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Internet sales threaten drug companies' supremacy

BMJ 2002; 324 doi: (Published 27 April 2002) Cite this as: BMJ 2002;324:998
  1. Annette Tuffs
  1. Heidelberg

    A row is brewing over the announcement by a German health insurance company that patients should buy their drugs over the internet to cut costs—a move that threatens to undermine the monopoly of the German pharmaceutical industry.

    The Bavarian health insurance company Bayerische Betriebskrankenkassen recently set up a contract with the Dutch internet pharmacy shop DocMorris and has advised its 1.8 million members to order cheaper drugs via the internet. This would enable them to fill prescriptions at lower cost than at a pharmacy and would also allow them to buy non-prescription drugs more cheaply.

    The Bavarian company's website tells members: “You can use DocMorris. Refundable drugs will be refunded by us, just like drugs from any other pharmacy.”

    The insurance company faces strong opposition from local pharmacies as well as state institutions. The Bavarian social ministry has issued an order from the State Insurance Agency trying to stop the company accepting bills from DocMorris.

    But on Monday the “round table” of the German Health Service, a body of health professionals and interest groups which advises the minister, came down in favour of internet trade of pharmaceutical drugs - against strong protests of the pharmacists who fear they will go out of business. Health minister Ulla Schmidt said that the health insurance companies should refund the costs of prescribed drugs, which are also for sale in Germany, as long as there was information provided on the application and side effects of the drug. The drugs must be delivered speedily to the home of the customers, said the Social Democrat politician.

    Drug safety and the nationwide closed network of basic pharmaceutical care are at risk if local pharmacists have to compete with internet shops, the opponents of DocMorris say. However, the Bavarian insurance group says that it has no doubts about the quality of the 2500 or so DocMorris products available for German customers—as well as the DocMorris medical counselling, available via a free hotline on the internet.

    The group says that customers appreciate the lower costs, which are about 20% below average for drugs on prescription. Doctors also profit from cheaper drugs because it reduces their drugs budget. Doctors with their own practices, GPs, and specialists have a budget for treatment and are punished if they exceed it. Therefore they also want cheaper drugs and recommend contracts with internet dealers like DocMorris.

    Gerhard Schulte, head of the Bayerische Betriebskrankenkassen, estimates that German health insurance companies could save about €409m (£251m; $363.4m) by buying drugs over the internet.

    However, the legal background is not yet clear. In the past two years the German Pharmacists Association has tried to stop DocMorris, which is said to have at least 20 000 customers in Germany, mainly for over the counter drugs.

    In November 2000 a court in Frankfurt ordered DocMorris to stop its deals with German customers because trading drugs by post is not allowed in Germany. The Dutch internet shop reacted by letting its customers pick up the drugs themselves or using special courier services. The matter has gone to the European Court for a ruling, and its decision is expected in 2003.

    Meanwhile the German federal health ministry is trying to take a position on this issue. On the one hand, given rising health costs, the admission of cheaper drug trading seems enticing. On the other, the German system of pharmaceutical care might be shattered by opening the doors to cost efficient competitors.

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