An End to Parallel Imports of Medicines? Comments on the Judgment of the Court of First Instance in GlaxoWellcome

Abstract

In September 2006, the Court of First Instance of the European Union (CFI) issued its judgment in the case opposing GlaxoSmithKline (GSK) to the European Commission. The Commission had found that the dual pricing system introduced by GSK violated the European antitrust rules (Article 81 of the EC Treaty), because it constituted an agreement with wholesalers whose object was to restrict competition by blocking parallel imports of pharmaceuticals. For the Commission, the agreement could not be exempted and was therefore to be prohibited. The CFI disagreed with the Commission and found that the agreement could qualify for an exemption. More importantly, the CFI ruled that, at least in the pharmaceutical sector, an agreement whose object is to prevent parallel imports by imposing a dual pricing system is not automatically contrary to Article 81, as it cannot be automatically inferred that the end consumer is harmed. This holding is highly questionable in view of the prior EU case law, prohibiting per se agreements with anticompetitive objects. Therefore, the change brought about by the CFI’s judgment could have major ramifications on the innovative pharmaceutical industry which is vigorously opposed to the principle of parallel imports.