Partial victory for GlaxoSmithKline in EU parallel trade ruling from Court

The European Court of First Instance (CFI) has partially annulled the European Commission Decision condemning UK-headquartered drug major GlaxoSmithKline's subsidiary Glaxo Wellcome Spain's policy of charging higher prices for drugs sold in that country but destined for export. The CFI ruled that the Commission had failed adequately to assess whether "dual pricing" could have benefited R&D and, therefore, have been eligible for exemption from European Union antitrust rules.

In March 1998, the Spanish unit adopted new general sales conditions which stipulated that its products would be sold to Spanish wholesalers at varied prices, dependent on whether they were to be reimbursed by the domestic health system or exported to another country, notably the UK, where prices are higher. In May 2001, the Commission decided that the conditions set out by GSK were prohibited by EU law as they constituted an agreement in restrictive competition (Marketletters passim).

The CFI concluded that the Commission was incorrect in ruling that the scheme was by its very nature restrictive of competition, and criticized the Commission for failing to take sufficient account of "the specific nature of the pharmaceuticals sector." It also accepted, as asserted by GSK, that "it cannot be presumed that parallel trade tends to reduce prices."