The Ministry of Justice finds that in order to increase competition, Estonia's medicines market should be liberalised to a significant degree, including by lifting the restriction on pharmacy ownership and the prohibition of vertical integration, among other changes.
The restrictions set out in valid law, such as the prohibition of the vertical integration of a pharmacy and a wholesaler, the ownership restriction requiring that a pharmacy be owned by a pharmacist, and the prohibition on the sale of over-the-counter (OTC) drugs outside pharmacies do not serve the interests of consumers, Minister of Justice Urmas Reinsalu (Pro Patria) said in a letter to the Ministry of Social Affairs.
Reinsalu said that the prohibition of vertical integration would be grounded if the wholesaler was a natural monopoly and the establishment of a rival wholesaler was not possible. This holds true for the energy sector, where a prohibition of the vertical integration of the electricity and gas transmission networks applies.
While in the electricity and gas networks we have natural monopolies where competition is precluded and where the risk of unfair treatment exists when the transmission network is owned by the energy seller, in the medicines sector, a risk like this is precluded, the ministry said.
A similar situation exists with regard to pharmacies, which do not constitute a monopoly service and where the establishment of a rival pharmacy is economically possible.
The best result for the consumer is ensured by free competition, where no restrictions apply to the economic activity of wholesalers and pharmacies, the ministry found.
Ownership restrictions unnecessary
The objective of having pharmacist-owned pharmacies could be provision of the best service to the consumer and ensuring the safety of medicinal products. The achieving of this objective through ownership restrictions is not grounded, however, according to the Ministry of Justice.
For ensuring the safety of medicinal products, observance of the provision of the Medicinal Products Act according to which only pharmacists and assistant pharmacists registered by the Health Board may provide pharmacy services in a pharmacy or structural unit thereof is absolutely sufficient, the ministry argued.
On the subject of pharmacies in rural areas, the option should be considered whereby a municipality would be entitled to file an application with the State Agency of Medicines for a pharmacy to be established on their territory and a subsidy arrangement would be provided.
OTC drugs should be sold at other stores
In addition, the ministry believes that the sale of OTC drugs should be liberalised and the sale of such products allowed at supermarkets, gas stations and similar locations and not restricted to pharmacies exclusively.
The same topic has been previously highlighted by the Estonian Competition Authority, the ministry said.
Under valid law, the retail sale or other dispensing of medicinal products is defined as pharmacy service, which must be provided only at pharmacies holding a corresponding activity license and in structural units thereof.
Editor: Aili Vahtla