The European Court of Justice (the “Court”) has upheld the lawfulness of a Latvian law banning any advertising of medicinal products to the general public that encourages purchases by offering discounts and other special price offers, including reduced bundled pricing.
The Court goes as far as saying that Member States must ban such advertising, even if not expressly prohibited by EU harmonising rules, where that is necessary to prevent the irrational use of medicines that are not subject to prescription or reimbursement.
The ruling is without prejudice to the ability of traders to grant discounts and other price reductions when selling medicines and other health products
In 2016, a Latvian pharmacy group was prosecuted for running a promotion offering a 15% discount on the price of any medicine where at least 3 products were purchased in breach of Latvian law prohibiting price promotions. On appeal, the Latvian Constitutional Court sought guidance from the Court on the interpretation of the EU harmonising rules contained in Directive 2001/83. Those rules prohibit, without exception, any advertising of a medicine for which a market authorisation has not been granted (Article 87(1)), and any advertising to the general public of medicines that are available on prescription only (Article 88(1)); Member States may ban on their territory advertising to the general public of medicines the cost of which is reimbursable (Article 88(3)).
The Latvian law in question extended to advertising to the general public of authorised medicines that are neither subject to prescription nor reimbursement.
The defendant pharmacy group argued that Directive 2001/83 brought about complete harmonisation and applies not to advertising of medicines in general, but only to advertising relating to specific categories of medicines. On this basis, it argued that Member States may not adopt more restrictive additional rules.
The Court agreed that the Directive brought about complete harmonisation. This means that where the option of Member States enacting different rules is not expressly foreseen, the only conditions they can impose are those laid down in the Directive. Specifically, Article 90 of the Directive sets out a list of banned advertising methods (such as adverts giving the impression that a medical consultation or surgical operation is unnecessary, or that suggests that the effects of taking the medicine are guaranteed…). The Court ruled that the fact that Article 90 does not contain any specific rules concerning certain advertising material (such as those prohibited by the Latvian law in question), does not preclude Member States from prohibiting advertising that is capable of encouraging the irrational use of medicinal products since Article 87(3) of the Directive requires that advertising promote the rational use of medicines.
On this basis, the Court concludes that Member States must prohibit advertising material that is liable to promote irrational use of medicines that are neither subject to prescription nor reimbursement in the interests of safeguarding public health. Discounts and bundled rebates are liable to lead consumers to consume those medicines without them being equipped to carry out an objective evaluation based on the therapeutic properties of the products and on their specific medical needs, thereby encouraging irrational and excessive consumption.
The Court nonetheless recognises that price competition can help ensure that medicines are affordable which is in the interests of public health. It points out that the prohibition of direct consumer advertising offering promotional prices does not affect the ability of those trading in medicines to grant discounts and price reductions when selling medicines and other health products.
The ECJ distinguishes this case from its judgment of 15 July 2021 (Case C-190/20, DocMorris) where it found that an advertising campaign in the form of a prize draw that enabled participants to win everyday items (other than medicines) where the participants were making an order for a prescription medicine fell outside the scope of Directive 2001/83’s direct advertising restrictions: the prize draw did not seek to influence the customer’s choice of medicine, but rather the customer’s choice of pharmacy.
Case C-530/20, judgment of 22 December 2022.