The recent legislative reforms regarding the ownership status of pharmacies together with the onerous debt of the National Organization for Health Care Services against pharmacists and the lack of funding from the banking system have created an unstable and uncertain environment for drugstore owners and have led to increasing shortages of essential medicines due to the inability of pharmacy proprietors to bear the burden of supplying the Greek market with sufficient quantities of pharmaceutical products. The assemblage of the aforementioned factors has driven not only pharmacist but also wholesalers and pharmaceutical companies to the solution of the parallel importation and trade of medicinal products from third countries where pharmaceutical products are manufactured and sold at remarkably lower prices. In that way, they are able to profit by selling the imported cheaper products to higher prices as exist in the Greek market.
Parallel trade is a lawful form of trade in goods between Member States of the European Union based on the principle of the free movement of goods within the Internal Market (Art. 34-36 of the Treaty on the Functioning of the European). The European Union, by setting general principles relating to parallel importation and marketing authorisation of goods applicable to all its Members, aims to remove trade barriers between EU countries. In accordance with Art. 7 of TRIPS Agreement whose objective is to remove trade barriers “to the mutual advantage of producers and users of technological knowledge”, the TFEU contributes to the harmonisation of the Internal market.
The significance of parallel importation has been emphasized by the European Court of Justice. According to the Court’s jurisprudence, pharmaceutical products are not exempted from the general law of free movement, unless imported medicines are proved harmful to human life and health. Pursuant to the doctrine of exhaustion of rights, the proprietor of an industrial and commercial property right protected by a State’s legislation may not rely on that legislation to oppose the importation of a product which has been lawfully placed on the market in another Member State by, or with the consent of, the proprietor of that right. In that context, E.U. has set a simplified procedure to facilitate and expedite the marketing authorisation of medicinal products that are already licenced in other Member States.
The principal of parallel importation does not negate the role of national authorities regarding the licensing process. According to the Greek National Organisation for Medicines, a medicinal product that has been licenced by another Member State’s authority can be put on the Greek market under the “mutual recognition” procedure and without conducting any further clinical trials only after it is granted marketing authorisation by the Greek competent authority.
The principal does not deprive EU members and, thus, Greece of their right to prohibit the importation and sale of a product if such measure is deemed necessary to safeguard public health and protect the industrial and commercial property. Nevertheless, a country can resort to such a stringent measure only if less severe and invasive measures are found insufficient and ineffective. In certain circumstances, national authorities are entitled to request the repackaging of a medicinal product, before put on a country’s market, so as to comply with its national legislation. In that case, the proprietor cannot oppose to the repackaging, unless he can prove that the alteration of the external of the medicine is likely to adversely affect the original condition of the product. In case the repackaging is deemed necessary, it is required that both the manufacturer and the person who repackaged are stated on the new packaging. In addition, the marketing authorisation holder must give prior notice to the manufacturer before the repackaged medicine is put on the market and he may be asked to supply the proprietor with a specimen to enable him ensure that the repackaging has not indirectly affect the original condition of the product.
In a nutshell, despite the system’s weaknesses that may discourage original manufacturers that bear the brunt of the total cost of R&D for the production of innovative medicines, it becomes apparent that parallel importation has important advantages for all healthcare operators that justify its enactment by the TFEU. In addition to the elimination of trade barriers and the creation of a harmonised European market, parallel importation can contribute to the direct reduction of branded medicines’ prices. Moreover, it can serve as a strong bargaining tool used by healthcare stakeholders against original manufacturers to achieve lower prices. To preserve the system’s benefits, it is indispensable that national authorities of importing States adopt strict policies to combat counterfeits that would jeopardize the legitimacy of parallel importation and would nullify its legitimacy and usefulness.
Natalia Kapsi