Parallel trade in medicines

  

Parallel imports, also called gray-market imports, are medicinal products produced genuinely under protection of a trademark, patent, or copyright, placed into circulation in one market, and then imported by an intermediary into a second market without the authorisation of the local owner of the intellectual property right. Parallel trade exists when there are significant price differences between countries, making this trade attractive, which is the case in the EU, where prices of medicines are not governed by free competition laws, but are fixed by the government.

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Overview

'Parallel trade' in the pharmaceutical industry occurs where drug prices vary from country to country due to national price regulation. In such circumstances, a wholesaler in 'lowprice' country A will be able to achieve a better price by selling its product in 'high-price' country B rather than on the domestic market in country A. Price differences can be due to either, national regulations, exchange variations or prices setting strategies by pharmaceutical companies.

Parallel importing is legal within the EU. 

Commission guidelines

In December 2003, the Commission issued a Communication on parallel imports of proprietary medicinal products for which marketing authorisations have already been granted. It aims to give guidance on practical applications of the principle of the free movement of goods to national measures relating to parallel imports, from one member state to another, of proprietary medicinal products for which marketing authorisations have already been granted in the member state of destination.

Parallel imports (within the EU) as a percentage of total pharma sales (data 
from 2001):

Country Parallel Imports
Greece 16.3 %
UK 15 %
Netherlands 9.9 %
Denmark 9.7 %
Sweden  9.3 %
Germany 4.7 %
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