Pharmaceutical Technologist - November 2007 - (Page 10)

*Morpheus Who’s afraid of parallel trade? The grey market poses a quandary for the pharmaceutical industry. much do you about parallel Perhaps have mention Howwords you may knowheard someonetrade? these and have then switched off. In a sense, it’s hardly surprising given the fact that most media coverage centres on interpretation of complex legal cases. By the time you reach the end of these types of articles, you can’t work out what the mentioned companies were arguing about in the first place and on which technical details the case was judged. Yet, time after time, a legal ruling on a parallel trade issue rockets to the front pages of the pharmaceutical press and even, occasionally, the mainstream media. If you work for a pharmaceutical company it’s probably worth paying a bit more attention to the media’s coverage of parallel trade as it could affect your future livelihood. In fact, mention the two little words ‘parallel’ and ‘trade’ together and you’ll see that they strike fear into the heart of every senior industry executive trying to gauge future profits for their company. on a particular market by the original pharmaceutical manufacturer — as it is pretty likely they were not intending to allow someone else to sell on their product. Parallel trade is a complex and controversial issue that infuriates those running the pharmaceutical industry. After all, if they have invested millions of euro in research to bring a product to market, why should someone else benefit by selling it on? Well, unfortunately, in certain areas of the world the practice is considered acceptable depending on what’s known as the ‘concept of exhaustion of intellectual property rights’. Basically, once the owner of the goods has placed his products on the international market, there may come a point where the owner is no longer allowed to control the distribution of these goods. In effect, he has ‘exhausted’ his distribution rights by first sale of the goods. The big problem Parallel trade is possible in the EU providing certain legal requirements are met; this is a problem particularly when one considers that the EU is the world’s second largest regional market. The EU is very keen on the principle of free trade and this effectively means that there should be no obstacle to the free movement of goods between individual Member States of the EU. To aggravate the situation, there are various legal articles prohibiting agreements distorting competition. The grey market Parallel trade is often spoken of as the ‘grey market’. It involves the cross-border trade of a given product in parallel to a manufacturer’s official main supply chain in that country. If you are unfamiliar with parallel trade, you may be surprised that it can possibly exist — but it does, and is big business to those involved. Whether the practice can take place or not depends largely on the right to resell a product that has already been placed 10 November 2007 l pharmaceutical technologist

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Pharmaceutical Technologist Contents Editor's Comment News Morpheus Feeling the Pressure Legal Crusaders The Holy-Grail of Start-Up Biotech Special Feature Q&A

Pharmaceutical Technologist - November 2007

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