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Limitations to the online sale of medicinal products in the European Union

Published on 24th Feb 2021

In its judgment of 1 October 2020, the Court of Justice of the European Union analyses if, under the E-Commerce Directive, a Member State may limit online advertising, from another Member State, of medicinal products not subject to prescription.

Case C-649/18 arose when a claim was brought before the Commercial Court in Paris by a group of professionals operating pharmaceutical offices and the associations representing pharmacists in France against a Dutch company incorporated under the laws of the Netherlands ("Company A"), whose business is the operation of a pharmacy and the online sell of medicinal and pharmaceutical products using different websites, one of which is specifically directed at French consumers. The medicinal products sold are OTC (over the counter) and are authorised to be sold in France. Company A carried out an advertising campaign characterised by the sending of mass mailings of advertising leaflets in packages sent by other traders engaged in sale at a distance and the sending of advertisements by post, as well as the publication on their website of promotional offers consisting in a discount on the total price of an order once a certain amount was exceeded, using a purchased paid search engine referencing. The plaintiffs considered that this conduct constituted unfair competition, since Company A had unduly benefitted from failing to comply with French regulations on online advertising and sale of medicinal products. However, Company A considered that said regulations did not apply to it since it was operating as a dispensing pharmacy from the Netherlands and selling products to French consumers via e-commerce. The French court concluded that Company A had committed acts of unfair competition by using means to attract French customers which were contrary to the dignity of the pharmaceutical profession and to promote abusive consumption of medicinal products.

Upon the appeal lodged by Company A, the Court of Appeal of Paris decided to stay the proceedings and raise a preliminary question to the Court of Justice of the European Union ("CJEU") to clarify if European regulations (Article 3.4 of the E-Commerce Directive) allow a Member State to impose pharmacists from another Member State specific rules concerning (i) the prohibition of acquiring clients through procedures and methods contrary to the dignity of the profession; (ii) the prohibition of inciting patients to engage in the abusive consumption of medicinal products, in particular through the obligation to include a health questionnaire in the ordering process, and (iii) the obligation to observe good practices in the distribution of medicinal products, prohibiting the use of paid referencing on search engines and price comparison websites.

With regard to the prohibition of attracting clients through the extensive sending of post and leaflets for advertising purposes - considered to be an ancillary and inseparable element from the online sales service - the CJEU points out that the need to protect the dignity of the pharmaceutical profession, within the context of the relationship of trust between pharmacists and their clients, may justify the restriction on the freedom to provide information society services in accordance with Article 3.4 of the E-Commerce Directive. To this end, the extensive use of advertising like the one causing this dispute may entail the risk that the public will associate medicinal products with ordinary consumer goods and that the commercial and mercenary image of the profession of pharmacist may be altered.

The CJUE does not oppose to promotional offers consisting in a discount on the total price of an order of medicinal products once a certain amount is exceeded, since it considers it aims to prevent the excessive or inappropriate use of medicinal products and that this contributes to ensuring a high level of protection of public health. However, it clarifies that this prohibition should only apply to medicinal products and not to para-pharmaceutical products, and that it should be sufficiently regulated by indicating the threshold above which consumption must be regarded as excessive.

Regarding the obligation of including an online health questionnaire during the process of ordering the medicinal products, the CJEU recognizes that this measure of the French government to provide an "individual advice to patients" is legitimate and appropriate for protecting public health and even necessary insofar as an online pharmacy does not speak directly to clients and, therefore, cannot guarantee to give them adequate advice, taking into account the possible contra-indications of the medicinal products.

Regarding the possibility of prohibiting the use of paid referencing on search engines and price comparison websites, the CJEU recognizes that the reliability and good quality of the provision of medicinal products is capable of justifying such a restriction if it contributes to the protection of health and life of humans. However, the CJEU holds that it is up to the Member State to provide the evidence that justifies the necessity of restricting the freedom to provide information society services, and the French government has not provided any such evidence in this case. In any event, as a general rule, the CJEU considers that the Member State of destination of an online sales service for OTC medicinal products cannot prohibit pharmacies from another Member State from selling said products using paid referencing services in search engines and price comparison websites, unless the Member State of destination can prove that such prohibition is necessary in order to protect public health.

This decision undoubtedly highlights the distinction and points of convergence between the marketing strategies used by pharmacy operators engaged in the online sale of OTC medicinal products and the regulations of the Member States that guarantee public health, ultimately ensuring consumer protection, particularly in view of the fact that the health and life of individuals is at the forefront of the goods and interests protected by the European Union treaties.

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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