EU – Parallel commerce: export restrictions and bans of pharmaceutical merchandise | Allen & Overy LLP


In 2018, the European Fee adopted a “Steady Provide Obligation Doc to Tackle Drug Shortages‘, Provided that Member States can take measures to forestall or treatment drug shortages by proscribing the free motion of products inside the EU. Whereas a Member State might prohibit the availability of medicines to merchants in different EU Member States and will require prior notification or authorization for this exercise, such measures are solely permitted to the extent that they’re permitted.acceptable, obligatory and proportionate to guard human life and well being by stopping the incidence of drug shortages.

At the moment, in a majority of Member States, authorized frameworks permit the restriction or prohibition of exports of prescribed drugs if there’s a scarcity or danger of scarcity of a given product. On this case, producers would usually must notify upcoming and current shortages and supply data on parallel commerce. For well-defined medicine, you will see in some international locations authorized provisions permitting the issuance of export bans. A number of Member States have additionally imposed export bans on sure merchandise as a part of the battle towards COVID-19 (for instance export bans of protecting supplies reminiscent of face masks).

All these measures can in precept be justified on the grounds of “safety of human life and well being»If they’re proportionate (no much less restrictive different is out there) and “Doesn’t represent a method of arbitrary discrimination or a disguised restriction on commerce between Member States“(Article 36 TFEU). It’s no completely different within the battle towards COVID-19. The EU Court docket of Justice has interpreted any limitation on parallel commerce relatively restrictively. Additionally lately (October 2019), the The Belgian Constitutional Court docket annulled the Belgian amending regulation on the unavailability of medicines for violation of EU regulation. The regulation aimed to keep away from shortages within the Belgian market by introducing an export ban for wholesale distributors (who’ve public service missions). The Court docket discovered this prohibition unjustified, unproportionate and subsequently prohibited by European regulation.

The European Parliament however acknowledged in a decision adopted in September 2020 which drug scarcity is a rising risk to public well being having a severe affect on healthcare programs and the correct of each affected person within the EU to entry acceptable medical remedy, and referred to as on the Fee to provide you with formidable and concrete actions to deal with these points in its EU pharmaceutical technique.

One of many foremost political targets of the EU pharmaceutical technique is assure affected person entry to medicines. The Fee accepts that there are completely different causes for the completely different ranges of entry to medicines within the EU and subsequently proposes completely different initiatives to sort out this drawback. It requires elevated cooperation on pricing and reimbursement programs within the EU, a assessment of the system of incentives and obligations in current pharmaceutical laws and a greater understanding of the basis causes. Current guidelines in Member States on drug shortages (reminiscent of strict inventory management, (obligatory) parallel export notification necessities and monetary penalties for non-reporting) can result in (heavy) administrative burdens / monetary for parallel operators. It stays to be seen how this EU pharmaceutical technique will probably be applied over the subsequent few years and whether or not “much less value distinction” within the markets will make parallel commerce much less engaging.


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