"The European Association of Euro-Pharmaceutical Companies (EAEPC) welcomes the European Commission's decision to appeal against the CFI's ruling from 27 September in the dual-pricing case concerning GSK. The EAEPC and its Spanish member Aseprofar also intend to file appeals in the coming days. This CFI ruling should not be left unchallenged. Although the CFI has clearly stated that Glaxo's dual pricing policy in Spain was conflicting with Art. 81(1) the court's ruling introduces confusion and complication to an issue which should be clear-cut. Two prices, one for a domestic market, and one for export, clearly run contrary to the spirit of the EU single market, also in the pharmaceuticals sector, and are unacceptable by themselves."
- Can be attributed to Mr. Kim Jensen, Chair of the legal working group of the EAEPC, the trade federation representing the interests of parallel distributors of medicines inEurope
Background
In its September ruling the CFI confirmed the principle that dual-pricing is anti-competitive and illegal, and acknowledged that parallel trade in medicines brings about consumer welfare. But it introduced confusion about the conditions under which dual-pricing can be prosecuted. If the CFI ruling goes unchallenged, the practical effect will be to make it unnecessarily difficult for the European Commission, and other competition regulators, to effectively apply EU competition rules to restrictive practices in the pharmaceuticals sector.
It should be up to industry to prove anti-competitive practices per se benefit innovation and hence the consumer. This is under no circumstances the regulator's job. In effect, the CFI proposes a radical shift in EU case law, with consequences far beyond the pharmaceutical sector.
The CFI is mistaken when it argues the pharmaceutical market is different from other markets in the areas of pricing and innovation. The introduction of sector-specific considerations opens a Pandora's box that could mean the end of the Commission's control over regulating competition in Europe. Each sector will be able to use this line of argument to get away with anti-competitive practices, thus undermining the foundation of the internal market.
The principles contained in this ruling will have a knock-on effect for other innovative industries, such as the technology sector.
The prices of prescription medicines are not "set" by governments. Manufacturers have significant pricing power. In addition, unlike in most other markets, governments end up footing the bill for prescription medicines, so it is anything but normal that they - as buyers - should have a say in pricing decisions.
Parallel trade may reduce sales, very slightly, of the innovative industry. But what proof is there that these companies would invest this small amount of lost revenue into R&D projects? None. There cannot be a direct link between parallel trade and innovation because the companies themselves are free to invest revenue where they see fit. Like other innovative products, medicines are rightly protected by patents, granting significant protection and guaranteed returns for innovation.
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Contact:
Dr. Heinz Kobelt, EAEPC Secretary-General
Mobile: +32 478 797 949