Commission urged to refer parallel trade complaint against Pfizer to Spain

The European Commission should, after a six-month reflection period, send the complaint filed by parallel medicines distributors against Pfizer to the Spanish competition authorities, the European Association of Euro-Pharmaceutical Companies (EAEPC) said.

The EAEPC, which represents the interests of parallel distributors in Brussels, filed a complaint against Pfizer in October 2005, accusing it of infringing European competition law by putting in place a deliberate strategy to prevent exports of medicines from Spain to other EU countries.

The association claims the US group sells its products at higher prices to Spanish wholesalers and grants them rebates if these products are then sold on the Spanish market and not exported. This amounts to a dual-pricing system, in contravention of community competition law, says the EAEPC. The European Commission declined to comment on the case.

After more than six months of silence, the competition services of the European Commission has finally sent a letter to the EAEPC, suggesting that the association file a complaint with the Spanish authorities, the Secretary General of the EAPC, Heinz Kobelt, revealed.

In its letter, "the Commission said that the practices of Pfizer in Spain are identical to the activities of the British group Glaxo Wellcome (now GlaxoSmithKline) in Spain," he said.

This allusion to Glaxo by the Commission implies that the latter considers Pfizer to be infringing the community competition regulations: in a previous decision, the Commission had in fact enjoined Glaxo to stop setting higher prices for the Spanish wholesalers for products destined for export, a practice that the British group began in 1988.

Glaxo appealed against this decision in 2001 before the Court of First Instance of the European Communities. The hearing for that case is scheduled for tomorrow (7 June) at the Court of First Instance of the European Communities in Luxembourg. However, the judges" decision is still likely to be some way off.

The EAEPC considers that the result of the Glaxo case will not be so significant for the parallel trade companies as for the European Commission itself. "It is very important for this decision to be satisfactory in terms of the Commission, particularly as regards its role as regulator (for competition)," said Kobelt.

The Commission has been extremely prudent since a setback inflicted by the judges in 2004 con-cerning the Adalat (nifedipine) case, a hypertension treatment by German company Bayer. The judges had refuted the arguments of the Commission, which stated that some of Bayer's practices, aimed at countering parallel trading, were illegal.

A commission spokesperson emphasised that since 1 May 2004, a new regulation has been in force concerning the application of competition rules. This regulation gives national competition authorities the capacity to apply the community competition rules. If there is a problem, particularly a national one, the case goes to the national authorities. In these cases, it is the European Commission which chooses whether or not to entrust the case to the national authorities.

According to the Commission, the complaint from the EAEPCabout Pfizer is still being examined: "We have not yet decided on the action to be taken with regard to this complaint," said the spokesperson.

The EAEPC does not wish to comment on its intentions with regard to a possible complaint in Spain, because the Commission still has to send it a formal response over the next few months. "We are waiting for the formal response from the Commission. All that we can say is that we want to go all the way," said the Association's Secretary General.