Glaxo Violated EU Antitrust Law In Greece

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imigran.jpgGlaxo violated European Union antitrust laws when it refused to fill orders placed by Greek wholesalers for several meds, according to an adviser to the EU’s highest court. Greek drugmakers had sued Glaxo as part of an eight-year long dispute over its refusal to supply them with three drugs in Greece and limit the stock they could export to higher-priced countries, Bloomberg News reports.

Drugmakers have been fighting parallel importation in which wholesalers buy meds at state-regulated prices in countries such as Greece then sell them in more expensive markets, such as the UK, and pocket the difference. The case is expected to clarify the rights of drugmakers, which claim the practice costs them more than $6 billion in lost sales each year, to control supply to parallel traders, according to Bloomberg.

“A pharmaceutical company holding a dominant position which refuses to meet the orders of wholesalers in order to limit parallel trade engages in abusive practice,” Damaso Ruiz-Jarabo, an advocate general at the European Court of Justice, said in a non-binding opinion. “In this case, there are no objective reasons relating to state intervention in the market which would excuse such conduct.”

In 2000, Glaxo cut off supplies of three drugs - Lamictal, Imigran and Servent - to Greek wholesalers and, instead, sent the drugs directly to Greek hospitals and pharmacies. The drugmaker later resumed sales to wholesalers, but only partially filled their orders. As a result, Glaxo was only shipping enough medication for the Greek market.

At a January hearing, Glaxo’s lawyers told the court that the volume of the wholesaler orders were “preposterous” and “exorbitant,” lawyers for Glaxo told the court at a hearing in January. This is the second time the case reached the EU court, which in 2005 rejected it because it had been referred by the Greek competition authority and not by a court. In a non-binding opinion in 2004, one of the court’s advocate generals said Glaxo’s practice doesn’t abuse the drug-pricing system in Europe under which the different nations set prices.

In addition to the dispute before the Greek competition authority, the wholesalers sued Glaxo in Greek courts in 2001. They accused the company of breaching EU antitrust rules. A Greek appeals court in 2006 referred the case back to the EU court for guidance on how much companies can restrict parallel trade. The Greek antitrust authority in 2006 decided that Glaxo should be allowed to restrict drug supply to the wholesalers.

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  1. It worked in Canada…..

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