Do discount campaigns on prescription-only medicines (POMs) run by mail order pharmacies lure patients into consuming medicinal products?

Advocate General Szpunar has opined that they do not. The opinion comes in the latest of a stream of cases on advertising practices involving DocMorris (Case C-517/23), a Dutch mail-order pharmacy that supplies medicines to end customers in Germany. The AG concluded that the discount campaigns regarding POMs do not fall within the definition of “advertising of medicinal products” (Article 86(1) Directive 2001/83) as the discount is implemented at the point of purchase of the POM.  The decision of which product to prescribe has already been taken by a doctor and all the patient is left to do is choose the dispensing pharmacy. As such, the purpose of the discount campaign is not to encourage patients to purchase medicinal products. Rather, it is simply to attract them to a specific pharmacy.

Facts of the case

DocMorris had run various discount campaigns whereby, upon purchasing POMs, customers were offered: (i) a benefit in the form of either an immediate cash discount; (ii) a voucher for a certain sum of money; or (iii) a percentage reduction on future purchases of other products from DocMorris including non-prescription medicinal products or health or beauty products (collectively, Discount Campaigns).

Apothekerkammer Nordrhein (AN), the representative body for pharmacists in the North Rhine area in Germany, considered that the Discount Campaigns constituted an infringement of the system of fixed prices for POMs under national law and sought multiple interlocutory injunctions against DocMorris, which were duly enforced but later annulled.

DocMorris claimed compensation from AN on the grounds that the interlocutory injunctions were unjustified from the outset. The Regional Court dismissed the action but DocMorris appealed to the Bundesgerichtshof (Federal Court of Justice), which referred the following questions to the CJEU for a preliminary ruling:

  • (1) Does advertising for the purchase of POMs from the entire range of products of a pharmacy fall within the scope of the rules on the advertising of medicinal products in Directive 2001/83 (Titles VIII and VIIIa, Articles 86 to 100)?
  • (2) If Question 1 is to be answered in the affirmative, is it consistent with the provisions of Title VIII of Directive 2001/83, in particular Article 87(3), if a national rule is interpreted as prohibiting the advertising of the entire range of POMs of a mail-order pharmacy established in another Member State using promotional gifts in the form of vouchers for a monetary amount or a percentage discount for subsequent purchases of other products?
  • (3) Furthermore, if Question 1 is to be answered in the affirmative, is it consistent with the provisions of Title VIII of Directive 2001/83, in particular Article 87(3), if a national rule is interpreted as permitting the advertising of the entire range of POMs of a mail-order pharmacy established in another Member State using promotional gifts in the form of immediately effective price reductions and payments?’

EU legislative framework

The definition of advertising of medicinal products is set out in Article 86(1) of Directive 2001/83/EC. The definition is broad and includes any form of inducement designed to promote the prescription, supply, sale, or consumption of medicinal products. Article 88(1)-(3) of the directive provides that Member States shall prohibit the advertising of POMs to the public.

AG Opinion

AG Szpunar noted that facts of the case engaged two complementary lines of case-law: (a) the free movement of goods and services under the Treaty on the Functioning of the European Union (TFEU) as DocMorris was based in the Netherlands but servicing customers in Germany; and (b) the meaning of advertising of medicinal products under Directive 2001/83/EC.

(a) Freedom of movement

Deutsche Parkinson Vereinigung eV v Zentrale zur Bekämpfung unlauteren Wettbewerbs eV. (Case C-148/15)

In this case, the Court considered the question of whether the prohibition, under German national law, of a rebate system whereby various bonuses would be provided to patients when purchasing POMs for Parkinson’s disease from DocMorris was contrary to the fundamental freedom of free movement of goods under Articles 34 and 36 TFEU.

The Court found the measure in question did effectively amount to a quantitative restriction under Article 34 TFEU, which could not be justified under Article 36 TFEU. Crucially, the Court held, among other factors, that price competition by a mail-order pharmacy could be capable of benefiting the patient in so far as it would allow for POMs to be offered in Germany at a more attractive price.

(b) Advertising under Directive 2001/83

A (Advertising and sale of medicinal products online) v Daniel B, UD, AFP, B, L (Case C-649/18)

This case concerned the activity of a pharmacy carrying out a wide-ranging and multifaceted advertising campaign for online services of non-prescription medicinal products, and significantly, in this case, the company was selling to customers cross border i.e. in another Member State. The Court noted that titles VIII and VIIIa (‘Advertising’ and ‘Information and Advertising’) of Directive 2001/83 are intended to regulate the content of the advertising message and the manner of advertising for particular medicinal products, but do not govern advertising of online sales services relating to medicinal products.

DocMorris v Apothekerkammer Nordrhein (Case C-190/20)

In another DocMorris case, this time in relation to a “prize draw” that enabled participants to win everyday items other than medicinal products, the Court held that the advertising campaign sought to influence the customer’s choice of pharmacy, rather than their choice of a given medicinal product. Participation in the prize draw was subject to making an order for a POM. Noting that the patient had already received their prescription for the medicinal product, the decision as to which pharmacy to buy from was separate, later decision. As a result, the Court found the advertising campaign did not fall within the scope of application of Title VIII (‘Advertising’) of Directive 2001/83.

 EUROAPTIEKA (Case C-530/20)

Finally, the case of EUROAPTIEKA concerned a promotional offer for a 15% reduction on the purchase price of any medicinal product where at least three products were purchased. The Court held that such a practice comes within the concept of ‘advertising of medicinal products’ within the meaning of Article 86(1) of Directive 2001/83. The Court stressed that this was so even where the information in question does not refer to a specific medicinal product, but rather to unspecified medicinal products. The key factor in this case was that the promotion was intended to influence the customer’s decision to buy the POM, rather than their choice of pharmacy.

The AG concluded that two essential points can be inferred from the case law on Directive 2001/83. First, the concept of advertising is not limited to specific medicinal products. As such, the fact that the present case relates to all POMs from DocMorris’s product range does not prevent the directive being applicable. Secondly, it must be examined whether the advertising at issue encourages the purchase of POMs or just influences the later decision of choice of pharmacy.

EU case law has consistently held that it is the purpose of the message that constitutes the fundamental defining characteristic of advertising within the meaning of Article 86(1) of Directive 2001/83. The purpose of DocMorris’s message is ‘come to us’ instead of ‘buy these (specified or unspecified) medicinal products.’

Regarding immediate rebates, crucially, the patient already knows what to buy as the product has been prescribed by a doctor. Once a patient receives a prescription, the only parameter left for the patient to decide is which pharmacy to procure the product from. Everything else: product, dose, intervals at which to take the medicine, has been decided by a doctor.

The same applies for future rebates as above for immediate rebates, plus there is no focus on persuading the patient to buy a certain number of medicinal products. In fact, the offer at issue also applied to health and beauty products. This is markedly different to EUROAPTIEKA where at least three medicinal products had to be purchased to receive the 15% discount. That offer unequivocally persuaded a customer to buy more of an (unspecified) medicinal product.

The AG noted that the overriding purpose of the Discount Campaigns was to persuade patients to choose DocMorris, over another pharmacy; their purpose was not to persuade patients to consume more medicinal products than they would have otherwise.

In light of the conclusion that the activity did not fall within the scope of Article 86(1), the AG noted that prohibiting the Discount Campaigns in this case, via implementation of injunctions, would have equivalent effect to a quantitative restriction under Article 34 TFEU. Crucially, as in the judgment in Deutsche Parkinson Vereinigung, the advertising in question in the present case did not constitute a selling arrangement, as the prohibition impeded the German customer’s access to pharmaceutical products lawfully marketed in other Member States.

Given that the first question was answered in the negative, it follows that there was no need to answer the second two questions. However, AG Szpunar noted that should the Court reach a different conclusion in respect of the first question, i.e. that the Discount Campaigns did fall within the definition of Article 86(1), then Article 88(1)(a) of Directive 2001/83 must be interpreted as precluding the Discount Campaigns.

It remains to be seen if the Court agrees with the AG or has other ideas.