Bayer wins parallel import victory

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Related tags: Bayer, European union

The European Court of Justice in Luxembourg has thrown out
allegations by the European Commission that Bayer, the German
pharmaceutical firm, had established a cartel agreement with its
wholesalers to restrict the trade flow of its cardiovascular drug
Adalat (nifedipine) between the UK, France and Spain.

The case stretches back to 1996, when the Commission accused Bayer of restricting supplies of the drug to Spain and France where, during 1989-93, it was around 40 per cent cheaper than in the UK. Spanish and French wholesalers had been exporting large quantities of Adalat to the UK, and this had caused Bayer's UK unit to lose around €118 million in sales, it was alleged. Wholesalers in France and Spain made a complaint over the supply restrictions to the Commission, which subsequently accused Bayer of breaking anti-cartel laws and fined the firm €3 million.

Bayer appealed this decision in the European Court of First Instance which, in 2000, ruled that the EC had failed to prove that the manufacturer and its wholesalers had established a cartel. It annulled the fine, but the following January the Commission lodged an appeal against this judgement with Europe's highest court.

The ECoJ decision said that none of the documents submitted by the EC contained evidence proving either that Bayer intended to impose an export ban on its wholesalers or that supplies were made conditional on compliance with the alleged ban.

Welcoming the ECoJ decision, Bayer said it had assumed that "pharmaceutical manufacturers are under no obligation to supply the entire European market from the member state with the lowest state-regulated prices for the product in question."