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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. |
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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. |
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When, in general terms, are parallel imports of
brand products 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. |
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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". |
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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 and using the same active ingredients. |
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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 product takes place outside the distribution network of the manufacturer
or his licensee. |
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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. |
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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.
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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. |
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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. |
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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.
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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. |
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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'. |
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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. |
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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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