European Court of Justice Finds Dominant Pharma Companies May Not Prevent Parallel Imports by Refusing to Meet “Ordinary” Orders from Wholesalers

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The European Court of Justice (ECJ) ruled on September 16 that pharmaceutical companies that occupy a dominant position with respect to a particular drug may not refuse to meet “ordinary” orders from wholesalers in order to stop parallel imports.

Parallel imports have long been a thorn in the side of pharmaceutical companies operating in Europe. Pharmaceutical pricing in most member states is subject to some degree of direct or indirect regulation; as a result, prices can vary significantly from one Member State to another. This creates arbitrage opportunities for drug wholesalers that ship the drugs they buy in those countries where the price is low to countries where the prices are higher-to the detriment of the manufacturer and its distributors in the higher-priced countries.
At issue in the case was whether GlaxoSmithKline's Greek subsidiary could limit the amount of certain medications it sold to Greek wholesalers in order to prevent them from re-exporting the products to countries where the maximum selling price was higher due to national regulation.

The ECJ concluded that such a limitation by a dominant pharmaceutical company was potentially an illegal abuse under Article 82 of the EC Treaty.

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