Poland’s stance on drugs legislation sparks friction

By David Cronin

Date: 22/04/04

WITH only a few day to go before joining the EU on 1 May, Poland is irking European Commission officials and pharmaceutical firms by maintaining drugs legislation that penalizes the Union's producers.

A European Commission official has complained that Poland is unwilling to scrap measures that discriminate against pharmaceutical firms from the EU's current 15 member states.

Tax and customs authorities in Poland are currently considering imposing hefty fines on firms importing medicines in the country.

Industry sources say the authorities are considering this option based on investigations under a 2000 law, providing for import prices and the profit margins allocated to wholesalers and distributors to be negotiated with the national ministries of health and finance.

Although that legislation was repealed in 2002, the Polish authorities claim the customs value of drugs imported under it was overstated and subsequent tax and VAT declarations made by importing firms were inaccurate.

However, that view is not shared by the Commission. Fabrizeo Barbaso, its acting director-general for enlargement, has argued that the way Poland continues to apply a law the EU executive considers discriminatory contravenes the Europe Agreement, which paved the way for its eventual membership of the Union.

"We have undertaken considerable efforts at the highest level to urge the Polish government to reconsider its position and to unambiguously ensure the full respect of the Europe Agreement," he wrote to the Association Council, which handles relations between the EU and Poland until the country joins the Union. "However, the Polish government does not seem to be willing to make any commitments in this respect.

"Contrary to our position, Poland considers its legislation non-discriminatory and appears to be ready to apply its legislation, which could result in the risk of very high fines for EU firms involved."

Barbaso advocates that an arbitration procedure be undertaken with a view to ending the row.

The Commission is attempting to clinch a last-minute deal with Poland before it joins the EU.

"It is regrettable that two years of diplomatic efforts could not stop the unjustified investigations and the threat of enormous fines," said an industry source.

The Poles, who have one of the largest generic pharmaceutical industries in Europe, have been eager to prevent the costs of medicines rising due to imports of branded drugs.

An official from the European Commission has complained that Poland is unwilling to abolish measures that discriminate against pharmaceutical companies from existing Member States.