EU court quashes German
prescription drug price floor
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[October 19, 2016]
FRANKFURT (Reuters) - 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
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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.
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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.
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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)
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