ECJ decision on GSK vs European Commission on parallel trade of pharmaceuticals

The European Court of Justice yesterday told the Commission, see the full decision here, to review the GSK case on parallel trade. The background is that GSK in Spain have had two tariffs to limit parallel trade. Now the court have clearly stated that efforts to limit parallel trade is illegal but that the Commission should have done a better investigation on GSK application for exemption in this case.

Parallel trade as I see it is when it applies to jeans or wii games a natural development of the market. I would have expected the European Commission to grant an exception in this case since when it comes to the area of pharmaceuticals the situation is slightly different compared to the products paid for by the consumers directly. Pharmaceuticals prices are regulated by the governments and some countries can afford or are prepared from cultural geographical etc reasons to pay more than others. And they should in order to facilitate for poorer countries to get a better price. This means that richer countries healthcare systems should not be allowed to free-ride on these countries lower prices. See my earlier blog on differentiated pricing here.

Some of the legal comments can be found here from Morgan Lewis and from the EU law blog here.