ECONOMY

Drug maker need not supply

BRUSSELS (Reuters) – GlaxoSmithKline Plc need not fill orders made by Greek drug wholesalers that are intended for export to higher-cost countries, a top EU court adviser said yesterday. Glaxo’s decision to restrict supplies to Greek wholesalers, so they could not resell drugs to other European Union states, did not necessarily amount to an abuse of a dominant position, recommended an advocate-general for the European Court of Justice. «Such behavior should not be considered abusive where the differences in prices of medicines between the member states are the result of state intervention and in the light of the specific circumstances of the European pharmaceutical market,» the court said in a press release on the advocate-general’s opinion. EU governments set drug prices and Greece’s have consistently been among the lowest in the bloc. Greek competition authorities had said Glaxo enjoyed a dominant position for at least one of the drugs involved, the anti-epilepsy medicine Lamictal, and had asked the court whether Glaxo was entitled to refuse to fill orders. But Advocate-General Francis Jacobs found that normal competition concerns did not apply to the pharmaceutical market and noted that parallel trade did not always benefit European consumers, since drug prices were fixed by states. «A requirement to supply would not necessarily promote either free movement or competition and could even harm the incentive for pharmaceutical companies to innovate,» the court statement said. The court is not obliged to follow the advocate-general’s legal opinion but this happens in most cases. Court rulings usually follow three to six months after an opinion. The European Commission, the EU’s executive, has supported the rights of trading firms to make parallel imports of branded medicines as part of the 25-bloc’s free internal market. But pharmaceutical companies say these imports cut profits, slowing investment in new drugs.