A Therapy Against National Barriers—Liberalization Of European Pharmaceutical Advertising

Cause And Effect

In retrospect, the European pharmaceutical industry may well

wonder why it owes the liberalization of advertising to a

ginseng product. Ginseng is usually not the first ingredient

that springs to mind when thinking of pharmaceutical products

in Europe. However, it's true that small causes can have

great effects: what started out as just one of the hundreds of

disputes initiated in Germany each year over pharmaceutical

advertising triggered the most significant ruling on European

pharmaceutical advertising to date, resulting in the creation

of a uniform legal framework for advertising throughout Europe

and the liberalization of national restrictions.

This butterfly whose flapping wings caused not a tornado but

a fresh breeze was the German advertising campaign of a

distributor of ginseng products. The campaign used patient

testimonials as well as a prize drawing in which consumers

could win the product in questionadvertising tools that are

both prohibited by German law. In its appearance, the campaign

did not differ much from the campaigns of distributors of

comparable products; its impact, however, differed a great

deal. Not only did the case, initiated by a fair-trade

association, go all the way to the German Federal Supreme Court

("Bundesgerichtshof"), but the court

requested a preliminary ruling of the European Court of Justice

("ECJ") on whether the German legislation was

compatible with Directive 2001/83/EC of the European Parliament

and of the Council of November 6, 2001, on the Community Code

Relating to Medicinal Products for Human Use, as amended

("the Community Code").

Minimum Standards vs. Maximum Standards

The first question put to the ECJ, which lends the case its

fundamental importance, concerned the relationship of the

Community Code to national legislation with regard to

advertising. Does the Community Code provide minimum standards

only, allowing the Member States of the European Union to

impose stricter rules on advertising, or does it at the same

time set a definitive maximum standard, limiting regulation by

the Member States? This question had also been disputed among

the Member States, the majority taking the stance that the

Community Code sets minimum standards and allows for stricter

national legislation. The ECJ, however, in its judgment dated

November 8, 2007, took the latter position (Gintec

International Import-Export GmbH v Verband Sozialer Wettbewerb

eV, Case C-374/05). The court held that the Community Code

aims to remove barriers to trade between Member States.

Disparities in national legislation on advertising may impair

the functioning of the internal market. The Community Code

expressly states in which cases Member States may adopt

stricter legislation on advertising. In the absence of such an

option, the Community Code sets not just a minimum standard but

a maximum at the same time. This is in line with a decision

rendered two months earlier in which the ECJ decided that the

procedures for obtaining a marketing authorization laid down in

the Community Code are exhaustive, preventing the Member States

from implementing additional procedures (judgment dated

September 20, 2007, The Netherlands v Antroposana et

al., Case C-84/06).

No Cure For The Defense

One of the ironies of the case lies in the futility of the

ginseng distributor's efforts to defend the advertising

campaign in question. By answering two further, specific

questions on the prohibitions of German law, the ECJ pointed

out that the campaign in question was not in line with the

Community Code either. First, the testimonials claimed to

improve health in general. This is incompatible with the

prohibition of the Community Code on any suggestion that the

health of the subject could be enhanced by taking the medicine.

At the same time, the testimonials attributed effects to the

product that in all likelihood had to be considered misleading,

as the product did not possess such properties. Second, while

prize drawings in general are not prohibited under the

Community Code, the court pointed out that any excessive and

ill-considered advertising is prohibited. Advertising must

encourage the rational use of medicine, and offering a

medicinal product as a prize does not encourage rational use.

Also, according to the court, offering this product as a prize

has to be equated with free distribution, which violates the

prohibition on direct distribution of medicinal products to the

public by the pharmaceutical industry for promotional purposes.

(The distribution of free samples is limited, under specific

conditions, to persons who prescribe medicinal products.)

Therefore, the German Federal Supreme Courtwhich has not yet

rendered its final decision subsequent to the ruling of the

ECJmight have decided the case directly because European law,

in this specific case, does not lead to a different result than

German law. However, that would have prevented the ECJ's

landmark decision.

A Therapy Against National...