Merck & Co/SB Euro Court Parallel Import Ruling A Blow For Industry

A European Court of Justice ruling on December 5, effectively saying that parallel importing is permitted under European Union single market legislation, came as a shock to the litigants and to the research-based pharmaceutical industry as a whole.

The surprise judgement was in the case of Merck & Co vs Primecrown and Smith-Kline Beecham vs Europharm, and went against the recommendations of European Advocate General Fennelly, who had argued that the previous precedent-setting case of Merck vs Stephar was "flawed" and should be reversed. Primecrown and Europharm wanted to buy unpatented brand-name drugs in countries such as Spain and Portugal where they are sold at a price lower than in other markets where patents are enforced.

Confirmed Exhaustion Principle The Court, however, confirmed that the exhaustion principle did apply where a patent holder could demonstrate that it had legal obligations to market in a specific EU member country, but refused to acknowledge the importance of ethical obligations to ensure patient access to medicines in member states with lower standards of patent protection.