Drugs ruling sets precedent against parallel trade in EU

LONDON - GlaxoSmithKline has won its long-running court battle to restrict supplies of key drugs to Greece, setting a legal precedent in its war against parallel trade, which it denounces as drug profiteering.

Wholesalers filed the case with the Hellenic Competition Committee in 2000, arguing Europe's biggest drug maker was abusing its dominant position in restricting supplies of Imigran for migraine, Lamictal for epilepsy and Serevent for asthma.

Under European single market rules, suppliers are allowed to buy drugs cheaply in one country and sell them at a higher price elsewhere in Europe.

GSK said wholesalers in Greece exported a substantial proportion of its products to other states and that this was leading to shortages on the Greek market.

Supporters of parallel trade claim it encourages competition and benefits patients and health schemes by cutting prices for medicines overall, but GSK strongly denies this.

The Greek case was referred to the European Court of Justice in January 2003, which ignored the opinion of its advocate-general, Francis Jacobs, who said GSK's practice did "not necessarily" constitute an abuse of a dominant position, and referred the matter back to Greece's competition body.

Yesterday GSK celebrated its victory when the Hellenic Competition Committee ruled that GSK was not abusing its market position.

Andrew Witty, the head of European operations at GSK, said "This is a vindication of GSK's commercial policy in Europe. There is no evidence at all that any value is passed on to patients or payers as a result of parallel trade. The only people who make money are the parallel traders."

A separate case involving GSK which is related to a dual pricing issue in Spain is due to come to the European Court of First Instance in Luxembourg on 27 September.

- INDEPENDENT