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Co-operation Models With Pharmacies for Medicinal Cannabis

Dr Jörn Witt and Jeannine Pettersson, of CMS Germany, highlight the innovative distribution models that have facilitated Germany's expanding market for medicinal cannabis through outsourcing to non-pharmaceutical companies under strict legal requirements.

Published on 15 June 2022
Dr Jörn Witt Chambers Expert Focus Author
Dr Jörn Witt
Jeannine Pettersson Chambers Expert Focus Author
Jeannine Pettersson

Co-operations between pharmacies and fulfilment service providers, wholesalers or telemedicine providers

Next to lifestyle products such as hemp oils and teas, skincare products, shampoos and cannabidiol (CBD) products, there is a big market in Germany for medicinal cannabis. This raises market participants’ interest in building and expanding innovative distribution models for medicinal cannabis.

Such models face strict legal requirements for dispensing narcotics and running a pharmacy business in Germany. Co-operation models between pharmacies and companies are subject to careful legal assessments by the competent supervisory authorities.

Co-operations with pharmacies are nevertheless possible and the core of such co-operation is usually the outsourcing of many non-pharmaceutical services to companies for appropriate remuneration.

Dispensing of medicinal cannabis only in pharmacies

The dispensing of medicinal cannabis in Germany is strictly regulated. In particular, the requirements of the German Medicinal Products Act (Arzneimittelgesetz, or AMG), the German Pharmacy Act (Apothekengesetz, or ApoG) and the German Narcotics Act (Betäubungsmittelgesetz, or BtMG) must be observed. “Cannabis” as defined in the BtMG means marijuana, plants and parts of plants that belong to the genus Cannabis.

There are mainly two barriers that must be overcome in the dispensing process of medicinal cannabis: the physician and the pharmacy.

Medicinal cannabis is classified as a medicinal product that is prepared for individual persons (Rezepturarzneimittel). Pharmacies are only allowed to dispense medicinal cannabis to customers if a narcotics prescription from a physician has been obtained (Article 13 (1) sent. 1, BtMG; Section 48, AMG). However, many physicians are still reluctant to prescribe medicinal cannabis. This may be because of the persistent stigma of cannabis as a recreational narcotic or because physicians often have a lack of knowledge about medicinal cannabis products.

Medicinal products may generally only be sold to the consumer, professionally or on a commercial basis, in pharmacies and not at a distance without official authorisation (Section 43 (1), AMG). The challenge in this area in Germany is that there are only a few pharmacies that stock medicinal cannabis and that are sufficiently knowledgeable in this field. Customers must often contact many local pharmacies before they can receive the prescribed medicinal cannabis.

The co-operation models between pharmacies and companies try to overcome these challenges. The challenge of insufficiently informed physicians could, for example, be overcome by involving physicians (eg, via telemedicine platforms) specialised in the field of medicinal cannabis. The challenge of insufficiently available products in local pharmacies can be reduced by online pharmacies, which are permitted in Germany (Section 11a, ApoG). They can dispense medicinal cannabis in a simpler fashion and usually faster.

No shareholding of companies in pharmacies in Germany

In Germany, the participation of non-pharmacists in the dispensing of medicinal cannabis can only be achieved through co-operation models. Telemedicine providers, wholesalers or fulfilment service providers specialised in the field of medicinal cannabis cannot invest directly in pharmacies. The reason for this is the German “Fremdbesitzverbot” (prohibition of third-party ownership) for pharmacies.

The operation of a pharmacy requires a pharmacy operating licence, which can only be applied for by a licensed pharmacist (Sections 1 (2), 2 (1) No 3, ApoG).

As the holder of the licence, the pharmacist must personally operate the pharmacy and be responsible for its management (Section 7, ApoG). The pharmacist must determine, control and monitor all essential operational processes themselves. They may neither hand over pharmaceutical activity nor leave the responsibility for the organisation of the business to others.

Co-operation models between pharmacies and companies

Pharmacies are usually fully occupied with operating the on-site pharmacy – which is obligatory in Germany to be allowed to operate an online pharmacy alongside it.

In addition, most pharmacies do not have the capacity to provide extensive marketing services and to absorb the large logistics services that arise with an ever-increasing number of customers in the medicinal cannabis market.
This is where co-operation models between pharmacies and third-party companies come in, to generate synergy effects.

"A major hurdle for the legalisation of cannabis products for consumption purposes in Germany has been cleared since the last parliamentary election in 2021."

Various co-operation models between pharmacies and third-party companies in the cannabis market have recently developed. Such models have been practised for many years outside the cannabis market. What is most important is that they are accepted by the regulatory authorities for pharmacies and comply with the strict national pharmaceutical and pharmacy laws.

In addition to the freedom of choice of patients to select physicians and pharmacies themselves, the above-mentioned prohibitions on (profit) participation and the specifications on outsourcing certain services must be observed.

According to the AMG, "pharmaceutical activities" may only be performed by a pharmacist or a pharmaceutical technical assistant. However, there are possibilities for outsourcing individual, non-pharmaceutical tasks in the fulfilment process to a third-party company, which can be operated in the form of a limited liability company.

Pharmaceutical activities include the development, manufacturing and testing of medicinal products and their dispensing to customers.
Non-pharmaceutical tasks include administrative and logistic tasks, the development of marketing strategies and IT support.

When planning and implementing these co-operation models, the challenge is to adhere to the rather narrow limits of what is permissible under pharmacy law in Germany.

Although pharmacy law in Germany is regulated uniformly in the ApoG, what is legally permissible can still differ between the federal states in Germany. The professional regulations for pharmacists can differ depending on the competent chamber of pharmacists, while the practice of the respective competent pharmacy supervisory authorities can also differ. The respective jurisdiction is determined by the location of the on-site pharmacy.

Therefore, the respective co-operation models should be co-ordinated with the respective competent supervisory authority.

Recreational cannabis in Germany and a glimpse into the future

The recreational use of cannabis is currently not permitted in Germany. However, a major hurdle for the legalisation of cannabis products for consumption purposes in Germany has been cleared since the last parliamentary election in 2021. The governing coalition of the SPD, the FDP and the GRÜNEN agreed on a coalition treaty in which they included the legalisation of cannabis products.

According to the treaty, distribution shall take place exclusively to adults and in licensed shops. Pharmacies and general retail shops are likely to be excluded from the circle of those entitled to dispense cannabis for recreational purposes.

This does not mean, however, that the co-operation models between pharmacies and companies lose their basis. The possibility that medicinal cannabis can continue to be dispensed through pharmacies does not seem to be blocked by the coalition treaty. In addition, it is likely that the costs for medicinal cannabis, unlike the costs for cannabis for recreational purposes, will continue to be covered by German health insurances. This suggests that these customers will continue to obtain the products in the medical field through pharmacies.


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