GlaxoSmithKline told it has broken EU rules with its dual pricing policy in

In a move that had been anticipated as a result of a recent speech bythe European Commissioner for Competition, Mario Monti (Marketletter April 23), the European Commission has said in a statement on May 8 that it has "decided to prohibit the dual pricing system which Glaxo Wellcome (now GlaxoSmithKline) had introduced for all its pharmaceutical products in Spain." Effectively, this means that GSK has been found to have broken European Union antitrust rules.

Under the terms of GSK's arrangements in Spain, the UK company had been charging lower prices for its drugs to wholesalers distributing the products only in Spain (under restrictive Spanish pricing legislation) and higher ones to those which re-sell them on to other EU countries.

While the Commission has the authority to fine companies 10% of their global revenues for breaking antitrust rules, this is unlikely in the current case because GSK had notified the Commission (asking for a review of its procedures), and thus is unlikely to encounter any financial penalties, as were imposed on Bayer and Novartis when they were found guilty of similar practices in the past (Marketletters passim).