Impact of Pricing Policies on Pharmaceutical Parallel Importation in Europe: The GSK Cases, Slides of Competition Law and Policy

Download Impact of Pricing Policies on Pharmaceutical Parallel Importation in Europe: The GSK Cases and more Slides Competition Law and Policy in PDF only on Docsity! Pricing policies for pharmaceuticals in Europe and their impact upon parallel importation The GSK Cases Docsity.com GSK Spain (Art. 101 TFEU) •Glaxo: state-fixed prices are for medicines that are to be used and paid for in one country’s healthcare system; if they are to be exported → open negotiation with wholesalers •1998 – notification to the European Commission •2001 – Commission prohibition Decision •2001 – GSK Appeal •2006 – GenCt Judgment (partial annulment) •2006 – Appeals to the ECJ •2009 – Spanish authorities decisions (free pricing) •2009 – ECJ Opinion & Judgment Docsity.com Why Is This An Issue? •Extra-ordinary differences of price – e.g. Athens Court of First Instance (Lelos): “Indicatively, based on the calculations of the plaintiffs themselves in their actions, their selling price of Imigran Tabl F/C 2 X 100 mg was 3,229 drachmas (with purchasing price 3,133.7 drachmas) in Greece and 5,968 drachmas in Europe, the one of Imigran Tabl F/C 4 X 50 mg was 3,229 drachmas (with purchasing price 3,133.7 drachmas) in Greece and 5,776 drachmas in Europe…..” – e.g. in Bayer/Adalat between 1989 and 1993, the prices fixed by the Spanish and French health services were, on average, 40% lower than prices in the United Kingdom •Shortages in place of export / risks for the supply of the local market Docsity.com Who Benefits? Who Loses? •Important gains for traders and pharmacists •Minimal benefits for patients and payers – e.g. “Clawback” savings – less than 10% of the price difference represents savings for payers •Losses – less money for R & D •Competitiveness of the European pharmaceutical industry – DG-Enterprise (see e.g. Pricing Working Group Report of June 2007) Docsity.com GenCt in GSK Spain – Main Findings I •GSK Spain - GenCt  Art. 101(1) TFEU - Not an “object” infringement – special legal & economic context – no naked restriction of exports – freedom to export at the normal price – Spanish legislation → no intention to be exported (old Art 100 L. 25/1990 now Art 90 L. 29/2006) “Spanish state-fixed prices only applicable to products dispensed and reimbursable by the State in Spain” Art. 101(1) TFEU – “Effect”: some benefits Docsity.com ECJ in GSK Spain – Main Findings I •Art. 101(1) TFEU reversal •Importance of market integration (¶ 61) - restrictions of parallel trade constitute restrictions by object – also in the pharmaceutical sector (¶¶ 59-60). •Direct harm to end consumers not necessary for object restrictions ≠ GenCt •Article 101 aims to protect not only the interests of competitors or of consumers, but also the structure of the market and, in so doing, competition as such (¶¶ 62-63) •Art. 101(3) TFEU confirmation •Commission must take into account the nature and specific features of the pharmaceutical sector when carrying out its assessment under Art. 101(3) TFEU (¶ 103) •Restrictions to parallel trade are not per se violations in that they are susceptible to be justified under Art. 101(3) TFEU Docsity.com ECJ in GSK Spain – Main Findings II •Art. 101(3) TFEU confirmation • Improper analysis under Art. 101(3) TFEU: Commission examined only whether parallel trade gives rise to a loss of efficiency and failed to consider whether the agreement could also entail a gain in efficiency (¶¶ 131, 157). •Likely positive effects is the correct test: whether in the light of the factual arguments and the evidence provided, it seems more likely either that the agreement in question must make it possible to obtain appreciable advantages or that it will not (¶ 94). •Link with R&D investment: It is not necessary that all of the additional funds saved by hindering parallel trade must be invested in R&D (¶ 102) ≠ Commission Docsity.com ECJ in GSK Spain – Main Findings III •Art. 101(3) TFEU confirmation •GenCt findings on burden & standard of proof fully upheld: Undertaking must employ “convincing arguments and evidence” → Commission must “adequately examine those arguments and that evidence”, conduct a “proper examination”, “validly take into account all the factual arguments and the evidence pertinently submitted” by an undertaking, and refute certain of those arguments, especially if they are “sufficiently relevant and substantiated to require a response” or if they are “relevant, reliable and credible, having regard to their content” (GenCt, ¶¶ 235, 236, 263, 303) Docsity.com