The legal regulations governing the cooperation between pharmacies and online marketplaces have resulted in a large number of sometimes divergent court decisions in recent years, creating legal uncertainty for such cooperations. The Federal Court of Justice (BGH I ZR 46/24) has now finally settled a number of contested issues about the interpretation of sections 8 and 11 Pharmacy Act (Apothekengesetz, “ApoG”), paving the way for greater cooperation between pharmacies and online platforms.
A. Background
The case concerned an online marketplace through which customers could purchase both prescription-only and over-the-counter drugs from that marketplace’s partner pharmacies. In return, the partner pharmacies paid the platform a monthly flat fee of EUR 399 and a 10% transaction fee on sales of over-the-counter medicines. At issue was whether the agreed fee and the forwarding of prescriptions meant that these partnerships violated sections 8 and 11 ApoG. Karlsruhe Regional Court initially upheld the action, only for Karlsruhe Higher Regional Court to rule partly in favour of the online marketplace on appeal.
B. The Federal Court of Justice’s decision
As part of its assessment of admissibility, the Federal Court of Justice found that the conclusion of partnership agreements between platforms and pharmacies for the distribution of medicinal products via the online marketplace was likely to make it more difficult for non-participating pharmacies to compete. The Court held that this applied regardless of where the respective pharmacy concluding the contract with the platform was based, with the right to take legal action existing independently of location.
However, the Federal Court of Justice ruled in favour of the platform concerned, concluding that the cooperation did not violate either the ban on prescription brokerage under section 11(1a) ApoG or the ban on pharmacy revenue sharing under section 8 ApoG.
Ban on prescription brokerage not violated
The Federal Court of Justice confirmed the Higher Regional Court’s view that section 11(1a) ApoG requires a direct connection between the benefit granted and the actions specified in that section. The fee would have to be paid specifically for forwarding or brokering prescriptions to run afoul of the ban, it said. The Court concluded that this did not apply to the marketplace infrastructure, as the monthly flat fee was incurred regardless of whether and how many medicinal products were sold via the platform. It based this interpretation on the wording, underlying system and protective purpose of the provision, at the same time drawing a comparison with the laws governing professional physicians, according to which it is also illegal to give or accept payment or other benefits for referring patients. According to the established case law of the Federal Court of Justice, there must be a direct link between the patient referral and the benefit granted for there to be a violation – which is not the case unless the payment is made as commission for a specific referral. The Court took the view that such a link between the action and the benefit is also required for there to be a violation of section 11(1a) ApoG. The protective purpose of the provision is only triggered if an online platform exerts so much economic pressure on bricks-and-mortar pharmacies that they have no choice but to join that platform out of fear of losing prescriptions. This did not apply in the case at hand, however, as the flat fee was not charged for brokering or collecting prescriptions, but only for providing the marketplace infrastructure.
Freedom to choose a pharmacy not impaired
The Federal Court of Justice also held that the freedom to choose a pharmacy pursuant to section 31(1), sentence 5 Social Security Code, Book V (Sozialgesetzbuch, Fünftes Buch) was not restricted. That the platform only showed pharmacies that had concluded a partnership contract did not restrict the customer’s freedom of choice; their decision to use the platform was merely an expression of their right to choose.
Revenue-based fee and economic dependence
Unlike the Higher Regional Court, the Federal Court of Justice came to the conclusion that charging a fee of 10% of the net sales price for over-the-counter drugs did not fundamentally violate section 8, sentence 2 ApoG, which prohibits making assets available in return for revenue- or profit-based remuneration. The Higher Regional Court ruled that providing the distribution infrastructure constituted an asset made available to the participating pharmacy in return for a fee that depended on the pharmacy’s revenue. The Federal Court of Justice has now taken a different view, arguing that the provision’s regulatory purpose – to protect the pharmacist’s professional freedom of choice and prevent economic dependence on third parties – was not fundamentally impaired by remuneration calculated as a percentage of a sales price.
Although the provision of digital infrastructure could in principle constitute an asset as specified in section 8, sentence 2 ApoG, it can only be assumed that the remuneration is dependent on the revenue or profit of the pharmacy – within the meaning of this sentence – if that pharmacy’s revenue and profit are based to a significant extent on the transactions for which the corresponding fee is paid.
The Federal Court of Justice referred the question of whether the transaction fee of 10% of the sales price caused the pharmacies to be economically dependent back to Karlsruhe Higher Regional Court for a decision. The Higher Regional Court must now determine what proportion of the pharmacies’ revenue and profit is generated from the distribution of over-the-counter drugs via the platform.
C. Conclusion and outlook
The Federal Court of Justice’s decision puts partnerships between pharmacies and online marketplaces on a sounder legal footing and is therefore to be welcomed. It is now clear that platform and marketplace models are generally compatible with current pharmacy law, even if the platform can only be used to choose from pharmacies that have a contract with the platform. However, it remains unclear when a pharmacy is deemed to generate a “significant part” of its revenue through sales via a platform, thereby crossing the line as far as section 8, sentence 2 ApoG is concerned. The Higher Regional Court is unlikely to establish such a dependency in the present case based on the criteria set by the Federal Court of Justice, especially since German pharmacies typically generate less than 8% of their revenue from over-the-counter drugs, and usually only a fraction of that via marketplaces or platforms.
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