EU adviser: GSK broke antitrust laws

Here's a big strike against one strategy for protecting drug prices. A European Union advocate general said GlaxoSmithKline violated antitrust laws when it refused to fill Greek wholesalers' orders in a bid to prevent parallel importation. The decision isn't final; the European Court of Justice still has to rule, but in 80 percent of cases the judges follow their advisers' opinions.

Here's the story: Greek drug prices are among the lowest in Europe. Wholesalers there often order large quantities of meds and re-export them to EU countries where prices are higher. The European Commission has supported this practice of "parallel importation" to encourage lower drug prices, and drugmakers have been running afoul of the E.C. for trying to restrict that trade.

GSK in November 2000 cut off sales to Greek wholesalers for three products, Lamictal, Serevent, and Imigran, saying that the wholesalers' exporting had led to domestic shortages of the meds. The company then sold directly to hospitals and pharmacies for three months, and then resumed wholesale sales--but only filled their orders partially. The wholesalers cried "antitrust;" GSK said that it should be allowed to restrict parallel imports. We'll see how the court rules.

- check out the Forbes news [1]
- read the story [2] in the Wall Street Journal

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