Bayer fine highlights ‘parallel’ trade issue

Date: 28/03/1996

GERMAN pharmaceutical company Bayer will attest to the problems thrown up by diverse drugs pricing in Europe.

In January, the firm was fined 3 million ecu by the European Commission for violating the EU's rules against restrictive practices outlawed under Article 85 of the Treaty of Rome.

This followed the company's refusal to supply its Adalat heart drug to French and Spanish wholesalers who wanted to re-export it to the UK, where the price of the drug was higher.

The Commission says Bayer, worried by this 'parallel' trade in Adalat since the end of the Eighties, had set up a system for tracing the activities of exporting wholesalers.

To the German company, this was a serious matter, since Adalat is its second most important drug with annual sales revenue of close to one billion ecu.

According to the Commission, Bayer stopped supplying wholesalers in Spain with the quantities they ordered as early as 1989 and, in France, from September 1991.

Becoming wise to Bayer's monitoring, the wholesalers began to spread their orders through a series of agencies and smaller companies, but when these were discovered by the manufacturer, the small wholesalers were punished with successive supply reductions.

Bayer has lodged an appeal against the fine.