One thing is for sure: The German health care system has a lot of inefficiencies. There are for example still 200 statutory insurances (dropped from 1200 in 1991; article in German) all having to offer the same services. The premium is paid as percentage of gross pay. Until last year there was at least competition in price, the range was from 12 to 16 %, half paid by employer, half by employee. In 2009 this competition has been eliminated and all insurances have the premium rate of 15.5 % (temporarily reduced to 14.9 % with the stimulus package). When any competition is eliminated why having 200 insurances, all with their administrative expenses?
Another example - the actual topic of this post - are the regulations for pharmacies. A pharmacy must be owned by a pharmacist (with the respective university degree) and he or she can only own up to 4 pharmacies. The European Court of Justice had to decide whether these regulations are compliant with European laws, in particular if the freedom of establishment is restricted disproportionally.
The court states the German regulation constitutes a restriction (paragraph 24) and justifies it as follows (paragraphs 28, 34):
Restrictions on those freedoms of movement may be justified by the objective of ensuring that the provision of medicinal products to the public is reliable and of good quality. [..]
The Member States [of the EU] may restrict the retail sale of medicinal products, in principle, to pharmacists alone, because of the safeguards which pharmacists must provide and the information which they must be in a position to furnish to consumers.
I agree that retail of drugs needs special education but why does the pharmacist have to own the pharmacy? Paragraphs 37 and 39:
It is undeniable that an operator having the status of pharmacist pursues [..] the objective of making a profit. However, as a pharmacist by profession, he is presumed to operate the pharmacy not with a purely economic objective, but also from a professional viewpoint. His private interest connected with the making of a profit is thus tempered by his training, by his professional experience and by the responsibility which he owes, given that any breach of the rules of law or professional conduct undermines not only the value of his investment but also his own professional existence. [..]
The operation of a pharmacy by a non-pharmacist may represent a risk to public health, in particular to the reliability and quality of the supply of medicinal products at retail level, because the pursuit of profit in the course of such operation does not involve [such] moderating factors.
This means a pharmacist owning the pharmacy is more ethically responsible than an employed pharmacist and his/her manager? Besides being questionable the assessment would justify similar regulations for any profession with responsibility for other people's life. Wouldn't the same apply to doctors employed in hospitals?
And don't forget the pharmacist can own up to 4 pharmacies. Obviously he or she can't be in all branches at the same time but needs employed pharmacists to operate the other branches. With the pharmacist being responsible for the branches' operation (paragraph 49):
Those branches are thus also presumed to be operated from a professional viewpoint, the private interest connected with the making of a profit being tempered to the same extent as in the case of the operation of pharmacies which are not branches.
The same can easily be achieved with less extensive restrictions. It should be easy to revoke an operating license for all branches from a company if there were a reason just as it is done now with the pharmacist.
This is topped by another justification for the regulation (paragraph 33):
Overconsumption or incorrect use of medicinal products leads, moreover, to a waste of financial resources which is all the more damaging because the pharmaceutical sector generates considerable costs and must satisfy increasing needs, while the financial resources which may be made available for healthcare are not unlimited, whatever the mode of funding applied. There is a direct link between those financial resources and the profits of businesses operating in the pharmaceutical sector because in most Member States [of the EU] the prescription of medicinal products is borne financially by the health insurance bodies concerned.
Pharmacy chains would have stronger buying power and could so negotiate lower prices with the pharmaceutical industry. According to an article in the Süddeutsche Zeitung (German; article itself is not available online, but appeared in the issue 115/2009, May 20, page 21) the prices fell significantly in countries like Norway after opening the drug markets.
The reasoning of the court is pretty lame. The arguments might have been provided by pharmacists associations. Many countries have deregulated pharmaceutical markets - and I haven't heard of any indication of jeopardized patient care. In contrary, the monopolistic market rather avoids competition in quality (German) according to experts in health care. The pharmacists have to be congratulated for their good lobbying work. Of course they have no interest in competition. The pharmaceutical industry has no interest in stronger negotiators. The politicians have no interest to approach such a sensitive topic, especially before this year's election. They rather repeat the pharmacists' arguments (German). At the end it's the people who have to bear the high costs of public health care.
By the way, most of the people involved in the discussions are not affected by the costs for public health care. What I consider one of the worst provisions in the German health care system is that people with a high income (lower limit is € 48,600 in 2009) can choose a private insurance rather than the statutory insurance - with the obvious effect of lower income people having to bear the burden of public health care. So while Germany might have one of the best health care systems there is definitely lots of room for improvement.
