzenverband.
Given the rationale behind the ruling, the statutory health insurance funds believe it is prudent to clarify as soon as possible how German social law can be aligned with the decision of the ECJ. Only then could possible amendments to the Framework Agreement be discussed. Nevertheless, it is clear that completely banning mail-order companies in the digital age fails to meet the needs of consumers.
The ruling by the European Court of Justice came about because of a cooperative venture between the Deutsche Parkinson Vereinigung (German Parkinson’s Association) and a Dutch mail-order pharmacy which provided various bonuses to the Association’s members when purchasing prescription-only medicinal products for Parkinson’s disease (Case C-148/15). The Centre for Protection against Unfair Competition mounted a legal challenge to this. The Higher Regional Court in Düsseldorf, which was responsible for the main proceedings, referred the case to the ECJ.