In a judgement handed down on 1 October 2020 (case C-649-18) the Court of Justice of the European Union (CJEU) ruled on the prohibition for a Member State to restrict the free movement of information society services from another Member State, in respect of the online sales of medicinal products not subject to medical prescription. 

The case at issue arose from a dispute between the Dutch company Shop-Apotheke, that sells medicinal products through a website directed at French consumers, and several operators of dispensing pharmacies and associations of French pharmacists (“Daniel B and Others”).

Shop-Apotheke had carried out an advertising campaign directed at French consumers for the online sale of medicinal products not subject to medical prescription. The campaign in question included the sending of leaflets and the publication on its website of promotional offers consisting of a discount on the total price of an order once a certain amount was exceeded. In addition, Shop-Apotheke had used paid referencing on search engines.

For these reasons, Daniel B and Others had brought an action against Shop-Apotheke before the Commercial Court of Paris.  According to the claimants, Shop-Apotheke would have carried out acts of unfair competition, by unduly taking advantage from failing to comply with French legislation on the online advertising and sale of medicinal products. Shop-Apotheke had replied that those French rules did not apply to it, as it is duly established in the Netherlands, and it sells medicinal products to French consumers only via e-commerce.

The Commercial Court of Paris had upheld Daniel B and Others’ claim by ruling that the French public health code was also applicable to companies established abroad which sell medicinal products via the Internet to French patients. Consequently, the Court of first instance had stated that Shop-Apotheke had committed acts of unfair competition taking advantage of the failure to comply with those provisions. Therefore, the latter had appealed against that judgement before the Court of Appeal of Paris, reaffirming that the French public health code was not applicable to it. Besides, such provisions would constitute an unjustified barrier to the principle of application of the country of origin rules, pursuant to Article 3.1 of the Directive 2000/31 and to the principle of free movement of goods, pursuant to Article 31 TFEU.

Following the appeal filed by Shop-Apotheke, The Court of Appeal of Paris decided to raise a preliminary question relating to the possibility for a Member State to impose specific rules on pharmacists operating in its territory, but based in another Member State, concerning: 1) the prohibition of acquiring clients through procedures and methods which are contrary to professional dignity; 2) the prohibition of inciting  patients to the abusive consumption of medicinal products, in particular through the inclusion of a health questionnaire as part of the online purchasing procedure; 3) the obligation to observe good practices in the distribution of medicinal products; 4) the prohibition of using paid referencing on search engines.

As regards to those questions, the CJEU noted that the said rules shall be preliminarily assessed in view of  Article 3.4 of the 2000/31 Directive. Under this provision a Member State may, in respect of an information society service, take measures that derogate from the principle of the freedom to provide information society services, provided that such measures are necessary to protect public health, public policy or the consumer and proportionate to those objectives.  

Having said that, the CJEU examined the first question brought to its attention: the possibility for a Member State to prohibit pharmacies based in another Member State from acquiring clients through procedures and methods which are contrary to professional dignity, in particular through the extensive sending of mail and leaflets.  The CJEU noted that the French Government’s argument for this prohibition, namely the need to protect the dignity of the pharmacist’s profession in light of the relationship of trust between the latter and the client, is capable of justifying the restriction of the freedom to provide services. In fact, a large-scale advertising campaign may carry «the risk of medicinal products being equated with ordinary consumer goods», conveying «a commercial and mercenary image of the profession of a pharmacist which may alter the public perception of that profession». Nevertheless, the CJEU specified that a national legislation which imposes a general and absolute prohibition of any advertising to promote the sales of medicines or healthcare services would not be reasonable.   

The second question regards the possibility for a Member State to prohibit pharmacies based in another Member State from making promotional offers consisting of a discount on the total price of an order of medicinal products once a certain amount is exceeded. In this respect, the CJEU accepted the French Government’s argument, based on which this prohibition is aimed to prevent the excessive or inappropriate consumption of medicinal products, thus achieving a high level of protection of public health. The CJEU however clarified that this prohibition must only be targeted at medicinal products and not at para-pharmaceutical products. In addition, this prohibition must be sufficiently circumscribed, for example by setting a threshold at which the promotional offer is capable to determine an excessive consumption. 

As regards to the possibility for a Member State to impose upon the pharmacies of another Member State, the inclusion of a health questionnaire during the process of ordering medicinal products online, the CJEU agreed with the conclusions of the French Government. In particular, the CJEU recognised that the French Government’s «objective of ensuring the provision of individual advice to patients in order to protect them from the misuse of medicinal products» is legitimate and adequate to protect public health. In summary, the health questionnaire would be necessary because an online pharmacy does not have a direct relationship with the client and the latter could not be guaranteed to receive adequate advice, in particular with respect to any contraindications of the medicinal product. 

In respect of the last question, regarding the possibility for a Member State to prohibit pharmacies of another Member State from using paid referencing on search engines and price comparison websites, the CJEU did instead not accept the French Government’s arguments. According to the latter, such a prohibition would be justified in the need to ensure a balanced distribution of pharmacies throughout the national territory «since such listings are likely to concentrate the marketing of medicinal products in the hands of large pharmacies». On that point, the CJEU recognised that «the objective of ensuring that the provision of medicinal products to the public is reliable and of good quality throughout the national territory is capable of justifying a restriction on trade between Member States in so far as it contributes to the protection of human life and health». Nevertheless, because it is for the Member State to adduce any evidence of the necessity to restrict the freedom to provide information society services, in the present case, the French Government did not support its general assertion. As a consequence, the CJEU continues, the referring Court shall «objectively examine whether any evidence that may be adduced before it allows it to reasonably conclude that the means chosen are appropriate for the attainment of the objectives pursued and that those objectives cannot be attained by measures which are less restrictive».

In conclusion, summarising the above, the CJEU stated that the directive 2000/31 does not preclude the application, by the Member State of destination of an online sales service relating to medicinal products not subject to a medical prescription, to the provider of that service established in another Member State of a national legislation which: 1) prohibits pharmacies from soliciting their clients through certain procedures and methods, in particular through extensive leaflet distribution for advertising purposes outside their pharmacy, provided that it does not result in the provider in question being prevented from carrying out any advertising outside his or her pharmacy, regardless of the medium used or the scale thereof, which  is for the referring court to ascertain; 2) prohibits pharmacies from making 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 a prohibition is sufficiently circumscribed and particularly targeted solely at medicinal products and not at mere para-pharmaceutical products, which is for the national court to ascertain; 3) requires that pharmacies selling such medicinal products include a health questionnaire in the process of ordering medicinal products online. On the contrary, the Directive 2000/31 precludes the application of a national legislation that «prohibits pharmacies selling such medicinal products, from using paid referencing on search engines and price comparison websites, unless it is duly established before the referring court that such legislation is appropriate to ensure the attainment of the objective of protecting public health and does not go beyond what is necessary in order to attain that objective».