EAEPC to sue Janssen-Cilag in Spain over dual pricing

The European Association of Euro-Pharmaceutical Companies (EAEPC), which represents parallel trade groups, has decided to sue Janssen-Cilag in Spain for its dual pricing measures.

According to its general secretary, Heinz Kobelt, the EAEPC is also considering bringing a lawsuit against Pfizer in the UK, claiming that the US group is preventing British parallel import groups from buying its products.

The European parallel trade lobby intends to use this lawsuit, which could be ready next month, to protest against a dual pricing mechanism that Janssen Cilag intends to apply to about 40 of its products in Spain.

To pull the rug out from under parallel traders' feet, several pharmaceutical groups, including Pfizer, have set up dual pricing measures in Spain, making wholesalers there pay higher prices for medicines intended to be sold in other European markets. Their aim is to stop medicines being resold by parallel trade companies in EU markets where they are more expensive, with the parallel traders pocketing the difference. This is perfectly legal under the EU principle of the free circulation of goods.

The EAEPC says that Janssen-Cilag has recently started to ask Spanish wholesale distributors to sign an agreement on dual pricing. 'We wrote to Janssen-Cilag telling them that dual pricing was a restriction of inter-community trade and was therefore contrary to free circulation..They replied that this was not a measure against parallel trade,' said Kobelt.

The EAEPC intends to file this complaint alone, as it says that Spanish wholesalers may fear retaliatory measures. However, the association also says that it may find 'allies' in the Spanish pharmacists' association, FEFE, which 'is beginning to understand the importance of parallel trade in Spain'.

Another US company, MSD, recently confirmed that it will be setting up a dual pricing system in Spain in Februry for 14 of its products. Under this system, wholesalers will receive a rebate on the difference between the 'European price' and the Spanish price if they can prove within 60 days that the product has been sold on the Spanish market.

However, the EAEPC does not intend to sue MSD. 'In our opinion, MSD is at a stage where it has no actual contracts [with wholesalers]; MSD has only declared its intentions,' said Kobelt.

The parallel trade sector previously concentrated its actions on exporting countries. But it is now considering changing its tactics to target an importing country, the UK, where it may sue Pfizer. 'It would not be the EAEPC but import companies that would sue,' said Kobelt.

The idea behind this initiative, whose time-frame has not yet been defined, is that Pfizer's dual pricing system in Spain is preventing UK importers from getting supplies, which the EAEPC says constitutes a violation of the principle of free circulation.

A number of British importers may soon write a letter to Pfizer, which will have 15 days to respond, after which these companies will sue the group to stop its dual pricing in Spain and give them commercial damages.