Prohibited advertising – No bread roll vouchers at pharmacy

Prohibited advertising – No bread roll vouchers at pharmacy

Pharmacies are bound by a uniform sales price for prescription medications. Even small additions to the price of medicinal products can constitute a violation of competition law.

Consumers may well think receiving vouchers for the bakery at the pharmacy is a nice idea, but it is problematic from a legal perspective. This is because the price markup constitutes a violation of the Heilmittelwerbegesetz (HWG), Germany”s act regulating the advertising of medicinal products. We at the commercial law firm GRP Rainer Rechtsanwälte note that pharmacies are therefore not permitted to engage in this kind of advertising.

One pharmacy came up with the idea when handing over fixed-price prescription medication of giving its customers a so-called “Brötchen-Gutschein” (bread roll voucher) for a nearby bakery to take with them without being asked. This brought it trouble. An industrial interest group considered this to be an infringement of the rules on price fixing for medicinal products and sought an injunction. The Landgericht Darmstadt (Regional Court of Darmstadt) granted the action. The pharmacy”s appeal before the Oberlandesgericht Frankfurt (Higher Regional Court of Frankfurt) was unsuccessful (Az.: 6 U 164/17).

In its judgment of November 2, 2017, the OLG held that a uniform price applies to the sale of prescription medications in pharmacies. It stated that this rule is supposed to regulate price competition among pharmacies. The Court noted that this rule could be said to have been violated if a pharmacy sells a medicinal product at the prescribed price but also throws in a voucher. This was said to represent an economic advantage to customers, as especially when the price of medicinal products is identical across all pharmacies even a small contribution of little value could motivate consumers to purchase their medications at the pharmacy offering the perks. It went on to say that price fixing for prescription medications is meant to prevent a ruinous price war among pharmacies and ensure an equitable supply of medicinal products to consumers across the board.

The OLG nonetheless granted leave to appeal with respect to the issue of domestic discrimination. The background to this is that foreign mail-order pharmacies are allowed to sell prescription medicinal products in Germany without price fixing. Should foreign mail-order pharmacies” market share increase to such an extent that the existence of brick-and-mortar pharmacies in Germany is threatened, the rules on price fixing for medicinal products could prove worrisome.

Violations of competition law can give rise to formal warnings, damages claims and injunction suits. Lawyers who are experienced in the field of competition law can assist businesses in fending off or enforcing claims arising from violations of competition law.

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