CJEU rules that medicines cannot be advertised on basis of price

The CJEU found that this kind of advertising "encourages the irrational and excessive use of medicinal products that are neither subject to medical prescription nor reimbursed" and that accordingly a ban of this kind of advertising in Latvian law was in line with the EU’s Community code on medicinal products for human use.

The code harmonises the law on the advertising of medicinal products and subjects it to conditions, restrictions and prohibitions with the aim of safeguarding public health. The CJEU said that in line with the code, member states must generally take action against advertising that promotes "the inappropriate use of medicinal products" and thus prohibit a price-based promotion.

"In most EU member states direct-to-consumer price-based advertising for medicinal products is not allowed, and neither are offers such as bundled sales, two for the price of one etc, albeit differences may exist distinguishing different regimes for OTC medicines or prescription medicines," said Amsterdam-based life sciences expert Machteld Hiemstra of Pinsent Masons. "However, what remains unclear is what else could be price-based advertising and if for example bold or coloured printing of price, or other means to direct consumers to compare prices more indirectly with the risk of inducing irrational consumption fall under it."

Hiemstra said that in some countries restrictions already exist to ensure a 'neutral' price tag but that, at the same time, consumers should be able to compare prices and make informed choices.

In the case the CJEU ruled on, the Latvian Health Inspectorate had banned the Latvian pharmaceutical company Euroaptieka from disseminating an advertisement for a special sale of medicinal products in 2016. The inspectorate did so under a national provision banning advertising of medicinal products on the basis of price, special sales or bundled sales combining medicinal and non-medicinal products.

In 2020, Euroaptieka brought an action for annulment before the Latvian Constitutional Court challenging the legality of that national provision in the light of the community code on medicinal products for human use. The Latvian court referred the case to the CJEU and asked it about the scope of the term of 'advertising of medicinal products' used in the code and if the advertising of unspecified medicinal products, such as advertising of medicinal products in general or a set of non-identified medicinal products, was covered by this term. It also requested a ruling on whether the Latvian prohibition on advertising on the basis of price, special offers or bundled sales of medicinal products and other products is compatible with the code.

The CJEU found that the concept of 'advertising of medicinal products' is very broadly defined and "covers any form of door-to-door information, canvassing activity or inducement designed to promote the prescription, supply, sale or consumption of unspecified medicinal products."

The CJEU said that the dissemination of information that "encourages the purchase of medicines by justifying the need for such a purchase on the basis of the price", has a promotional purpose and thus falls within the concept of 'advertising of medicinal products', even where that information does not refer to a specific medicinal product.

Furthermore, the CJEU found that – although advertising of medicaments that are neither subject to medical prescription nor reimbursed is generally permitted under the code – EU member states nevertheless have to prohibit any form of advertising for such products that promotes the "irrational use of such medicinal products".

The CJEU said that where medicinal products neither subject to medical prescription nor reimbursed are concerned, advertising could exercise "a particularly strong influence on the evaluation and choice made by final consumers". It also said that "advertising on the basis of price and advertising of special sales or for bundled sales of medicinal products and other products is likely to lead final consumers to purchase and consume those medicinal products on the basis of an economic criterion without carrying out an objective evaluation based on the therapeutic properties of those products and on specific medical needs." For these reasons the CJEU said that the Latvian provision banning those types of advertising is compatible with EU law.

"Another question is whether or not medicinal products should be singled out of more general consumer loyalty actions that retailers may initiate from time to time," Hiemstra highlighted. "For example, earning tickets for Disneyland based on the amount of sales. In the Netherlands this is currently not the case, contrary to the position for tobacco products or alcoholic beverages."