I. Parallel trade in the pharmaceutical market 1. Parallel trade, which is used to describe situations when goods are purchased in one country at a low price and then exported into another where the selling price is significantly higher, in pharmaceuticals exists mainly because of the peculiarities of the market which are the following: – Article 152 EC extends European Commission (Commission) competence only to a limited extent in relation to health policy. In the absence of harmonisation at community level, EU Member States enact and enforce rules aimed at controlling - directly or indirectly - the sales prices charged by pharmaceutical companies. – Several Member States have introduced measures to encourage parallel trade either through monetary incentives or through direct
Parallel trade in the pharmaceuticals market, which mainly concerns pharmaceuticals under patent protection, exists due to the peculiarities of the sector and the dramatic variation in pricing, reimbursement, sale and prescription conditions among EC Member States. To impede parallel trade, the pharmaceutical industry’s practices - such as supply quota systems and dual pricing mechanisms - have evolved and gained in sophistication since the European Commission’s first decisions. Through analyzing the Commission’s, the European Court of First Instance and the European Court of Justice’s policies on parallel trade in pharmaceuticals, the study first resolves the technical and legal questions arising from the application of Article 81 and 82 EC. The study then details the possible consequences of the European institutions’ controversial policy in this area by closely examining the Spanish Drug Law 25/1990 and the pending US re-importation bills.
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