In a judgment dated 19 October 2016 (case C-148/15; ECLI:EU: C:2016:776), the European Court of Justice has ruled that a German law imposing fixed prices for the sale of prescription medicines through pharmacies infringes EU law.

For the benefit of its members, the German association for Parkinson's disease patients had agreed on a bonus scheme for the purchase of prescription medices to combat Parkinson’s with the Dutch Internet pharmacy DocMorris. The ZBUW, an interest group for businesses with the aim of combatting unfair competition, brought a legal action against the association claiming that the agreed bonus scheme infringed a German law which imposes fixed prices for prescription medicines sold through pharmacies. The ZBUW demanded a discontinuation of the supplies by DocMorris to the association’s members.

A lower German court (the Düsseldorf Landesgericht) upheld the action. On appeal, the Düsseldorf Oberlandesgericht decided to request a ruling from the Court of Justice on whether the system of statutory fixed prices was in line with the European principle of free movement of goods. The Court ruled that this is not the case. The Court concluded that the ban was more restrictive for pharmacies not established in Germany (such as DocMorris) than for German pharmacies, where it came to their ability to sell medicines to German customers.

The German Government however argued that the ban was necessary to protect public health. It contended that if internet pharmacies were allowed to undercut brick-and-mortar pharmacies’ prices, pharmacies in sparsely populated rural areas could be driven off the market. This in turn would endanger high-quality supplies of medicines in cases of emergency, as well as proper advise on drug use to consumers. However, the Court ruled that the German government had not provided sufficient evidence that this could be a genuine risk, nor had it demonstrated that the contested legislation constituted an adequate means to mitigate this risk.

The above implies that the system of fixed prices for prescription medicines in Germany may no longer be upheld. This development appears to create opportunities for internet pharmacies from other EU member states to increase their deliveries to German consumers. It however remains to be seen whether the German government will leave it at this. According to reports in the media, both politicians from the ruling CDU party as well as the German pharmacists’ association ABDA call for reparatory legislation in the form of a total ban on distance sales of prescription medicines. It appears to follow form an earlier judgment of the Court from 2003, that such a ban may be allowed under European law (case C-322/01 Verband Deutscher Apotheken, ECLI: EU: C: 2003: 664).