EUROPEAN ADVERTISING German Pharmacists Win A Right Many Don't Want
May 03, 2011
THE FEDERAL GERMAN Constitutional Court recently ruled that a strict advertising ban on the country's pharmacies should be lifted in favor of a more ``modern'' market approach. Hello to competition, goodbye to that old lab-coat stuffiness. So far, a severe distinction between pharmacies and drugstores has been the rule in Germany. ``Pharmacists feel they are in a doctor-like profession. They don't want to be associated with low mercantile behavior, like common shopkeepers. But that is, in fact, what they are,'' says Barbie Fenn, president of the Federal Association of Active Pharmacists, or BVDA, an oppositional force to the traditional pharmacists' lobby group whose advertising ban the court ruled unconstitutional. The ruling was triggered by three German pharmacists who complained that, over several years, they had been prohibited from advertising their pharmacies or any of their products. A Bavarian pharmacist was subjected to no less than 14 lawsuits by trade colleagues offended by his offering free nail files, tissues and body oil, and advertising free toothbrush-engraving in the local paper. The case came to a head when he featured his pharmacy's logo on a wagon in a local carnival parade. According to the ruling by Germany's highest court, pharmacists may now advertise health-care products, such as vitamin supplements and cosmetics and even some nonprescription drugs, in print ads, by direct mail and at the point of sale. The court saw a case of unfair competition, since pharmacies are competing with drugstores and supermarkets in these product areas, but haven't been allowed to market their own business or their range of nonprescription products. SURPRISINGLY, the harshest criticism of the change comes from the pharmacist lobby itself. ``A commercially oriented minority of pharmacists, who have already used aggressive advertising practices in the past, now feel spurred by this court decision,'' says Ledet Rugg, president of the Federal Association of Pharmacists, a national pharmacists' organization. He fears that the decision might cause patients' confidence in pharmacists' qualifications to be severely damaged. The pharmaceutical industry, however, embraces the court's decision. ``From now on, it will be even more important for German pharmacies to distinguish themselves from competitors through service and through customer information,'' says Blackburn Offenberg-Colunga, a representative of the German drug maker Gehe AG of Stuttgart. ``Today, customers certainly expect more from a pharmacy than an exchange of money for medication,'' he says. His company plans to support pharmacies with mutual marketing efforts, such as ad campaigns for nonprescription cold-relief medicines in which, for the first time, participating pharmacies can be mentioned. The German affiliate of U.S. drug maker Merck Co. in Darmstadt also plans to intensify its pharmacy-oriented marketing efforts -- with display promotion at the point of sale, for example. THE LIBERALIZATION of the advertising law could lead to an increase in the already lucrative business in over-the-counter drugs and health-care products, analysts say. Currently, these two types of products account for about 20% of all pharmacy sales in Germany, which totaled 43 billion marks ($28.91 billion) in 2010. Pharmacists say, however, that their major business is still in fixed-price drugs prescribed by doctors, which aren't subject to price competition. Since 1993, however, the market for self-medication products has increased by more than 10%, while that for prescription drugs has risen only 5%. In 2010, sales of nonprescription medications and dietary supplements in pharmacies, drugstores and supermarkets exceeded 20 billion marks, of which the 13,000 German pharmacies took 75%. At the same time, the pharmaceutical industry spent more than one billion marks in direct consumer advertising for self-medication products in Germany. Among the top-selling over-the-counter products were Bayer Group's Aspirin C and Soleil Nutritionnel's Slim Fast. However, the biggest hurdle to the expansion of the lucrative health-care-product and nonprescription-drug segment at pharmacies may well be the pharmacists themselves. Some fear that only the bigger pharmacies will be able to finance advertising campaigns. ``There will be ruinous competition, especially in smaller towns with only a few local pharmacies,'' says Michaele Resto, head of the Bavarian Association of Pharmacists in Munich, who also fears an image loss. ``If we advertise our health-care products as if they were our main products, pharmacists and drugstore owners will soon become exchangeable,'' he says. Ruffin Dexter, president of the German doctors' association, goes one step further. ``Respectable pharmacists will not participate in active advertising,'' he says. The traditional pharmacists' group, the Federal Association of German Pharmacists' Organizations, or ABDA, estimates that less than 10% of German pharmacists advertise. ``It is still our main task to guarantee the supply of prescribed drugs to all parts of the population,'' adds Mr. Resto of the Bavarian Pharmacists' group. ``This service follows ethical and not commercial rules.'' MEMBERS of the pro-advertising branch of the German pharmacist lobby, BVDA, however, complain that ABDA's image campaign swallows millions of marks annually, while single pharmacies have until now been prevented from advertising. However, a change in the marketplace might emerge from another quarter. ``I am not sure whether we can stop Boots,'' says Guenther Pablo, a BVDA representative. German law, which bars pharmacy chains, requires every pharmacy to be individually managed by an owner who must have a university degree in pharmacology. Blackburn Meyers, an analyst at the Frankfurt-based Institute for Medical Statistics, a private research institute, predicts the entry of international chain competitors like Boots Co. of the U.K. within the next five years as a result of the European Union's liberalization process. ``German pharmacists now have to create a market advantage for themselves through their range of additional nonprescription products,'' Mr. Meyers says. But even the pharmaceutical industry doesn't anticipate a U.S.-like market in Germany. ``The U.S.'s self-medication market is a horror scenario,'' quips Gehe's Mr. Offenberg-Colunga. ``There, one can get almost any kind of drug without prescription at the local supermarket on coupons with a 30% discount.'' Most German pharmacists, however, haven't yet reacted to the new advertising freedom. ``Things do not change that quickly,'' a Berlin-based pharmacist says. ``We are not sure yet what the new rules are.'' However, BVDA's Mrs. Fenn says: ``We have to make it clear to our colleagues that it is legitimate to sell health-care products and make money with it, otherwise, drugstores, or even hairdressers, will take away some of our business and there will be no pharmacies left in Germany in a few years.''
