Austrian racks up millions from parallel trade in EU

Parallel trade may be a bane for drug supplies in low-cost countries, but it's been a boon for Andreas Mohringer and his company, EurimPharm Arzneimittel. As Bloomberg reports, Mohringer has made a small fortune buying cartons of drugs in one European country and selling them for higher prices elsewhere. Enough to buy (and maintain) a prize-winning vintage Ferrari, in fact.

It's all about Europe's union, Bloomberg points out. The EU unites countries into a common economic market, but individual countries retain price-setting powers through their government health systems. As anyone who follows pharma these days knows, some countries in Europe have been pounding prices downward in dramatic fashion, particularly Spain and Greece.

Even before this, a 2009 pricing survey found differentials as wide as 200% in a few cases, Bloomberg reports. Mohringer says his margins aren't anywhere near that, and his company is one of the largest of 140 parallel traders registered with the European Medicines Agency.

Experts tell the news service that even price differences of 10% are adequate enough for business purposes. Bloomberg cites a Janssen-Cilag birth-control pill that sells in the U.K. for 8.44 euros, compared with a wholesale price in Germany of 9.60 euros.

The EMA says it has no evidence that parallel trade causes drug shortages, but drugmakers and industry groups say it does. Drugmakers also don't like the fact that parallel traders siphon off some of the demand in higher-cost countries, crimping their own sales. "These are business people, and they exploit the situation," EFPIA exec Richard Bergstrom told Bloomberg. "What's bad about it is, we lose money from it."

- read the Bloomberg story