Analysis: “VAT Base Reductions in complex Pharmaceutical Contributions Schemes: Novo Nordisk AS (C-248/23)”

On 12 September 2024, the Court of Justice of the European Union (the ‘Court of Justice’ or the ‘Court’) handed down a judgment in  Novo Nordisk (C-248/23). In this case the Court deals with a question whether ex lege payments made by pharmaceutical company to the public health insurance system, related to public supply of medicinal products, is eligible for the reduction of taxable base of the Value Added Tax according to Article 90 of Directive 2006/112/EC (‘VAT Directive’).

Novo Nordisk is a Danish manufacturer and distributor of medicinal products. It sells its products through wholesalers, who then sell them to pharmacies, who in turn sell them to patients. In this case, the medicines are sold at a price that is subsidised by