UPDATE: EU Court: Curbs On Pharmacy Ownership Are Valid

Europe's highest court decided against deregulating the European pharmacy market Tuesday, ruling that German and Italian laws restricting who may own and operate a pharmacy are justified under European law.

"Ownership and operation of pharmacies can be restricted to pharmacists alone," the European Court Of Justice said in a statement.

"Italian and German legislation laying down such a rule is justified by the objective of ensuring that the provision of medicinal products to the public is reliable and of good quality."

The ruling is bad news for Europe's large pharmacy-owning and medical mail-order companies including the U.K.'s Alliance Boots PLC and Germany's Celesio AG (CLS1.XE), which owns the U.K.'s Lloyds Pharmacy, as well as wholesaler Phoenix Pharmahandel AG.

These pharmacy giants, along with drugstore chains that don't make up prescriptions, such as AS Watson and Schlecker, and retailers such as France's Carrefour SA (CA.FR), the U.K.'s Tesco PLC (TESO)and U.S. giant Wal-Mart Stores Inc. (WMT), are keen to expand their pharmacy operations across Europe, but have been barred from countries with ownership restrictions.

Countries including Germany, Italy, Spain, Austria, Portugal, and Bulgaria limit pharmacy ownership. In most of these countries, only independent, licensed pharmacists can own pharmacies. In Germany and Portugal, owners are limited to owning four pharmacies. Austria excludes companies from owning pharmacies.

The ruling is also a blow for the European Commission, the European Union's executive arm, which has sought to open the bloc's pharmacy market to more competition and has issued formal decisions finding many national restrictions on the sector unjustifiable.

By Mike Gordon,Dow Jones Newswires; +352 691 180 766; mgordon.dowjones@gmail.com

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