October 13, 2020

Ecommerce of medicines: the European Court of Justice states the applicability of certain restrictions imposed by a Member State destination of ecommerce upon a provider established in another Member State

On October 1, 2020, the European Court of Justice (“ECJ”) issued a very interesting judgment in a case between a company incorporated under Netherlands law that operates both a dispensing pharmacy established in the Netherlands and a website specifically targeting French customers and associations representing the professional interests of pharmacists in France. The case concerned a wide-ranging and multifaceted advertising campaign carried out by the Dutch pharmacy to promote its website to French customers, forbidden under French law.

According to the ECJ, a business selling medicinal products (not subject to medical prescription) online may constitute an information society service, under the definition provided in Article 2(a) of Directive 2000/31 (“Directive”) and, therefore, it must be assessed within the framework of said Directive.

Pursuant to Article 3(2) of the Directive, generally speaking, the Member State that is the destination for online sales of medicinal products not subject to medical prescription may not, so far as relates to that activity, restrict the free movement of information society services from another Member State.

In this case, Member State national legislation that prohibits pharmacies from soliciting clients through certain procedures and methods restricts the opportunity for a pharmacy established in another Member State to make itself known to potential customers in the first Member State and to promote its online sales of products to customers. Therefore, the prohibition must be regarded as a restriction on the freedom to provide information society services.

That said, pursuant to Article 3(4)(a) of the Directive, Member States may, with regard to a specific information society service, take measures that derogate from Article 3(2) of that Directive, provided that those measures: (i) are necessary in the interests of public policy, the protection of public health, public security, or consumer protection; (ii) are taken against an information society service that actually undermines those objectives or constitutes a serious and grave risk to those objectives; and (iii) are proportionate to those objectives.

In applying the principles above to the case at stake, the ECJ stated that the Directive must be interpreted as not precluding the Member State that is the destination of online sales of medicinal products not subject to medical prescription from applying its national legislation to the provider of that service established in another Member State when such legislation:

  • prohibits pharmacies from soliciting clients through certain procedures and methods, in particular through the extensive use of post and leaflets for advertising purposes outside the pharmacy, provided that this does not result in the provider being prevented from carrying out any advertising outside the pharmacy, regardless of the medium used or the scale thereof, which is for the referring court to ascertain;
  • prohibits pharmacies from extending promotional offers consisting of a discount on the total price of an order of medicinal products once a certain amount is exceeded, provided, however, that such prohibition is sufficiently circumscribed and specifically targeted solely at medicinal products and not at mere parapharmaceutical products, which is for the national court to ascertain;
  • requires that pharmacies selling such medicinal products include a health questionnaire as part of the process of ordering medicinal products online.

Conversely, the Directive must be interpreted as precluding the Member State that is the destination of online sales of medicinal products not subject to medical prescription from applying its national legislation to the provider of that service established in another Member State when such legislation prohibits pharmacies selling such medicinal products from using paid references on search engines and price comparison websites, unless it is duly established before the referring court that such legislation is appropriate to ensuring that public health is protected and does not go beyond what is necessary to achieve that goal.

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