ECJ ruling a blow for DocMorris/Celesio

The judgement the European Court of Justice that only pharmacists may own and operate pharmacies in Germany (Marketletter May 25) is a  particular a blow for the Netherlands Internet-based group DocMorris, a  subsidiary of the Stuttgart drug wholesaler Celesio.

DocMorris was allowed to take over operation of a pharmacy in mid-2006  by the Saarland state government, but this was opposed by region's  pharmacists and the German pharmacy federation, the ABDA. A Saarland  court referred the case to the European Court in early 2007 for  clarification. Drug sector analysts in Germany now argue that Celesio  and DocMorris will focus on marketing drugs and medicines by direct  mail, with a marked expansion in this activity. Celesio is also expected  to expand DocMorris' franchising system, which has been supported to  date by about 150 pharmacist-owned pharmacy businesses.

Franchising contributed some 1.0 million euros ($1.3 million) to the  group's total sales in the first quarter of this year but remains  marginal at present. The aim is to achieve 500 franchise partners by  2011. However, Celesio's role is seen as controversial. The acquisition  of DocMorris for 180.0 million euros in 2007 was followed by a costly  promotional campaign for the brand. German pharmacists protested  against the acquisition and many started a boycott against its drug  wholesale subsidiary Gehe AG. However, Celesio says the DocMorris  purchase would have made sense and been beneficial even without the  hoped-for further opening up of the German pharmacy market.