Pharma firms accused of scuppering parallel trade

By Karen Carstens

Date: 22/04/04

PARALLEL traders are up in arms about new restrictive rules, which would prevent them from doing business in most of the ten countries joining the Union on 1 May.

The rules, which they claim have been pushed by large pharmaceutical firms, have been steamrolled into the accession treaties: "We weren't even consulted, and we're in effect the only stakeholders," said Donald MacArthur, secretary-general of the European Association of Euro- Pharmaceutical Companies, in what he called a classic case of the European Commission "passing the buck".

No one in the Commission's enterprise, market or any other directorate will admit, he claimed, to making the changes that mean parallel traders will face longer derogation periods and need to go through more arduous application procedures in the new member states.

The parallel trader is a wholesaler who takes advantage of price differentials in pharmaceuticals by buying cheaply in one member state and selling expensively in another. The practice is allowed if granted authorisation from governments.

But parallel traders must now also respect complex rules in the new member states, such as so-called supplementary protection certificates, which can add up to five years to the patent life of a brand-name pharmaceutical and protect it from parallel trading.

"This is bad law produced by the Commission," MacArthur claimed, which "discriminates between the EU 15 countries and the new member states because of the different supplementary protection measures".

The traders may end up taking the EU to court over the matter.

The Commission, however, sees itself as a guardian of parallel trade.

"Within the EU we most certainly intervene to facilitate parallel trade in pharmaceuticals," said Commission Internal Market spokesman Jonathan Todd. "We think parallel imports are a good thing."