| Author (Person) | Mallinder, Lorraine |
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| Series Title | European Voice |
| Series Details | Vol.12, No.21, 1.6.06 |
| Publication Date | 01/06/2006 |
| Content Type | News |
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By Lorraine Mallinder Date: 01/06/06 The EU's pharmaceutical industry will be watching closely this week (7 June) as GlaxoSmithKline (GSK) launches an appeal in the European Court of First Instance against a 2001 Commission ruling disallowing the practice of dual-pricing in Spain. What is at stake is not just the original ruling, say GSK's competitors, but the credibility of the Commission as an arbiter of fair play. In 2001, the pharmaceuticals giant, then named Glaxo Wellcome, notified the Commission of its plans to introduce a staggered pricing scheme for wholesalers in Spain. Under the scheme's terms and conditions, wholesalers would be contractually obliged to pay more for products that it went on to sell outside Spain. The lower price, in the form of a discount, would only apply if wholesalers could prove that products had been sold inside Spain. The scheme was intended to discourage parallel trading, a practice whereby wholesalers charge different prices for domestic and foreign markets. Pharmaceutical companies complain that this practice eats into their profit margins as parallel traders are able to undercut prices abroad. A spokesperson for GSK said: "In some countries, there is [the] practice by traders of buying medicines at low government-controlled prices and importing them into countries where prices are higher. This undermines the local GlaxoSmithKline business in the importing countries where prices, which we believe are reasonable, have been agreed with governments." Parallel traders argue that the practice, which has a turnover of 4-5 billion euro annually, drives competition in the pharmaceuticals sector, encouraging investment and innovation in an industry where major players are assured a leading market position through the sale of patented products. Heinz Kolbert, secretary-general of the European Association of Euro-Pharmaceutical Companies (EAEPC), an organisation representing parallel traders, said: "This is a crucial case, not so much for parallel traders, but for the integrity of the Euro Article anticipates the launch of an appeal on 7 June 2006 by GlaxoSmithKline (GSK) in the European Court of First Instance against a 2001 European Commission ruling disallowing the practice of dual-pricing in Spain. According to GSK's competitors, not just the original ruling was at stake, but the credibility of the European Commission as an arbiter of fair play. |
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| Source Link | http://www.european-voice.com/ |
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| Subject Categories | Business and Industry |
| Countries / Regions | Spain |
