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The Belgian Competition Authority imposes a fine on the Order of Pharmacists

05/11/2019
The Belgian Competition Authority imposes a fine on the Order of Pharmacists

On 16 October 2019, the Belgian Competition Authority (“BCA”) imposed a fine of 225,000 EUR on the Order of Pharmacists (“Order”) for disciplinary sanctions restricting the pharmacists’ possibility to advertise and apply rebates for parapharmaceuticals.

 It is not the first time that the Order clashes with the BCA. In 2007, the BCA considered restrictions in the Order’s Deontological Code regarding opening hours, advertising, and discounts in breach of competition law; and in June 2019, a fine of 1 million EUR was imposed on the Order for obstructing the development of a new chain of pharmacists combining online sales and pharmaceutical and para-pharmaceutical shops. 

 However, whereas the Order appealed the BCA’s two earlier decisions, the present fine results from a settlement between the Order and the BCA. The Order recognised its infringement of competition law and committed to a number of measures to avoid future violations of competition law, including revising its Deontological Code and facilitating an interpretation and application by its disciplinary bodies that complies with competition law.

This once again confirms that the pharmaceutical and healthcare sector is on the BCA’s ‘radar’. On 8 October 2019, the BCA had also announced that it was conducting dawn raids at the premises of different pharmaceutical companies and hospitals to investigate restrictive practices aimed at limiting, delaying or even preventing the entry into the market or the expansion of biosimilar medicines that compete with existing medicines.

Investigation

 The BCA’s Investigation and Prosecution Service decided to start its investigation after it received several complaints between 2010 and 2017 from pharmacists and pharmacies. These complaints were directed against the Order’s National Council’s disciplinary sanctions on the basis of the pharmacists’ deontological code. Several of these sanctions were directed against the use of online tools, such as search engines and social media, as well as paid referencing, to reach out to patients.

The complaints stated that the pharmacists were being hindered in continuing their commercial activities in a normal manner. The BCA considered the complaints partially founded and particularly sanctioned the Order for provisions and decisions prohibiting a number of advertising practices and online publicity mechanisms for parapharmaceutical products.

 

Settlement

The fine of 225,000 EUR resulted from a settlement procedure, a tool that simplifies and accelerates the closing of the infringement proceedings. This procedure has led to the Order of Pharmacists acknowledging its participation in the infringement and to a 10% fine reduction in return.

After receiving important commitments from the Order, discussed in the next section, the BCA has closed the investigation regarding the remaining issues. This decision cannot be appealed as the party in a settlement procedure must acknowledge its participation in the infringement, admit its responsibility, and accept the indicated penalty.

 

The Order’s commitments

The BCA has received important commitments from the Order of Pharmacists, which has led to the adoption of a second decision, partially putting an end to the investigation and to a declaration that the commitments are binding. These commitments can be summarised as follows:

  • By the end of 2019, the Order will adopt a revised deontological code that provides for the approval in principle of advertising and commercial practices such as “patient solicitation”. The Order has committed to authorising, in principle, the use of paid referencing and advertising via social media, for both the pharmacist’s personal advertising and the sale of parapharmaceutical products.
  • The Order will adopt by the end of 2019 an explanatory code on advertising and commercial practices supplementing the provisions of the Deontological Code and facilitating the interpretation of these rules by the pharmacists and the disciplinary bodies in compliance with competition law;
  • The Order will regularly review the explanatory code in light of the disciplinary bodies’ decision-making practice in order to avoid restrictive interpretations of competition and will put in place a mechanism to evaluate its Deontological Code at least every five years and to consider whether reform is necessary.
  • Finally, the Order will publish anonymised versions of its final decisions, including those of its provincial councils, to promote the development of a decision-making practice that is more respectful of competition law.

Contact

Hanne Baeyens

Associate

Carmen Verdonck

Partner

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