European Court provides unclear ruling on anti-parallel trade action by GSK

The European Court of Justice has been accused of "another piece of rather clumsy sidestepping" on the issue of the extent to which drugmakers may restrict supplies of their products to wholesalers in order to limit parallel trade, according to Edward Miller, a competition law expert at international legal firm, Reed Smith. He added that "the result will be more litigation and more uncertainty in the market as to the permissible scope of parallel trade. In short - business as usual."

A law suit was originally brought against GlaxoSmithKline AEVE, the Greek subsidiary of the UK-headquartered pharmaceutical major, by wholesalers in Greece that engage in the re-export of medicines to other European Union countries. This followed an attempt in 2002 to have a complaint to the Greek Competition Commission referred to the ECJ. What is not disputed is that price controls by the Greek authorities make it profitable for drug wholesalers to place orders for branded products to be delivered locally, before being re-sold in one of the less price-regulated EU member states (Marketletters passim).

Price controls do not justify drugmakers refusal to supply parallel traders, ECJ rules