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Brussels, 19th January 2004

Commission Communication on parallel imports of proprietary medicinal products frequently asked questions

(see also IP/04/65)

What is meant by the term "parallel imports" and when do they occur?

Parallel imports are products imported into one Member State from another and placed on the market in the destination Member State, outside the manufacturer's or its licensed distributor's formal channels. Parallel imports tend to occur when price levels for similar products between two Member States are significantly different, either as a result of national regulations or of manufacturers' policy. That creates an incentive for traders to buy products in the Member State where they are priced lower and sell them in the Member State where they are priced higher, at a price which allows the trader to make a profit.

What is the objective of this Communication?

To clarify, for the benefit of national administrators as well as of companies or individuals dealing with the marketing of medicinal products, EU law on parallel imports of proprietary medicinal products, based on the principle of free movement of goods as defined in the EC Treaty and on the relevant case law of the European Court of Justice.

When, in general terms, are parallel imports of medicines permitted?

When the product concerned is the same or very similar to a product already authorised for sale in the Member State into which it is to be imported.

What are the potential benefits from parallel imports?

Parallel trade in general is based on the principle of free movement of goods and has contributed to the development of the Internal Market to the extent that more products at different prices move from one national market to the other and are thus available to the purchaser. The Court has ruled (Case C 44/01 delivered on April 8, 2003 paragraph 63 of the judgement) that "in completing the Internal Market as an area without internal frontiers in which free competition is to be ensured, parallel imports play an important role in preventing the compartmentalisation of national markets".

How is "similarity" to an authorised product defined?

That has been clarified by the Court for the benefit of patients as well as national public health authorities. In particular, the product imported in parallel (i.e. after a first marketing authorisation has been granted by the Member State of destination) does not have to be identical in all respects to the product already marketed by the manufacturer but it should at least have been manufactured according to the same formulation, using the same active ingredients, and should have the same therapeutic effects.

Doesn't the word "parallel" imply something outside proper control?

No. Parallel imports are perfectly legal and are a direct consequence of differences in prices between EU Member States and of the development of the Internal Market which guarantees the free movement of goods. However, certain conditions must be respected, namely those derived from the need to protect public health. The word "parallel" simply indicates that the import and marketing of a medicinal product takes place outside the distribution network of the manufacturer or his licensee.

Can the Member State of destination stop or restrict parallel imports?

Yes, if they can establish that any restrictive measure aims at the protection of human health and life or the protection of industrial and commercial property (i.e. patents and trademarks). National authorities must also show that such measures are necessary and proportionate.

How can human health and life be effectively protected?

Member States have at their disposal several tools and procedures in order to safeguard public health and, in the case of medicinal products, a marketing authorisation is granted only after the product has been thoroughly checked. The marketing of a medicinal product having been authorised, it would be unnecessary, disproportionate, time consuming and costly to apply exactly the same procedure often involving extensive clinical tests - all over again to a product imported in parallel which is exactly the same or sufficiently similar to the one already authorised.

Clearly, however, national authorities are entitled to confirm that a product imported in parallel is indeed the same or sufficiently similar to the "reference product" the one already authorised for circulation in their market. The parallel importer is accordingly required to submit all relevant information.

If the authorisation for the "reference product" is withdrawn, can Member States also remove the relevant parallel import from the market?

When the authorisation for the reference product is withdrawn on grounds other than the protection of public health (for example, for reasons related to the marketing policy of the manufacturer), that should not automatically result in the withdrawal of the parallel import licence.

Can a manufacturer stop or restrict parallel imports?

The manufacturer or the owner of an industrial or commercial right may indeed ask the national authorities or courts of the Member State of destination to protect the specific subject-matter of these rights. In other words, a patent holder may seek protection of his exclusive right to use an invention with a view to manufacturing industrial products and putting them into circulation for the first time, either directly or by the grant of licences to third parties. But as soon as he markets his product for the first time in any one Member State, he loses his right to restrict the marketing of the product in other Member States (i.e. his exclusive marketing right is exhausted throughout the Internal Market, under the principle of 'Community exhaustion'). The parallel importer may then buy the product in one Member State and market it in another.

Can the parallel importer change the packaging of the product?

There are circumstances (e.g. difference in language) where certain alterations in the form of packaging are considered necessary for the medicinal product to be marketed successfully in the Member State of destination, in other words, in order to avoid the artificial partitioning of the Internal Market.

For this purpose, the parallel importer may change the packaging and may re-affix the trade mark on the new packaging or even replace it with the trade mark used for the same product in the Member State of destination provided that certain conditions are met. First, the original condition of the product must not be adversely affected. Second, it must be stated on the new packaging by whom the product has been repackaged and manufactured. Third, the presentation of the repackaged product must not be liable to damage the reputation of the trade mark and of its owner. Fourth, the proprietor of the trade mark must receive prior notice before the repackaged product is put on sale. The Court has provided guidelines for each of these conditions.

Can the parallel importer change the product itself?

No. Parallel importers cannot alter the essential characteristics of the product itself as that might result in a different product which consequently would not fall under the definition of a product imported in parallel.

Does the Communication cover prescription medicines as well as those sold without prescription?

Yes, the Communication covers all proprietary medicinal products, both prescription medicines and those sold 'over the counter'.

How is the law on parallel imports of medicines affected by the European Court's ruling on 6 January 2004 that Bayer was entitled to refuse to supply its drugs to wholesalers in certain countries?

This ruling concerns competition issues (private sector practices regarding supplies) and does not alter the Court's case law on free movement of goods or state measures regarding parallel imports. It does not, therefore, have any impact on the content of the Communication, which explains the rulings of the Court on free movement of goods.

Have all problems finally been resolved?

Not quite. Even though the Court has addressed many issues and despite the EU legislation that deals with general issues regarding the marketing of medicinal products, there are always new issues arising that can affect parallel imports. But remaining problems should be resolved on the basis of respecting what has already been achieved and continuous cooperation among EU institutions, national authorities and economic operators.

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