Belgium: New developments point at possibly imminent changes in (online) pharmacy market

In Belgium, two recent events have drawn attention to the (online) pharmacy market.

First, on 28 May 2019, the Competition Court of the Belgian Competition Authority (BCA) imposed a fine of EUR 1 million on the Belgian Order of Pharmacists for the use of anti-competitive practices aimed at excluding the MediCare-Market group, an association of (para)-pharmacies (the Group) from the market of pharmacy services. As the market for services provided by pharmacists is traditionally subject to only very limited price competition, and new players would increase such competition, the Order of Pharmacists has tried for several years to hold back the Group by taking (disciplinary and judicial) actions against pharmacists linked to the pharmacies of the Group. The BCA now ruled that the Belgian Order of Pharmacists acted against the Group for the sole purpose of excluding the Group (and similar innovative business models) from the market of pharmacy services. In addition, the BCA considered that such measures are part of an anti-competitive strategy and are therefore to the detriment of the consumer.

Second, three Belgian online pharmacies have filed an invalidity claim with the Belgian Constitutional Court to cancel certain provisions of the Belgian Law of 30 October 2018 containing various provisions on health protection (the Law). By means of this claim, the relevant online pharmacies seek to be treated on an equal footing with traditional (brick-and-mortar) pharmacies. The legal provision that the three online pharmacies are aiming to have annulled requires a company that wishes to sell over the counter (OTC) medicines as well as other para pharmaceutical products online to have a physical pharmacy (where all online orders are prepared). Although the Minister of Health previously promised that certain exceptions would be created to such rule, to date no legal initiative has been taken. According to the online pharmacies, forcing a pharmacist to prepare all its internet orders in a small physical pharmacy increases the risk of error.

It is worth noting that the provisions that are being challenged before the Belgian Constitutional Court show great similarity to provisions of the French Public Health Code which have (partly successfully) been challenged before the French Administrative Supreme Court (Conseil d'Etat) (see our previous blog post: "French Administrative Supreme Court paves way for advertising non-prescription medicines on pharmacy website"). The restriction with respect to storage (to premises close to the physical pharmacy) also exists in France and has been severely criticised by the French Competition Authority for restricting competition in a disproportionate manner. However, the challenge before the French Administrative Supreme Court was not successful on this point.

These two events show that substantial changes to the legal framework with respect to (online) pharmacies and the market for pharmacy services could be imminent. Both the decision of the BCA and the invalidity claim of the online pharmacies, to the extent the latter is successful, could potentially encourage the creation of more online pharmacies and so-called "pharmacy chains" in Belgium.

This article was co-auhored by Céline Verstraete.