European Court Rules Rx Bonuses Are Not Considered Advertising

The Court of Justice of the European Union (CJEU) has ruled that EU member states may permit promotional activities involving prescription medications, such as discounts or fixed monetary incentives. However, it clarified that such actions can still be prohibited under national price regulations.

In Germany, the prohibition on bonuses for prescription medications is enshrined in the Social Code Book V. The CJEU did not elaborate on this specific regulation. The case arose from actions taken against the Dutch online pharmacy Doc Morris, which had launched various rebate campaigns since 2012. These campaigns included direct incentives for redeeming prescriptions and vouchers for subsequent purchases of non-prescription products.

The North Rhine Pharmacists' Chamber contested these promotions, leading to several interim injunctions issued by the Cologne District Court. However, as most of these injunctions were later lifted, Doc Morris is now seeking approximately EUR18.5 million in damages, arguing that the injunctions were unjustified from the outset.

The Federal Court of Justice (BGH) referred questions to the CJEU to determine whether Rx bonuses could be classified as unfair advertising, thus potentially violating Directive 2001/83, which establishes a Community code for medicinal products for human use. While this directive generally prohibits advertising for prescription drugs, the CJEU asserted that not every promotional activity automatically falls under its scope. The CJEU stated that any promotional effort must be aimed at encouraging the prescription, dispensing, sale, or consumption of medicinal products.

According to the CJEU, offering discounts or fixed monetary payments when redeeming prescriptions does not constitute such promotion. Instead, these activities merely influence the choice of pharmacy for the consumer and do not promote the utilization of the medications themselves. As a result, member states may allow such rebate activities without violating the directive.

Nevertheless, the court indicated that promotional activities could be restricted if the exact amount of the incentive is not clearly disclosed to the consumer beforehand. Such restrictions aim to prevent consumers from overestimating the value of the incentives offered.