the PARALLEL IMPORTS
Economic communities operate on the principle of free movement of goods amongst member states. Although it must still conform to certain regulations, the marketing of medicines does not escape this elementary rule basic to common markets.
1. The principle of the parallel import of medicines in the European Union
According to the European Commission, “The parallel import of a medicinal product involves importing the product into one Member State from another and then distributing it outside the distribution network set up by the manufacturer or his/her authorised distributor”.
This commercial practice is legalized in the Community market in virtue of the principle of the free movement of goods. It was recognized by the European Court of Justice as early as 1976.
This import does not require the prior agreement of the manufacturer.
For importing wholesalers, the main interest of these purchases concluded outside the official supply lines (hence the qualifier of “parallel”) lies in being able to take advantage of price differences from one country to another within the European Union. Indeed, drug prices are set freely by national Governments to control their health spending. Distributors can buy low-priced medicines in one state for resale in another where the price is higher.
2. A common practice
In the countries of the European Community, the price of a medicinal product can vary by 20 to 50% from one country to the other according to public policies.
Such variations are likely to stimulate the practice of parallel marketing in countries where drugs are traditionally more expensive.
The European Commission also said that “the volume of parallel imports of proprietary medicinal products within the European Union is significant”. In 2007, this trade was valued at 5 billion euros (IMS Health)
According to the International Pharmaceutical Federation (FIP), this commercial practice allows a trader to earn a margin of at least 10-15%.
3. Restrictions are possible, but are very limited and therefore rare
Parallel imports may be restricted in some specific cases: when they jeopardize the protection of human health and life, or the protection of industrial and commercial property.
Yet, Article 30 of the Treaty of Rome states that “prohibitions or restrictions shall not constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States”.
Member States are thus obliged to justify to the European Commission any refusal on their part to allow a product from another member state to enter their market. A judgment of the Court of Justice of the European Community also points out that such measures of restriction must be “proportionate and necessary”. (Case Adriaan de Peijper, ECJ, C-104/75, May 20, 1976).
For these reasons, restrictions are very rare.
4. Simplified procedures to facilitate parallel imports
A drug can be imported by an authorized pharmaceutical institution on the basis of a parallel import authorization (PIA) or a license to import. These documents are awarded by the national health authorities following a simplified procedure.
In the case where a drug has been approved at the European level via a procedure centralized by the EMA (European Medicines Agency), no PIA or special license is issued. EMA will mark its approval via a “letter” after reviewing the product information mentioned on the packaging and in the instructions for use.
According to the European Commission, “this simplified procedure for parallel imports is justified by the fact that the product in question has already received an authorization to be put on the market (AMM) based on complete technical information.”
In order to fall under the simplified procedure, the drug imported in parallel must meet two conditions:
- it must have received a marketing authorization in the Member State of origin;
- it should be sufficiently similar to a product which has already received a marketing authorization in the Member State of destination.
The similarity between two pharmaceutical products is considered sufficient when the two products are manufactured according to the same formulation, with the same active ingredient and for the same therapeutic effects. In addition, a drug imported in parallel can be distributed according to the simplified procedure even if “the like product from which it draws its license is no longer available on the market, provided that public health requirements are met.”
5. Problems raised in the context of the fight against counterfeit medicines
In the fight against counterfeit drugs, parallel imports, as practiced today within the European Union, pose the following problems: