Healthy Skepticism Library item: 1422

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Publication type: news

Kanter J.
EU Court's Top Adviser Backs Drug Discounters
The Wall Street Journal 2003 Sep 11

Full text:

BRUSSELS — In a blow to the pharmaceuticals industry, a top legal adviser on Thursday recommended making discount drugs easier to sell in Europe.

Advocate General Antonio Tizzano of the European Court of Justice, based in Luxembourg, said German practices blocking some cut-price imports are illegal.

The decision, which still must be reviewed by the full court, could significantly expand the trade in discount medicines in Europe by loosening rules on national import licenses.

European law “opposes obstacles imposed by member states against parallel imports of specialty medications,” Mr. Tizzano wrote in the preliminary decision.

The opinion is an important development in the long-running battle between importers and drug makers in the European Union.

Since the 1970s, the pharmaceuticals industry has been fighting discounters who buy batches of medicines in southern EU countries, where they are cheaper, and sell them in northern EU countries such as Germany.

The practice, known as parallel trading, earns discounters at least ?4 billion ($4.5 billion) a year, which drains profit from big pharmaceuticals companies, according to IMS Health Consulting in London.

EU officials and jurists mostly support the discounters for promoting market competition and providing lower drug prices for patients.

Thursday’s case dates to 1994, when German importer Kohlpharma asked Germany’s medical agency for permission to import a Parkinson’s disease drug, Jumex, from Italy. The agency turned Kohlpharma down on the grounds Jumex didn’t meet German safety standards.

Kohlpharma objected and took the German agency to court. Kohlpharma said the agency already allowed the marketing of a similar substance called Movergan, a product made by Orion Yhtyma Oyj of Finland. Kohlpharma said its Italian import Jumex should qualify because it contained the same active ingredient as Movergan.

The advocate general agreed with Kohlpharma. Jumex and Movergan are “bioequivalent, and in light of scientific findings don’t present any significant differences in terms of safety or effectiveness,” Mr. Tizzano wrote.

Orion’s managing director in Germany, Klaus Mecklenburg, said the opinion would have a minimal effect on company profit because Orion is doing less business in Movergan. But he acknowledged the court’s final ruling “could have an effect on the industry in the future.”

Kohlpharma is “very pleased,” said the company’s lawyer Thilo Bauroth. Thursday’s opinion “extends the possibilities for parallel trade in Europe,” Mr. Bauroth said.

Final judgment in the case is expected later this year. The full court follows the advocate general’s opinion in about 80% of cases.