EU laws create ‘moving target’ for pharmaceutical sales

Date: 17/05/01

EU DRUGS lobby EFPIA says all member states intervene in their pharmaceuticals markets in different ways in a bid to keep prices down - thus feeding parallel trade.

It says most countries now refer to a carefully selected list of other member states when devising their price systems.

At first glance this may indicate governments' efforts to set fair levels of remuneration. But this is not always the case, claims EFPIA, "The selection of reference countries is always designed to suit the price levels sought by the authorities," says the lobby group in an internal document.

Countries also often resort to price freezes and reductions, usually imposed without consulting the industry.

The incentive for parallel traders is clear. EU laws allow them to sell drugs anywhere in the single market of 15 member states. If they find a country where prices for a certain drug are higher, they can make a profit on their sales elsewhere.

EFPIA's Brian Ager says regimes change almost daily, meaning today's target for the traders may be replaced by another the day after.

"We are staring at a moving target," he says. "They cherry pick, then they may come in and decimate a particular product line."

Drug companies, including GlaxoSmithKline, are suspiciously reluctant to stump-up figures for losses from parallel trade. But a 1996 study by UK research institute NERA, which targeted trade in the UK, Germany, Denmark and the Netherlands, said it represented more than 7% of their annual sales.

EU drugs lobby EFPIA says all member states intervene in their pharmaceutical markets in different ways in a bid to keep prices down - thus feeding parallel trade.