Vouchers and Discounts for Medicinal Products

Our Life Sciences Regulatory team explores a recent CJEU decision that draws a clearer line between permissible pharmacy promotions and prohibited advertising of medicinal products. The judgment distinguishes between two types of incentives: those that influence a consumer’s choice of pharmacy, and those that may encourage the excessive use of non-prescription medicines. It also considers how to balance public health protection with the free movement of goods within the EU.

What you need to know

• Advertising under Directive 2001/83/EC includes promotions intended to encourage the sale or consumption of medicinal products, even if unspecified.
• Campaigns offering rewards for submitting prescriptions were deemed to influence pharmacy choice, not advertise medicinal products themselves.
• National prohibitions on monetary rewards for prescriptions can be justified for consumer protection, despite possibly restricting free movement.
• Voucher promotions for non-prescription medicines can be prohibited to prevent irrational or excessive use.

Background

A recent CJEU decision originates from a dispute in Germany between the Dutch mail-order pharmacy, DocMorris, and the Professional Association of Pharmacists of the North Rhine (the Association). The Association challenged DocMorris's advertising campaigns, arguing they violated national laws concerning the advertising of medicinal products. While the Association initially secured injunctions, these were later revoked following the Deutsche Parkinson Vereinigung[1] case. DocMorris then sued the Association for damages and was successful on appeal. The German Federal Court found some advertising campaigns to be unlawful. However, they also referred questions to the Court of Justice of the European Union (the CJEU). These questions concerned Directive 2001/83/EC (the Directive) and the ‘advertising of medicinal products’ within it.

The CJEU was asked to consider two main questions:

1. Does advertising for the purchase of prescription medicinal products from a pharmacy's entire range fall under the scope of the Directive's rules on advertising medicinal products?
2. If so, does EU law prohibit advertising that promotes unspecified prescription medicines through vouchers for monetary amounts or percentage discounts for future purchases?

The first question

The CJEU examined Article 86(1) of the Directive. The Court held that any advertisement designed to promote the prescription, supply, sale, or consumption of medicinal products constitutes advertising under the Directive. This applies regardless of whether the specific medicinal products are identified.

The CJEU distinguished between two types of advertising campaigns in this case:

• Campaigns intended to promote the prescription, supply, sale, or consumption of medicinal products, even if unspecified. The Court found the following DocMorris campaigns fell into this category:
  • A referral scheme offering existing customers rewards like hotel vouchers or discounted automobile club membership if a friend submitted a prescription. The friend also received a voucher for non-prescription medicines.
  • A campaign providing customers with a €10 voucher for future purchases of non-prescription medicines or health/care products.

The Court reasoned these promotions encouraged the sale and consumption of non-prescription medicines by offering an economic advantage.

• Campaigns intended only to influence the choice of pharmacy for purchasing prescription-only medicinal products. The Court determined the following campaigns belonged to this category:
  • Offering customers a cash reward, between €2.50 to €20, for submitting a prescription and undergoing a medication check.
  • Advertising price reductions on prescription medications upon submission of a prescription.

The Court found that these campaigns were intended to steer consumers toward choosing DocMorris over other pharmacies for their prescription-only medicines, rather than to promote the medicines themselves or other medicinal products. The CJEU therefore concluded that this was not advertising of a medicinal product.

Therefore, the Court concluded that the concept of ‘advertising of medicinal products’ in Article 86(1) of Directive does not include advertising measures offering price reductions and payments for the purchase of unspecified prescription-only medicinal products. However, it does include measures that offer promotional gifts in the form of vouchers for subsequent purchases of non-prescription medicinal products.

The Court also considered whether a national prohibition on advertising campaigns offering monetary rewards for medicinal products could restrict the free movement of goods and access to the Union market. Focusing on the €2.50 to €20 reward campaign, the Court found that the relevant German legislation had an effect equivalent to quantitative trade restrictions prohibited under Article 34 TFEU. This was because, while applicable to all pharmacies, it disproportionately affected mail-order pharmacies from other Member States, for whom price competition was more critical than traditional pharmacies.

However, the CJEU found that this prohibition could be justified as proportionate and necessary to protect consumers by preventing undue influence from potentially overestimated rewards. This was especially important given the lack of a clear method for calculating the reward range. Similarly, the prohibition was seen as a justifiable restriction in the interest of consumer protection under the E-Commerce Directive 2000/31. Therefore, the Court concluded that Article 34 TFEU and Directive 2000/31 did not prevent the national legislation from applying.

Second question

While the promotions involving vouchers for non-prescription medicines were linked to the submission of a prescription, the Court found they primarily promoted the use of non-prescription products. As a result, they were not prohibited by Article 88(1)(a) of the Directive, which concerns advertising prescription medications.

However, by referencing Article 87(3) of the Directive and the Euroaptieka decision[2], the Court highlighted the ongoing duty of Member States to prohibit advertising that promotes the irrational or excessive use of non-prescription medicinal products or presents them inaccurately. Applying this, the Court found that the voucher promotions could distract consumers from objectively assessing their need for non-prescription medicines, potentially encouraging irrational and excessive use due to the reduced prices.

Consequently, the CJEU concluded that Article 87(3) of the Directive does not prevent national legislation from banning advertising measures that promote the purchase of unspecified prescription-only medicinal products. This includes offers of promotional gifts, like vouchers for subsequent purchases of other products, such as non-prescription medicinal products.

Conclusion

The CJEU’s decision in this case illustrates the nuances of Directive 2001/83/EC when considering advertising medicinal products. It also highlights the fine line to be observed by traders. In addition, this decision demonstrates the balance to be struck between the free movement of goods and trade between Member States and the interests of national legislatures to enact measures for the protection of public health.

For more information and expert advice, contact a member of our Life Sciences Regulatory team.

People also ask

The content of this article is provided for information purposes only and does not constitute legal or other advice.

[1] (C-148/15, EU:C:2016:776)

[2] (C‑530/20, EU:C:2022:1014)