Parallel trade in pharmaceuticals and EC competition law

Abstract

Normally referred to as 'gray marketing', parallel trade consists in the importation of genuine products 1 by an unauthorised reseller into a country in which the same products were placed on the market by, or with the consent of the manufacturer. The legitimacy of the various methods employed by drug manufacturers to curb parallel trade has been the subject of much dispute over the years Chapter One of this thesis illustrates the specific features pertaining to the pharmaceutical market which distinguish it from other sectors in the Community. Chapter Two identifies the causes of parallel trade in pharmaceuticals and their beneficial or detrimental effects to all the stakeholders. An analysis is also carried out of the traditional approach adopted by the Commission in protecting parallel trade as an additional means of promoting the Single European Market objective. The application of Article 81 EC Treaty to the pharmaceutical industry's strategy of preventing or limiting parallel trade is dealt with in Chapter Three. Recent case-law2 is discussed highlighting the possible change in application of both Article 81 (1) and Article 81 (3) to the pharmaceutical sector. Chapter Four discusses the application of Article 82 EC to the pharmaceutical sector, analysing in particular the finding of abuse where the pharmaceutical undertaking refuses to supply its products or where the undertaking abuses of the ambiguity of the marketing authorisation legislation. To conclude, the implications of all the above is discussed, showing the inability of the European Courts to fully acknowledge that the prevalence of market integration in this specific sector may obliterate the future of pharmaceutical market.