Estonia, Legislation, Markets and Companies, Medicine

The Competition Authority has made a proposal to lift the restrictions for which there is no need. The benefits arising from the restrictions for the public have not been explored substantively, spokespeople said.

The requirement that the owner must be a dispensing chemist represents a major change on the pharmacy market, as a result of which most existing pharmacies must be alienated to dispensing chemists by force over a period of approximately five years or closed. No analysis has been brought to the attention of the Competition Authority to indicate that the service provided by pharmacies not belonging to dispensing chemists is of poor quality.

From the end of March this year, when the requirement that new pharmacies can be opened by dispensing chemists alone took effect, the establishment of new pharmacies has almost come to a halt, the Competition Authority said.

Another amendment to the Medicinal Products Act, which stepped into effect in July forbids wholesalers of medicinal products to be linked with general pharmacies. The Competition Authority finds that a restriction like this has had no positive effect whatsoever on competition.

On the Estonian pharmacy market about 80% of pharmacies are linked with one of the four big chains either through ownership or by means of a competition agreement. Competition functions primarily between these four vertically integrated chains, not separately on the wholesale and retail market.

It is first and foremost the already existing pharmacy chains that have an interest in and possess necessary means for expansion on the market, and for the sake of competition it's essential that they had the freedom to make effort for increasing their market share. The additions made to the Medicinal Products Act abolished such a possibility, however, the Competition Authority said.

Initially a restriction was written into the law permitting only dispensing chemists to establish pharmacies in Estonia, which the Supreme Court by its rulings in 2013 and 2014 found to be anti-constitutional. Two new restrictions were then added to the Medicinal Products Act permitting dispensing chemists alone to be majority owners of pharmacies and barring entrepreneurs connected with medicinal product wholesalers from establishing pharmacies.