OLG Brandenburg: Infringement of the price fixing for prescription-only medicinal products through granting cash discount for prompt payment

Co-Author: Cao, My Anh

The decision of the Higher Regional Court of Brandenburg (Oberlandesgericht Brandenburg – OLG Brandenburg) of 6 June 2023 (Ref.: 6 U 86/21) deals with the distribution of prescription medicinal products by a pharmaceutical company to pharmacies where cash discounts were granted as remuneration for an upfront payment.

The plaintiff is a competition organization, the defendant a parallel and re-importer of medicinal products, selling high-priced medicinal products in Germany by way of direct sales to pharmacies. The subject matter of the dispute is a price list maintained by the defendant as of 15 July 2019, in which pharmacies are generally granted a payment period of 30 days for the prices indicated for the respective medicinal product. The price list contains a column with “14 days value date”, below which is an amount charged by the defendant for early payment within 14 days. The pharmacy purchase price, which also appears in the list, reflects the maximum permissible price for the sale of ready-to-use medicinal products to pharmacies according to Sec. 2 para. 1 of the German Pharmaceutical Price Ordinance (Arzneimittelpreisverordnung – AMPreisV). The amount “14 days value date” is lower than the pharmacy purchase price and the regular price charged to pharmacists, as the defendant grants a cash discount of 3% hereto. The plaintiff was of the opinion that the pricing was not compatible with the provisions of the German Medicinal Products Act (Arzneimittelgesetz – AMG) or the AMPreisV. In support of this, the plaintiff argued that the discounted price fell short of the amount to be charged according to Sec. 2 para. 1 sentence 1 half-sentence 1 AMPreisV, which is composed of the pharmaceutical entrepreneur's sales price plus a fixed surcharge of 70 cents (according to the version of the AMPreisV at that time) as well as an optional surcharge of 3.15% and VAT. The amount to be charged within the meaning of Sec. 2 para. 1 sentence 1 half-sentence 1 AMPreisV represents an absolute lower price limit and may not be undercut by discounts, rebates or other price reductions. Since the medicinal product was a prescription-only medicinal product, it was subject to the pharmaceutical price fixing.

The OLG Brandenburg ruled that advertising, announcing or granting prices that lead to prices below the AMPreisV prices by granting discounts was prohibited when dispensing prescription-only medicinal products to pharmacies. This was a violation of Sec. 78 AMG and Sec. 2 para. 1 AMPreisV. The wording of Sec. 2 para. 1 AMPreisV does not explicitly mention discounts, but the wording “are...to be charged” does not allow for an exception. According to the meaning and purpose of the provision, the granting of a discount did not allow the price limit to be undercut. Sec. 2 para. 1 sentence 1 AMPreisV is intended to guarantee a functioning wholesale trade, which is to ensure a nationwide and uniform supply of medicinal products to the population in the public interest. Since the fixed surcharge is intended to ensure the functioning of the wholesale trade in medicinal products and does not constitute remuneration for the medicinal product, it cannot be the subject of a discount for early payment. The same applies to the minimum price of the pharmaceutical entrepreneur, which is composed of the fixed surcharge and the sales price pursuant to Sect. 2 para. 1 sentence 1 half-sentence 1 AMPreisV.

Although it can be argued that cash discounts for prompt payment usually only represent a consideration for a particularly quick payment, and the Federal Supreme Court (Bundesgerichtshof – BGH) has not yet ruled on the admissibility of such discounts under the law of advertising for medicinal products, it is advisable to follow the case law of the OLG Brandenburg, especially since the Higher Regional Court of Bamberg has already ruled in a similar way (cf. judgement of 29 June 2016, ref. 3 U 216/15).