Parallel imports of proprietary medicinal products

The volume of parallel imports of proprietary medicinal products within the European Union is significant, on account of differences in the prices set by national governments in the health sector. The Commission accepts that parallel trade is lawful based on the principle of the free movement of goods, provided that it does not pose a threat either to public health or to industrial and commercial property.

ACT

Commission Communication of 30 December 2003 on parallel imports of proprietary medicinal products for which marketing authorisations have already been granted [COM(2003) 839 - Not published in the Official Journal].

SUMMARY

The parallel import of a medicinal product involves importing the product into one Member State from another and then distributing it outside the distribution network set up by the manufacturer or his/her authorised distributor.

The Commission would emphasise that parallel imports are a lawful form of trade within the Internal Market based on the principle of the free movement of goods. In the pharmaceutical sector, parallel trade benefits from the divergence in prices set by national governments to control their health care expenditure. Whilst they are legal, parallel imports of medicinal products may be restricted if they constitute a risk to the protection of human health and life, and to the protection of industrial and commercial property.

This Communication aims to reaffirm the principle of free movement for the pharmaceutical sector and define the legal limits with respect to parallel imports.

Simplified procedure for the distribution licence

A parallel imported medicinal product may be distributed under a licence obtained through a simpler procedure than that for the initial marketing authorisation for the product, provided that the parallel sales do not pose a risk to public health. According to the Commission, this simplified procedure for parallel imports is justified by the fact that the product in question has already received a marketing authorisation on the basis of full technical information.

To qualify for the simplified procedure, the parallel imported medicinal product must satisfy two conditions. It must:

• have been granted a marketing authorisation in the Member State of origin; and
• be sufficiently similar to a product that has already received marketing authorisation in the Member State of destination.

The similarity between two pharmaceutical products is considered to be sufficient when the two products have been manufactured according to the same formulation, using the same active ingredient, and have the same therapeutic effects. A parallel imported medicinal product can also be distributed under the simplified procedure even if the similar product upon which its licence is based is no longer available on the market, provided that public health requirements are met.

Protection and exhaustion of industrial and commercial property rights

Industrial and commercial property rights in the pharmaceutical sector are essentially national in nature. The Commission considers it necessary to protect these, but also to prevent them from being misused in order to create monopolies. Protection is then superseded by the exhaustion of industrial and commercial property rights that constitute obstacles to intra-Community trade. As a general rule, a pharmaceutical patent is exhausted as soon as the product is marketed, which means that the manufacturer no longer has any rights over what happens to the product once it has been sold.

The Commission defines the right to the protection of industrial and commercial property in a restrictive way by recognising the manufacturer's right to control use of the brand but not necessarily of the product. Whereas counterfeiting can do direct damage to the brand, the parallel import brings free competition into the pharmaceutical sector in accordance with the principles of the internal market. The manufacturer's industrial and commercial property right cannot be used to prevent the parallel import of a medicinal product that has already been lawfully placed on the market in another Member State.

Protection of trademarks and repackaging

The Commission considers that the repackaging of a parallel imported medicinal product, either under the same or a different brand name, may be justified for reasons relating to language or size. In theory, repackaging can be contradictory to the industrial and commercial property rights that protect the trademark and its manufacturer. In practice, the Commission sets out five conditions under which the repackaging of a medicinal product does not infringe the rights of the proprietor of the trademark. The proprietor of the trademark may not therefore oppose the repackaging of a medicinal product when the following conditions have been met:

• the use of the trade-mark right by the owner contributes to the artificial partitioning of the internal market;
• the repackaging does not adversely affect the original condition of the product;
• it is stated on the new packaging by whom the product has been manufactured and repackaged;
• the presentation of the repackaged product is not such as to damage the reputation of the trademark and of its proprietor; and
• the proprietor of the trademark receives written notice of the repackaging before the new product is put on sale.

The Commission emphasises that repackaging must be a necessity, and not just be motivated by commercial interests. For example, repackaging is not justified for a parallel imported product that may be put on sale in the Member State of destination simply by changing the labelling. In addition, the proprietor of the trademark may require that the importer supply a specimen of the repackaged medicinal product so that he/she can check the condition of the product and its presentation.

Background

In this Communication, the Commission updates a Communication from 1982 with the substantial Court of Justice case law adopted in this field. Since the failure of a Commission proposal on parallel imports in 1981, the EU institutions have not managed to come to any legislative agreement in this field.

RELATED ACTS

Communication from the Commission of 6 May 1982 on parallel imports of proprietary medicinal products [PDF ] [Official Journal C 115 of 6 May 1982].

Communication from the Commission of 25 November 1988 on the single market in pharmaceuticals [COM(1998) 588 - Not published in the Official Journal].

Last updated: 06.10.2005