Karlsruhe Higher Regional Court considers the granting of valuable bonus points for the pre-ordering of prescription medicines using smartphone app

Co-Author: Cao, My Anh

A recent decision of the Karlsruhe Higher Regional Court dated 12 October 2022 (Ref.: 6 U 108/21) has affirmed the inadmissibility of receiving bonus points when pre-ordering prescription, price-linked medicines using a smartphone app, where customers receive bonus points with a small monetary value if they pick up the medicine at one of the participating retailers.

The plaintiff in the case is the Wettbewerbszentrale or German Centre for Protection against Unfair Competition whilst the defendant is a pharmaceutical wholesaler that supplies pharmacies with medicines and offers products and services in the health sector. In addition, the defendant provided a smartphone app through a provider of a bonus points programme, where customers were credited bonus points, equating to a small monetary value, to an account every time they made a purchase at a participating retailer, including when they picked up a pre-ordered pharmaceutical product. The plaintiff asserted a violation of the law on advertising of medicinal products on the grounds that bonus points with an equivalent value of a small amount of money are an impermissible advertising gift with reference to a product. Although a prescribed price is set, the pre-ordering and collection of the medicinal product from the participating pharmacy grants the customer an economic advantage.

The Karlsruhe Higher Regional Court ruled on 12 October 2022 (Ref.: 6 U 108/21) that the granting of bonus points constituted an impermissible advertising gift under Section 7(1) sentence 1 no. 1 German Law on the Advertising of Medicinal Products. According to the court, the advertising was - contrary to the defendant’s opinion - product-related and not merely company and image-related. It was not apparent to which company the image and corporate advertising should refer. The customer was invited to redeem a prescription at any participating pharmacy, whereby the pre-order of a prescription medicine was rewarded with bonus points, which could neither constitute a general promotion of the services of the participating pharmacies nor a benefit for other business reasons.

Furthermore, the defendant had violated the price regulations under pharmaceutical law. The granting of bonus points for the purchase of a prescription-only medicinal product gives the customer an advantage which makes the purchase appear economically more favourable. Relevant consumers see the granting of bonus points as a monetary benefit or a gift and do not understand it as compensation for the effort involved in using the pre-order function of the app.

Insofar as prescription medicines are concerned, which are subject to price maintenance and a strict prohibition of donations (cf. Section 7 (1) sentence 1 no. 2 subsection (2) German Law on the Advertising of Medicinal Products), it is therefore inadmissible, according to the case law of the Karlsruhe Higher Regional Court, to grant bonus points with just a minor value. However, this does not apply to other remedies (in particular non-prescription medicinal products and medical devices). In other proceedings, the Regional Court of Hamburg assessed the factual and legal situation and decided to the contrary, finding that the defendant company merely referred to participation in a customer loyalty system and thus only to a general company-related advantage (judgement of 12 May 2021, ref. no. 312 O 306/19). However, according to the information available, an appeal is still pending before the Hanseatic Higher Regional Court of Hamburg (Ref.: 3 U 83/21).