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GSK slammed by EU Advocate General

GlaxoSmithKline (GSK) has been criticised by the EU Advocate General for exerting and abusing its dominance on the Greek market environment in its supply of medicines.
GlaxoSmithKline (GSK) has been criticised by the EU Advocate General for exerting and abusing its dominance on the Greek market environment in its supply of medicines.

Advocate General D·maso Ruiz-Jarabo has advised the European Court of Justice (ECJ) that GSK's practices amounted to anti-competitive conduct. Ruiz-Jarabo's opinion is non-binding and serves as an independent review for the consideration of presiding judges who have now begun deliberating the case.

After opting to discontinue provision to wholesalers, GSK supplied pharmacies and hospitals through a company called Farmacentre AE.

According to the ECJ, Ruiz-Jarabo advised that, "because of the industrial patents of pharmaceutical products, the holders of those industrial property rights can easily assume positions of dominance".

The Advocate General has proposed that, in reply to the preliminary ruling, the Court of Justice states that 'an undertaking in a dominant position, which refuses to meet in full the orders of wholesalers with a view to reducing the harm caused by parallel trade, thereby engages in abusive conduct'.

However, he did state that it was possible for a company to justify its conduct by showing that regulation of the market compelled it to behave in this manner.

According to the ECJ, Ruiz-Jarabo takes the view that, "apart from the description of the negative consequences of parallel trade, GSK has not indicated any positive aspect resulting from its cutting down on medical supplies to wholesalers."

Despite Ruiz-Jarabo's open criticisms of GSK's market practices in this case, laws and treaties pertaining to this area mean that the pharma company can still prove that it was objectively justified in selling through Farmacentre.

Dr Heinz Kobelt, secretary general of the European Association of Euro-Pharmaceutical Companies (EAEPC), said: "We welcome this important opinion from Advocate General Ruiz-Jarabo. We trust now other manufacturers will learn the lesson of this opinion and stop hindering the free movement of medicines inside the EU."

2nd April 2008

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