German medicine price-fixing breaks EU law, court rules

Germany's system of setting fixed prices for prescription-only medication is in breach of EU law, the bloc's top court ruled Wednesday, arguing that it restricts the free movement of goods.

Cross-border market access is one of the fundamental values enshrined in EU law. The provision of prescription drugs is strictly regulated in Germany, where pharmacies tend to have a uniform appearance.

The ruling was brought in a case relating to drugs prescribed for the treatment of Parkinson's disease. A German self-help organization had teamed up with a Dutch mail-order pharmacy to provide patients with discounts on their medication.

This was challenged by Germany's Centre for Protection against Unfair Competition, in a case that was ultimately referred to the European Court of Justice.

The Luxembourg-based court found that Germany's fixed-price system for prescription drugs "constitutes an unjustified restriction of the free movement of goods" as it could hinder access to the German market for suppliers from other member states.

The judges rejected the argument that fixed prices ensure a better geographic distribution of pharmacies. To the contrary, they said, allowing chemists to set their own prices would let them charge a premium for setting up shop in remote areas.

Removing the fixed-price system could also lead to lower costs for patients and encourage pharmacies to compete on service, the court found.

The Federal Union of German Associations of Pharmacists criticized the ruling.

"It is unthinkable that unbridled market forces can triumph over consumer protection in health care," said Friedemann Schmidt of the pharmacy organization. "A possible solution would be a ban on mail-order sales of prescription drugs in Germany," he added.

The case has been referred back to the German court, which must reach a final ruling, taking into account the verdict out of Luxembourg.

Last update: Wed, 19/10/2016 - 12:39

More from Europe

One dead after central Italy hit by series of quakes

One person was killed on Wednesday when a building collapsed during four powerful quakes that shook central Italy on...

Boris Johnson compares French president to WWII prison guard

British Foreign Secretary Boris Johnson on Wednesday compared Francois Hollande to a World War II prison guard after...

Merkel pledges to hold Europe together after Brexit

German Chancellor Angela Merkel pledged on Wednesday to hold the European Union together after Britain's planned...

Slovenia looks to capitalize on its connection to Melania Trump

As Donald Trump campaigned for the Oval Office, his Slovenian-born wife Melania did not receive much love and...

EC recommends Croatia's gradual integration into Schengen Information System

The European Commission on Wednesday made a recommendation to the Council of the European Union to gradually...