Pharmacy Redcare announces extension of its CardLink service - decision deadline approaches tomorrow
In a recent ruling, the Higher Regional Court in Frankfurt has tightened the reins on financial incentives related to prescription drugs in Germany, under the German Act on Advertising in the Healthcare Sector (Heilmittelwerbegesetz – HWG). The ruling prohibits vouchers that act as financial incentives tied to the purchase or dispensing of prescription medicines, even when they partially apply to statutory co-payments and the remainder can be used to buy non-prescription products.
This decision affects mail-order pharmacies like DocMorris and pharmacy operators like Redcare Pharmacy, which may have offered promotional vouchers or bonuses to attract customers. The court emphasized that any financial incentive that could influence consumers’ decisions to purchase prescription drugs or related products violates Section 7(1) HWG.
The ruling also stated that the threshold exemption for "low-value items" does not apply when values exceed nominal amounts (usually around one euro), and marketing promoting an entire product range is considered product-related and thus falls under advertising restrictions.
For instance, Dutch mail-order pharmacy DocMorris, operating in Germany, offered €10 vouchers for e-prescriptions and first-time app orders, which the court ruled impermissible because the vouchers could be used for products beyond the statutory co-payment. Redcare Pharmacy must ensure its marketing and promotional activities comply strictly with the prohibition on benefits and avoid incentives that could be interpreted as unfair competition or inducements to purchase prescription drugs.
The current price level of Redcare Pharmacy's stock is below 100 euros, making it an attractive option for investors. However, the pharmacy's MDAX stock fell from around 115 euros into double-digit price ranges due to Kepler Cheuvreux downgrading Redcare Pharmacy's stock from "Buy" to "Hold". The Bavarian Association of Pharmacists had previously argued that such bonuses violated drug price regulation and competition law.
Both DocMorris and Redcare Pharmacy are eagerly awaiting an important decision expected on July 17, as the Federal Court of Justice will make an announcement regarding the bonus for prescription drugs at that time. The BGH hearing for this case took place on May 7, and the ruling will be crucial for both pharmacies, particularly in the online and mail-order spaces.
Redcare Pharmacy confirmed its 2025 targets at the beginning of July, and the online pharmacy has also received an extension of its CardLink solution until the end of January 2027. DocMorris, too, has received the CardLink option for e-prescription redemption. The recent ruling curtails the freedom of pharmacies to use bonuses or vouchers as marketing tools for prescription drugs, imposing tighter compliance requirements on these pharmacies.
For more details on the previous course of the proceedings and further information on the case, please click here.
[1] Source: apotheke adhoc, BGH ruling details (German)
The recent court ruling, affecting businesses like DocMorris and Redcare Pharmacy, has imposed stricter rules on the use of financial incentives for prescription drugs, particularly vouchers. These incentives are now considered a violation of Section 7(1) HWG if they influence purchase decisions.
The court decision also impacts the marketing strategies of these businesses, with Redcare Pharmacy needing to ensure its promotional activities align with prohibitions on benefits to avoid being perceived as unfair competition or inducements to purchase prescription drugs.
