E.U. Ruling

Guaranteed Pharmacy Margins Under Threat

ARCHIV - Medikamente liegen in den Regalen eines Kommissionierautomaten, am 29.04.2015 in einer Apotheke in Hamburg. Foto: Daniel Reinhardt/dpa (zur Berichterstattung über die juristische Klärung, ob die Preisbindung für verschreibungspflichtige Medikamente in Deutschland mit dem freien Warenverkehr vereinbar ist) +++(c) dpa - Bildfunk+++
Facing policy headaches, some of the good stuff?
  • Why it matters

    Why it matters

    Germany’s pharmacy industry has long relied on the state price-margin guarantee for profits as other areas of its business are open to intense competition.

  • Facts

    Facts

    • German 20,000 pharmacies are guaranteed a price-margin on all prescription drugs.
    • The European Court of Justice is now ruling on whether the guarantee must be upheld by foreign countries with German customers.
    • It is widely expected to ban the guarantee, opening up opportunities for Germany’s mail-order pharmacies.
  • Audio

    Audio

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Germany’s 20,000 pharmacies are used to being given the occasional health policy headache by the government in Berlin. But up to now they were always able to rely on one banker: fixed trading margins for prescription drugs.

These work in a similar way to fixed prices in book retailing, and have long been relied on by the pharmacy sector, which otherwise only has to worry about competition on non-prescription drugs and non-medicinal products.

But that could soon change. In September the European Court of Justice will announce its decision on whether the ban on discounts to protect the state-price guarantee is compatible with E.U. law, in so far as it affects foreign mail-order companies.

In the dock is the mail-order pharmacy Doc Morris. It is facing the case because it pays E.U. patients with Parkinson’s disease a bonus if they send their prescriptions to its base in the Netherlands instead of collecting them in a local pharmacy.

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