The European Court Of Justice Upholds Lawfulness Of Parallel Trade Of Medicinal Products

6 October 2008

The Court determines that limiting sales of medicinal products to wholesalers in order to curb or block the reselling of products in other EU countries constitutes an abuse of a dominant position.

The Court thus questions the direct distribution model for certain medicinal products which have an established supply limit for distributors, so that distributors can meet the needs of the local pharmacies but not retain enough products for export.

The Court ruled that Article 82 EC should be interpreted as meaning that a company that occupies a dominant position in the pharmaceutical market abusively exploits this dominant position when it refuses to fill orders from wholesalers in an effort to curtail parallel exports from wholesalers to other member states.

Even though the ruling hit the pharmaceutical industry hard, the decision does confirm that a pharmaceutical manufacturer should be able to defend their own commercial interests when they are facing abnormally large orders. The fact that the court determined that the laboratories are not obligated to offer excessive quantities of their products has been positively interpreted by the pharmaceutical industry.

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