How to React to Parallel Trade

Table of Contents

• 1.1 Basics
• 1.2 How it works
• 1.3 How it began
• 1.4 How it developed
• 1.5 The scale of the issue
• 1.6 Arguments for and against

• 2.1 National regulatory approval
  • 2.1.1 Criteria employed
  • 2.1.2 Application procedure
  • 2.1.3 Assessment
  • 2.1.4 Conditions
• 2.2 Parallel distribution of centrally-approved medicines
• 2.3 Specific mechanism
• 2.4 Repackaging/re-labelling
  • 2.4.1 Trademarks
    • 2.4.1.1 The BMS case
    • 2.4.1.2 The Boehringer case
  • 2.4.2 Copyright
  • 2.4.3 Quality concerns

• 3.1 Impact on investment in R&D
• 3.2 Impact on launch decisions
• 3.3 Shortages created by parallel exporting
• 3.4 Savings from parallel trade
• 3.5 Counterfeits and parallel trade
  • 3.5.1 Industry view
  • 3.5.2 Other contributors
  • 3.5.3 Traders' response
    • 3.5.3.1 UK
    • 3.5.3.2 Germany
    • 3.5.3.3 Denmark
  • 3.5.4 Evidence
• 3.6 Diversion of compassionate relief supplies

• 4.1 Major countries of destination
  • 4.1.1 Denmark
  • 4.1.2 Finland
  • 4.1.3 Germany
  • 4.1.4 Netherlands
  • 4.1.5 Norway
  • 4.1.6 Sweden
  • 4.1.7 United Kingdom
    • 4.1.7.1 PL(PI) scheme
    • 4.1.7.2 Savings
    • 4.1.7.3 PPRS
• 4.2 Major source countries
  • 4.2.1 Greece
  • 4.2.2 Spain
  • 4.2.3 Other countries
    • 4.2.3.1 Austria
    • 4.2.3.2 Belgium
    • 4.2.3.3 France
    • 4.2.3.4 Portugal
    • 4.2.3.5 Poland

• 5.1 Main manufacturer counter-strategies to PT
• 5.2 Risks
  • 5.2.1 Commercial risks
  • 5.2.2 Legal risks
    • 5.2.2.1 Treaty of Rome
    • 5.2.2.2 Directive 2004/27/EC
  • 5.2.3 Summary of legal processes

• 6.1 Price corridors
• 6.2 Euro-based pricing
• 6.3 Price reductions
• 6.4 Brand equalisation deals
• 6.5 Dual pricing
  • 6.5.1 GW' s scheme
  • 6.5.2 Pfizer' s scheme
    • 6.5.2.1 Article 100
    • 6.5.2.2 Pfizer makes changes
    • 6.5.2.3 Royal decree
• 6.6 Free pricing with rebates
  • 6.6.1 Pan-European opportunity
  • 6.6.2 National opportunities

• 7.1 Export prohibition
• 7.2 Stock allocation
  • 7.2.1 Article 81: The Adalat case
  • 7.2.2 Article 82
    • 7.2.2.1 Relevant product market
    • 7.2.2.2 The Syfait case
    • 7.2.2.3 France' s Competition Council
  • 7.2.3 Where are we now?
• 7.3 Direct distribution
  • 7.3.1 Involvement of wholesalers in PT
  • 7.3.2 Examples of direct distribution

• 8.1 Don' t rush to ‘do something'
• 8.2 Don' t forget to use your full rights
• 8.3 Don' t let lawyers drive the agenda (but do take early legal advice)
• 8.4 Supply management schemes can work (and stay within the law)
• 8.5 Responding to incoming PT with price cuts is generally not advisable
• 8.6 Dual pricing opportunities exist (but mainly in Spain)
• 8.7 Emphasise to payers that savings from PT are very limited
• 8.8 Emphasise that savings to patients are almost non existent

• 9.1 United States
  • 9.1.1 Personal importation
  • 9.1.2 Legislative attempts
    • 9.1.2.1 Bipartisan bill
    • 9.1.2.2 Impact limited?
• 9.2 Switzerland
• 9.3 Israel
• 9.4 Philippines

• 10.1 No single European price
• 10.2 Waning EU support
  • 10.2.1 European Commission
  • 10.2.2 ECJ
  • 10.2.3 European Parliament
  • 10.2.4 EMEA
• 10.3 National drivers and restraints remain important
• 10.4 EU enlargement less of a threat
• 10.5 No product now immune
• 10.6 No country now immune
• 10.7 Manufacturers regaining control of distribution
• 10.8 Changes among parallel traders
  • 10.8.1 Diversification
  • 10.8.2 Exits
• 10.9 Prospects for US

REFERENCES

APPENDIX 1: ECJ JUDGMENTS ON PHARMACEUTICAL PARALLEL TRADE

APPENDIX 2: EUROPEAN ASSOCIATION OF EURO-PHARMACEUTICAL COMPANIES (EAEPC)

APPENDIX 3: EAEPC GOOD PARALLEL DISTRIBUTION PRACTICE GUIDELINES FOR MEDICINAL PRODUCTS

APPENDIX 4: PL(PI) LICENCE HOLDERS IN UK

• Table 1.1 EU member states
• Table 1.2 Commercial versus personal importation
• Table 1.3 Principal outcome of pharmaceutical parallel trade cases at ECJ
• Table 1.4 Evolution of parallel trade (% of pharmacy market sales)
• Table 1.5 Value of PT in medicines (€ million) at pharmacy purchase prices, 2002
• Table 2.1 Parallel distribution notifications to EMEA, 2004-2006
• Table 2.2 Introductory dates for patents and SPCs in CEE countries
• Table 3.1 Direct savings from parallel trade (€ million)
• Table 4.1 Evolution of PT penetration in Germany
• Table 4.2 Numbers of applications and regulatory approvals for PIs in the Netherlands
• Table 4.3 Evolution of PT penetration in the Netherlands
• Table 4.4 Evolution of PT penetration in Norway
• Table 4.5 Evolution of national PT regulatory approvals in Sweden
• Table 4.6 Evolution of PT penetration in Sweden
• Table 4.7 Evolution of PT penetration in the UK
• Table 4.8 Number of PL(PI)s issued in UK
• Table 4.9 Top-10 UK importers by numbers of PL(PI)s issued January 2005-June 2007
• Table 4.10 Country of origin of PL(PI)s approved to November 2002
• Table 4.11 Impact of price modulation with 2005 PPRS on PI penetration of selected brands
• Table 4.12 Evolution of parallel exports from Greece
• Table 4.13 Decline in the Spanish wholesaler margin
• Table 5.1 Main PT counter-strategies
• Table 5.2 National competition authorities in the EU
• Table 6.1 Hitting PT, or the bottom line?
• Table 6.2 Glaxo Countdown to an EU stalemate
• Table 6.3 Specimen annex 1/annex 2 price differences offered by Pfizer Spain, June 2005
• Table 6.4 ‘Dual pricing' schemes in Spain
• Table 7.1 Syfait - Countdown to a non-decision
• Table 7.2 Turnover of French ‘export-only' wholesalers (€ million), 2002
• Table 7.3 Export sales of leading French wholesalers, € million
• Table 8.1 Time delays before parallel trade judgments have been decided by the ECJ
• Table 9.1 Top 10 drug classes sold to Canada-US cross border pharmacies, 2004