On May 7, 2025, the Federal Court of Justice (BGH) held a hearing on the admissibility of so-called “Rx bonuses.” Specifically, the dispute concerned whether advertising and granting bonuses on prescription drugs (Rx drugs) violated German drug pricing regulations and whether these regulations were even applicable to mail-order pharmacies based in the EU.
The appeal proceedings were based on the following facts: The defendant, a mail-order pharmacy based in the Netherlands, dispensed prescription drugs to patients residing in Germany. The defendant advertised that patients would receive a bonus of €3.00 per drug when they filled a prescription, up to a total of €9.00 per prescription. Secondly, it advertised that patients would receive a bonus of up to €9.00 when they filled a prescription if they completed a “medication check,” i.e., a check for incompatibilities and interactions. In both cases, the bonus was deducted from the invoice amount. The plaintiff, a pharmacists' association, considered this practice to be inadmissible and brought an action against the mail-order pharmacy advertising the Rx bonuses.
The proceedings before the Federal Court of Justice were preceded by judgments of the Munich Regional Court I of March 13, 2014 (Ref.: 11 HK O 12091/13) and the Munich Higher Regional Court (OLG Munich) of March 7, 2024 (Ref.: 6 U 1509/14), which upheld the action in each case. Irrespective of these two proceedings, on October 19, 2016, the European Court of Justice (ECJ) issued a preliminary ruling in another case on the question of the fundamental applicability of national price regulations to mail-order pharmacies based in the European Union (Ref.: C-148/15 – Deutsche Parkinson Vereinigung). The ECJ ruled that national price regulations for prescription drugs may, under certain conditions, violate the free movement of goods under Articles 34 and 36 TFEU.
The appeal decision of the Munich Higher Regional Court of March 7, 2024 (Ref.: 6 U 1509/14) shall be recapitulated in light of the imminent decision of the Federal Court of Justice. The court ruled that both the bonus of €3 per medication when a prescription is filled and the bonus for the medication check constitute a violation of the drug pricing provisions of Sections 78 para. 1 sentence 4 AMG (old version) and 129 para. 3 sentence 3 SGB V. The court justified this on the grounds that a violation of price regulation would exist both if a price-regulated drug were sold at a price that did not comply with the drug price regulations and if the correct price were set for the price-regulated drug but the customer were granted advantages linked to the purchase, which made the purchase appear more economically advantageous to them. The latter was the case with the Rx bonuses, which meant that they were not compatible with national drug price regulations. In detail, the court ruled as follows:
- Section 78 para. 1 sentence 4 AMG (old version) constitutes a measure having equivalent effect within the meaning of Article 34 TFEU, but is justified under Article 36 TFEU. The provision is suitable for achieving a legitimate objective apparent from the legislative materials, namely the protection of health in the form of a comprehensive, safe, and high-quality supply of medicines. The extensive discretion of the national legislature in this area must also be taken into account.
With regard to the ECJ's 2016 decision, it should be noted that Section 78 para. 1 sentence 1 AMG (old version) was only considered contrary to EU law because the parties had not provided sufficiently substantiated arguments in the specific proceedings to justify it under Article 36 TFEU. Therefore, the Court's decision does not have any fundamental binding effect with regard to the invalidity of the drug price regulations. In the proceedings to be decided by the Higher Regional Court, however, the substantiation required for justification under Article 36 TFEU had been provided to the satisfaction of the court, so that the measure having equivalent effect within the meaning of Article 34 TFEU was justified under Article 36 TFEU.
- In the court's view, Section 129 para. 3 sentence 3 SGB V, on the other hand, did not constitute a measure having equivalent effect within the meaning of Article 34 TFEU. The court justified this in particular on the grounds that, unlike Section 78 para. 1 sentence 4 AMG (old version), this provision did not apply to the entire market, but exclusively to the dispensing of medicinal products to persons with statutory health insurance. Furthermore, the court stated that the mandatory use of e-prescriptions since January 1, 2024, would have created a competitive framework for the distribution of prescription drugs by mail-order and local pharmacies. Even if one were to consider Section 129 para. 3 sentence 3 SGB V to be a measure having equivalent effect within the meaning of Article 34 TFEU, it would in any case be justified under Article 36 TFEU. This would follow from the reasons already mentioned with regard to Section 78 para. 1 sentence 4 AMG (old version) and, in addition, from the principle of solidarity applicable to statutory health insurance.
Outlook
The decision of the Federal Court of Justice, which is scheduled to be announced on July 17, 2025, is eagerly awaited. It will be particularly interesting to see whether the Federal Court of Justice will share the view of the Munich Higher Regional Court and affirm the conformity of German drug pricing law with EU law, which the ECJ had denied in 2016 – although on the basis of insufficiently substantiated arguments regarding justification under Article 36 TFEU.
