Analysis of the Impacts of Dual Pricing in Spain

Analysis of the Impacts of Dual Pricing in
Spain
2014-07-01
--inno AG, P.O. Box 3366, D-76019 Karlsruhe
+49.721.91345-0 (phone)/ +49.721.91345-99 (fax)
Table of Contents
Concluding Summary and Outlook .................................................................... 4
Reader’s Guide ....................................................................................... 6
1
Introduction ........................................................................................ 7
1.1
2
Explanation of dual pricing and free pricing ............................................. 8
Characteristics of the Spanish Pharmaceutical industry .................................... 10
2.1
The Spanish National Health Service ..................................................... 10
2.1.1
3
4
2.2
The Spanish Pharmaceutical Industry in figures ........................................ 13
2.3
Economic crisis and setbacks of the pharmaceutical sector .......................... 13
2.4
The pricing process ......................................................................... 15
2.5
Pharmaceutical distribution ............................................................... 16
Dual pricing and the broader legal issues ..................................................... 17
3.1
Multiple policy objectives and parallel trade ........................................... 17
3.2
Parallel trade enshrined in the TFEU .................................................... 18
3.3
Dual pricing challenged in courts ......................................................... 18
3.4
Effects on European trade ................................................................. 21
Market stakeholders ............................................................................. 24
4.1
The Spanish National Health Service framework ....................................... 24
4.2
Pharmaceutical industries ................................................................. 25
4.3
Wholesale distribution ..................................................................... 26
4.3.1
Dependence on Pharmaceutical Industries ........................................ 26
4.3.2
Wholesale margins..................................................................... 28
4.3.3
Efficient distributions ................................................................. 29
4.3.4
Tracking the distribution of pharmaceuticals ..................................... 31
4.4
Pharmacies ................................................................................... 32
4.4.1
4.5
5
Pharmaceutical price, consumption and expenditure............................ 10
Pharmacies’ role in the distribution chain ......................................... 32
Patients....................................................................................... 33
Final Remarks ..................................................................................... 33
Appendix 1 – Health Technology Assessment ...................................................... 35
Appendix 2 - References .............................................................................. 38
5.1
Publications .................................................................................. 38
5.2
Figures and statistics ....................................................................... 40
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5.3
Law & Legal Cases .......................................................................... 41
5.4
Institutions/organizations ................................................................. 42
5.5
Interviews .................................................................................... 43
5.6
Wholesale distributors included in the desk research ................................. 43
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Concluding Summary and Outlook
Even though the European Union (EU) has developed a single market through a standardised system
of laws that apply in all Member States, each respective country has their own laws and regulations
to manage its respective healthcare system. This in effect results in a heterogeneous pharmaceutical
market. Spain adheres to both the European Union and its own national laws, which in turn are further regulated by autonomous communities known collectively as autonomies.
Spain is the fourth largest pharmaceutical market in Europe with a market size of $22.7 billion.1
When it comes to price regulation of pharmaceuticals and financial reimbursement through national
healthcare systems, Spain stands out in that innovative, patent-protected drugs are granted lower
“regulated” prices compared to other Member States in EU. These differences in regulations generate price differentials that allows for increased competition through parallel trade. Parallel trade
consists of the importation of legitimately produced goods into a country without the authorization
of the trademark, copyright, or patent holder. While parallel trade traditionally enjoys significant
protection from European Institutions in the belief that it fosters competition and encourages trade,
pharmaceutical companies claim that this form of competition undermines their incentive to innovate. They have adopted so-called “Dual pricing” schemes to limit parallel trade. Dual pricing is defined as a two-tier price model, where two different prices apply to the same good depending on its
final destination. Dual pricing obstructs the free movement of goods in the EU single market, one of
the key pillars of European integration. It has also been found by the European Commission to violate
EU law. The legality of such practices remains an open question however pending further litigation in
Spain and on the EU level with the European Court of Justice.
This practice of limiting free trade within the EU via dual pricing schemes are ostensibly justified to
protect patient welfare and the alleged risk that parallel wholesale traders would export lower priced
drugs from Spain to other markets resulting in drug shortages in the Spanish healthcare system. This
study did not find evidence to substantiate this fear. To be more specific, this study did not find conclusive evidence that could justify a serious limitation to free trade within the single market that is
more or less unanimously seen as a cornerstone for Europe’s welfare and sustainable competitiveness.
However, practices that is referred to as dual pricing have benefited from a well-established protection by Spanish authorities, even if current practices limit free trade and are costly. As a result, the
European Association of Euro-Pharmaceutical Companies (EAEPC) has actively called on Spanish and
European competition authorities to remove these barriers restricting distribution.
Nevertheless, we see no indication that Spain will change its policy substantially in the near future.
No major political party has positioned itself strongly against dual pricing. Moreover, there are pending legal cases on both the Spanish national level as well as the European level resulting in legal un1
IMS Health study report (2011).
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certainty for both wholesalers and pharmaceutical manufacturers. In one ruling, expected late this
year (2014), the Spanish Supreme Court is reviewing a National Appeals Court case upholding the
ruling that a group of pharmaceutical multinationals are restricting competition in the market of
distribution and sale of pharmaceuticals and urged the Spanish Competition Commission (CNC) to
conduct a thorough investigation.
“We welcome and support the decision by the Audiencia Nacional. For years dual pricing has raised
its ugly head in Europe, creating obstacles to the free circulation of goods, preventing companies
from entering into intra-community trade and hindering the possibility of the fulfilment of an internal
market for medicines, surely anathema to anyone who believes in the European project”2
We conclude that any limitation of free trade within the single market is harmful to Europe’s sustainable competitiveness, its innovativeness and in addition harmful to European consumers (i.e. patients). Spain’s dual pricing system constitutes a danger for the single free market and is legally
doubtful.
2
Interview with Director for European Affairs of The European Association of Euro-Pharmaceutical Companies (EAEPC),
th
Heinz Kobelt, 27 of February 2014.
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Reader’s Guide
The nature of this study aims at providing interested parties with up-to-date information on the
Spanish pharmaceutical market in general and its main driving forces. More specifically, it analyses
the way pharmaceutical prices are determined in the Spanish market and analyses the impact of dual
pricing on key stakeholders in Spain. Further the report examines and analyses the pharmaceutical
sector’s dual pricing impacts from an antitrust and free trade competition perspective in Europe as a
whole. This is accomplished through an impact assessment based upon empirical research such as a
meta-analysis of publically available documents and interviews with key stakeholders in the Spanish
pharmaceutical market.
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1 Introduction
In the European Union, prices of pharmaceutical products are and have traditionally been subject to
government control or intervention, though with a varying degree depending on the Member State.
These differences in regulations and government controlled price schemes have resulted in price
differentials and consequently the possibility of parallel trade. Pharmaceutical companies strongly try
to prevent parallel trade because they claim that this constitutes a form of competition capable of
eroding their profits. In their view, parallel trade entails losses that divert money from R&D purposes. Therefore, to safeguard their revenue, pharmaceutical companies operating in the EU have responded by adopting:


Dual pricing schemes, where companies seek to apply differential pricing on the destination
of their supplies within the EU.
Allocation systems, where companies objectively limit the volumes to ensure appropriate
and continuous supplies within each national market but no more as to allow parallel trade
export.
In order for this to be possible it is fundamental prerequisite to take into account European framework conditions. The EU (always referring to the European Economic Area (EEA)) and its Member
States differentiate EU regulated and nationally regulated segments. The relevant market on pharmaceuticals (“drugs” incl. biotech products) is a part of each country’s “Social System/Health Care
System” The Social System types can be divided into three types:
a) State Driven (National Health System/NHS; tax financed, e.g. UK),
b) “Bismarck System” (Statutory Health Insurance System/GKV; financed by employer/employee,
e.g. Germany) and
c) “Freedom to decide” (if and which insurance(s) people choose, e.g. U.S.).
Each system ensures reimbursement of defined benefit packages. Systems in the EU are based on
either a) or b) and cover approximately 98% of the population. All systems however are more or less
alike in regards to the four hurdles any novel patent-protected drug has to overcome.
For Market Approval (MA) regulators (EU: EMA/EC, Member States: Competent Authorities) evaluate
(1) quality, (2) safety, and (3) efficacy. For Market Access (Mac) new drugs must overcome the last
hurdle, (4) Health Technology Assessment (HTA), which determines whether or not the new drug
therapy, is reimbursable as well as determining the reimbursement price. Obtaining Market Access
(reimbursement) is extremely complicated but important for the profitability of the proposed therapy given the reliance on and the economic importance of national healthcare systems. To obtain Mac
companies have to follow the nationally applicable regulations implemented by the respective national HTA institutions. Figure 1 provides a step-by-step overview of the procedure a drug has to pass
to qualify for reimbursement. As it relates to financial reimbursement, Spain stands out from other
Member States as it typically grants lower reimbursement prices than the EU average for innovative
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patent-protected drugs (a more detailed description of the evaluation process novel patentprotected drug need to overcome please see appendix 1).
Figure 1: Focus of the Health Technology Assessment (HTA) process as can be considered and regarded as general model.
Source: Lilly and Company 2013
1.1 Explanation of dual pricing and free pricing
What are dual pricing schemes and what is their purpose? Dual pricing is a two-tier price model
where two different prices apply to the same good depending on the final destination. In Spain, the
pharmaceutical manufacturer charges wholesalers one price when serving the local Spanish market
while charging them a higher price when engaging in exports. As a consequence, parallel trade is
impeded.
GlaxoSmithKline (then GlaxoWellcome) implemented such a system in Spain at the end of the 1990’s
which was subsequently challenged because it effectively prohibited parallel trade within the single
market. In 2001, the European Commission concluded that GSK’s policy of charging different prices
for its product depending on whether they were destined for the Spanish Market or for other EU
markets constituted an infringement of Article 101 TFEU (former 81 EC), i.e. agreements which “have
as their object or effect the prevention, restriction or distortion of competition within the common
market”. GSK was forced to undo its dual price system but appealed the EC decision. Since then, the
pharmaceutical industry has adapted tactics by implementing other mechanisms and variants of dual
pricing to impede parallel trade. One example that has been used within the bounds of Spanish law is
so-called free pricing illustrated below.
The dual pricing systems become more sophisticated in order to avoid any legal problems, it makes
sense to analyse them in greater detail and to show that the new so –called free pricing system remains an attempt to restrict Parallel trade, as this is remains a crucial judicial and political problem.
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Figure 2: Illustration of free pricing model. Source: Author
The system is orchestrated by the Spanish authorities and detailed contracts developed by pharmaceutical industries stating that the Spanish wholesalers have to periodically provide manufacturers
with their sales data. This is for the specific purpose of tracking pharmaceutical products to ascertain
if they were sold within the domestic market (“regulated price” applies) or exported (“free price”
applies). The “regulated price” or price that is ultimately reimbursed by the state is the outcome of a
negotiation between the pharmaceutical company and the Spanish authorities and is applied only
when the drugs have been resold within Spain. The free price is deliberately set higher than the unregulated price to impede parallel trade. If the wholesaler resells within Spain, the pharmaceutical
company reimburses the wholesaler the difference between the free price and the regulated price
amounting to a rebate. However, for exported products, there is no rebate. This system therefore is
a de facto dual price pricing system; a lower price for the domestic market and a higher price for
export.
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2 Characteristics of the Spanish Pharmaceutical industry
2.1 The Spanish National Health Service
Spain has a universal healthcare system providing coverage to 99.5 % of the population which is financed by general taxation through the National Health Service (NHS). The system is operated
through 17 autonomous regions controlling the regional public healthcare services. Until recently the
system has included free pharmaceuticals for the citizens.
This was however modified in 2006 when a new strategic pharmaceutical policy plan was adopted
which included a new pharmaceutical law, “Guarantees and the Rational Use of Medicines and
Health Products, Law 26/2006”. The new law replaced the Spanish Medicines Law of 1990 and,
among other things, introduced a modified reference price system.
2.1.1 Pharmaceutical price, consumption and expenditure
Spain has a strict pricing control policy in order to press the prices on prescriptive drugs and as a
consequence the prices are among the lowest in Europe. The prices are kept low all over the distribution chain from ex-factory prices through the margins for wholesalers to the net retail price.
Another characteristic for the Spanish healthcare system is the comparatively high pharmaceutical
consumption and in figure 3 below, the pharmaceutical expenditure per capita is put in relation to
the GDP per capita for all of the larger EU states. The data clearly shows that Spain maintains relatively high pharmaceutical expenditure per capita compared to other Member States.
Figure 3 Healthcare pharmaceuticals expenditure per capita vs. per capita GDP for the larger EU countries.
In the graph below the pharmaceutical expenditure in percentage of the total expenditure on
healthcare is presented for Spain, France and Germany. According to this data Spain spends a larger
share of the healthcare cost on pharmaceuticals compared to both France and Germany.
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Pharmaceutical expenditure
25,0
20,0
15,0
Spain
10,0
France
Germany
5,0
0,0
2005
2006
2007
2008
2009
2010
2011
Figure 4: Figure 3: Spain Pharmaceutical expenditure as a percentage of total expenditure on health.
Source: OECD Health Data: Health expenditure and financing: OECD Health Statistics (database)
During the early 2000s the number of prescriptions increased by 47.2 % in Spain whereas the population has grown by 10.5 % and the number of elderly (65 yrs. +) has increased by 13.0 %.3 According to
an international survey conducted on the number of medicine units per person dispensed in pharmacies, Spain was one of the countries with the highest consumption.
“The Spanish patient takes more pills per prescription than others usually do in the UK, Germany,
Sweden, etc.” 4
The prices for reimbursed pharmaceuticals are decided by the state authority and are on average
comparatively low. According to an index comparison (Germany 100) the prices are 12 % lower compared to the average price in Europe. However, the prices are typically kept stable over time and only
after years the prices are decreased, a strategy that differs from other Member States. In the chart
below (figure 5), the price change over time for drugs is visualised. The data clearly show that compared to other larger European countries the prices for pharmaceuticals are kept more stable in
Spain.
3
Farmaindustria, Bulletins 84 April 201, “The Pharmaceutical Market in Spain”.
Interview with Director for European Affairs of The European Association of Euro-Pharmaceutical Companies (EAEPC),
th
Heinz Kobelt, 27 of February 2014.
4
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Figure 5: Price changes of innovative patent-protected drugs 2009 to 2013.
Source: PharmaOnline International
There have however been several attempts to decrease the health expenditures by the Spanish authority but compared to other states, lowering the price further has not been an implemented
measure. Cost savings have instead been initiated by using reimbursement levers e.g. lower reimbursement rates, co-payment policies or excluding drugs from the reimbursement list”. There has
also been discussions that implementing policies such as “The Rational Use of Medicines” would be
an efficient strategy to lowering the drug consumption and thereby the national expenditures. 5 The
overall intention with the measures has been to lower the government expenditures on healthcare.
From the data in the graph below it is possible to see that the pharmaceutical expenditures increased until 2009 and have thereafter decreased (figure 6). The decrease can be explained by
measures implemented by the Spanish authorities.
5
Interview with Spanish pharmaceutical expert and cofounder-director of company Excelsia Pharma Strategy Consulting,
th
6 of March 2014.
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Pharmaceutical spending through the National
Health System
14 000
12 000
Million Euros
10 000
8 000
6 000
4 000
2 000
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Figure 6: Pharmaceutical spending through the National Health System.
Source: Ministerio de Sanidad, Servicios Sociales e Igualidad
2.2 The Spanish Pharmaceutical Industry in figures
Spain has a strong international position within medical R&D as well as in production and distribution
of pharmaceuticals, and the market is considered important throughout the country. During the last
decades there has been a rapid increase in R&D investment from the pharmaceutical industry, contributing to make Spain one of the top five nations in Europe in pharmaceutical production and distribution.6 The Spanish market size is today estimated to $22.7 billion and between the years 2007
and 2011 the market had an annual growth of approximately 4.4%7. The numbers are significant
when compared to the global pharmaceutical market which is estimated to $300 billion a year.
Just as the global pharmaceuticals the Spanish markets consists of a few large pharmaceutical industries. On a global scale the 10 largest drugs companies control over one-third of the market, several
with sales of more than US$10 billion a year and profit margins of about 30%8.
2.3 Economic crisis and setbacks of the pharmaceutical sector
The economic crisis in Spain has affected the pharmaceutical industry. Between 2010 and 2012 approximately 15% (6000 employees) of the sector's workforce were laid off. In 2013 an additional
1000 jobs were cut. The development has been unexpected since the pharmaceutical sector has always been considered to be of a more stable character and until recently the industry has been hir-
6
European Federation of Pharmaceutica Industries and Association (EFPIA) (2013), “The Pharmaceutical Industry: A Key
asset to scientific and medical progress”.
7
IMS Health study report, (2011).
8
World Health Organisation, Pharmaceutical Industry, (2014).
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ing year after year. Today, the number of employees in the sector is down to 2004 levels with approximately 35,000 employees.9
An interview with Spanish National Cancer Research Centre corroborates the sentiment:
“The crisis is having a very big effect on many sectors. The plan was to get out of the crisis in
2013/2014 but this has not happened and people are frustrated. There will be more cuts until Spain
gains speed again. Maybe it will take two to three more years. In the meantime Spain is losing a lot of
know-how not only in the pharmaceutical sector but also within the academic field. A lot of scientific
researchers are leaving Spain due to low salaries and high taxes, a loss that is very dramatic. What
were blooming institutions are now losing people and are not hiring to replace losses. This will in turn
have an effect because it will take at least 10 years before people will return to Spain.“ 10
Spain has also like several other countries been affected by the overall setbacks that the pharmaceutical industry is facing. As part of restructuring and cost-cutting measures, several of the top 10
pharmaceutical companies have divested manufacturing assets in Spain over the last years. Examples
include AstraZeneca, which divested its sole Spanish manufacturing plant in May 2009. In July 2009,
Merck & Co. also sold its production facility for $ 5 million but to a domestic specialty company.11
“With the top 10 pharmaceutical companies in Spain (nine of which are multinationals) holding only a
small R&D and manufacturing presence in Spain, the potential threat of these companies reducing
their presence could further impact innovation, production, and ultimately the economy.”12
Even though some of the top 10 pharmaceutical companies have divested, others are investing in
new manufacturing plants. Pfizer sought to double production at its manufacturing site in San Sebastian de los Reyes (Madrid) during 2010–12, in order to increase the export to emerging markets such
as China and Russia (Pfizer, 2010). Novartis is another example of a company that during recent years
have invested in Spain. They invested € 559 million in its manufacturing plant in Barberà del Vallès
between 2004–08, with further investments in 2009 alone amounting to an additional € 11.4 million.13 Economic figures also show that the Spanish pharmaceutical industry is still strong.
“R&D in Spain amounted in 2012 to 972 million euros, only 0.2 % less than in 2011. 45 % of the total
expenditure on R&D in the pharmaceutical industry is devoted to research contracts with hospitals,
universities and public institutions, an increasingly important structure for the research pharmaceutical companies. Last year the extramural expenditure exceeded € 461 million, having increased its
9
Farmaindustria, News feed from February 2014.
Interview with current employee and researcher of Spanish National Cancer Research Centre, Development and Disease
th
Group, 5 of March 2014.
11
SCRIP Insight, (2012),” Key Findings: Spain Pharmaceutical Market Overview, Continued stagnation as generics and price
cuts erode market value”.
12
InvestinSpain (2012), ICEX España Exportación e Inversiones.
13
SCRIP Insight, (2012),” Key Findings: Spain Pharmaceutical Market Overview, Continued stagnation as generics and price
cuts erode market value”.
10
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amount by +4.4 % compared to in 2011. Furthermore, investment in clinical research conducted by
the pharmaceutical industry has increased 86 % in the past 9 years. In addition, more than € 140 million was invested in basic research” 14
The positive view on the market is enforced by statements done by the interview respondents.
“The situation in the pharmaceutical sector in Spain is stable at the moment.” 15
“The largest problem for the pharma industry is not the lack of investments at this point; it is that the
state is in debt to the manufacturers. However, I believe that the companies will receive their money
eventually as payments are included in the state´s budget.” 16
This reflects that while Spain has been affected by the financial crisis, the pharmaceutical industry
continues to invest in Spain and it is viewed as an important economic sector by the Spanish authority.
2.4 The pricing process
In Spain all pharmaceuticals that are reimbursed have a regulated price. Therefore, when a new
pharmaceutical is granted market authorization the Ministry of Health initiates a procedure to decide
whether the drug should be reimbursed or not (an explanation of the market authorization processes
is available in appendix 1. For all drugs that get approved for reimbursement a regulated price will be
decided on. The process of deciding on reimbursement and then a regulated price is done simultaneously. If the reimbursement decision is negative, the product´s price will be determined by the
manufacturer according to the laws applied to free pricing.
The decision on whether or not a drug is reimbursed is based on five major aspects 1) severity, duration and sequels of the diseases for which the drug is indicated; 2) therapeutic and social utility of
the drug; 3) rationalization of public drug expenditures; 4) alternatives for the indications targeted by
the drug; and 5) the novelty of the drug. The process is carried out by the Interministerial Commission on Pharmaceutical Prices operating under the Ministry of Health.17 The Directorate General of
Pharmacy and Health Products of the Ministry of Health are responsible for the final formal decision
of the maximum ex-factory price and base its decision on a suggestion made by the Interministerial
Commission on Pharmaceutical Prices. The Interministerial Commission will take into account the
therapeutic utility reports provided by the Spanish Agency for Medicines and Health Products, which
will cooperate with a team of external experts proposed by the Autonomous Regions.
14
th
Farmaindustria. (5 of December 2013) News feed “The investment in I+D of the pharmaceutical industry in Spain in 2012
was 972 million Euros”.
15
Interview performed with employee from COFARTE La Cooperativa Farmacéutica de Tenerife, a pharmaceutical distributh
tion company from Tenerife on, 27 of February 2014.
16
th
Interview with Spanish pharmaceutical expert and cofounder-director of firm Excelsia Pharma Strategy Consulting, 6 of
March 2014.
17
Vogler, Sabine, Jaime Espin, and Claudia Habl. (2009), "Pharmaceutical pricing and reimbursement information (PPRI)–
New PPRI analysis including Spain" Pharmaceuticals Policy and Law 11.3: 213-234
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There are three levels of reimbursements:



100% reimbursement for pharmaceuticals administered in the hospital
90% reimbursement for pharmaceuticals managing chronic illnesses (e.g. diabetes, asthma
and epilepsy)
60% reimbursement for the majority of prescription-only pharmaceuticals
The pharmaceutical companies will submit documentations that are evaluated by the authorities in
order to make a decision. There is solely one compulsory document, the “Price application” where
the company submits the desired price as well as the following information:




Cost per day compared to equivalent products in Spain
Price of the product in other EU countries (reference pricing)
Sales forecast
The overall cost of R&D, production cost, etc.
The Information provided is used to decide on the reimbursement and also when setting the regulated price.
2.5 Pharmaceutical distribution
The distribution system of pharmaceuticals in Spain is based on the traditional value chain where
pharmaceutical industries manufacture drugs, which then are delivered to patients through primary
care centres, pharmacies and state institutes. The distribution is either direct or through a wholesale
distributor. In Spain 65% of the pharmaceutical distribution is done through wholesale distributors
and these drugs are mainly delivered to retail pharmacies, as shown in the figure below. This system
is highly efficient and widely accepted and reduces the pharmacy’s need for stock as well as the
number of orders needed.
There is however a trend in Europe where pharmaceutical companies choose to sign selective
agreements with a few wholesale distributers. The pharmaceutical companies then supply pharmaceuticals directly by using a single wholesaler as a logistic provider for either part of or their entire
product portfolio. The consequences of the new distribution models are elaborated in more detail in
chapter 4.
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Figure 7: The distribution chain of pharmaceuticals in Spain
3 Dual pricing and the broader legal issues
3.1 Multiple policy objectives and parallel trade
As intended by the European Union, the free single market is about removing barriers and simplifying
existing rules to enable everyone in the EU – individuals, consumers, and businesses – to make the
most of the opportunities offered to them by having direct access to 28 countries and 503 million
people. The cornerstones of the single market are often said to be the “four freedoms” – the free
movement of people, goods, services and capital. This principle is enshrined in the Treaty on the
Functioning of the European Union (TFEU) and forms the basis of the single market framework to
benefit:



Individuals: the right to live, work, study or retire in another EU country
Consumers: increased competition leading to lower prices, a wider choice of consumer goods
and higher levels of protection
Businesses: reduce and remove transaction barriers across borders for the free movement of
goods
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The member states have however a certain possibility to define their own healthcare policy, including price regulations and benefits. In the case of pharmaceuticals, the objective of pharmaceutical
regulation and price control is to optimise equitable access to medicines and cost containment. This
however creates tension between multiple policy objectives and parallel trade. In Spain the responsible authority is the Spanish Medicine Agency (AEMPS) and the Spanish Ministry of Health.
3.2 Parallel trade enshrined in the TFEU
The legal governing doctrine of parallel trade stems from the European policy on the freedom of
movement of goods, pursuant to Articles, 34-36 of the TFEU, and the principle of ‘regional exhaustion’. On this basis once a good is legally produced and placed on the market within the European
Economic Area (EEA) by the owner of the rights, the owner cannot use its trademark or patent right
to hinder the further sale of the product in the EEA, except in exceptional circumstances where, for
example, public health is at risk. Pharmaceuticals and related products fall under this exception. The
European Commission works to ensure that all EU member states and all market players – in this
case national health services, pharmaceutical companies and distributors – respect the Treaty rules
on free competition and free movement of goods and services within the European market.
With this goal in mind, the Directorate-General for Competition (European Commission), responsible
for establishing and implementing a coherent competition policy for the EU, monitors business practices as well as company mergers and State aid in the healthcare sector. In July 2010 it integrated its
antitrust activities regarding all healthcare sectors under a new unit called "Antitrust: Pharma and
Health services" responsible for competition law enforcement for all health products and services.
Within this area, the European Commission cooperates with national authority counterparts through
the European Competition Network. The mandate of the European Competition Network Pharma
subgroup has been extended further to cover health services and health products other than pharmaceuticals.
3.3 Dual pricing challenged in courts
As referenced above, EU Member States retain the power to set the prices of pharmaceuticals. On
the national level, Article 38 of the Spanish Constitution represents the basic constitutional rule concerning the exercise of a business activity in Spain. It further recognises the freedom of enterprise as
one of the pillars of the economic model of the Spanish State18. One of the basic consequences of
this general principle is that market operators are free to set the prices of their products. However,
the freedom to set prices can be limited. Governmental intervention in pricing must be exceptional,
construed narrowly and strictly limited to its justified object and scope. In this context, state intervention on the pricing of pharmaceuticals is only justified on certain limited grounds, which in turn,
are also protected under the Spanish Constitution. These grounds are (i) the need to protect public
18
The Spanish constitution
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health, by ensuring that patients in Spain have adequate access to pharmaceuticals, and (ii) the need
to control public healthcare expenditures.
Article 100 of the Spanish Medical Act is the key legal provision dealing with Spanish state intervention in pricing of pharmaceuticals19. It confirms that pharmaceutical manufacturers are free to determine the prices of their pharmaceuticals, thereby allowing dual pricing. However, where the conditions for government intervention are met, pharmaceutical manufacturers are obliged by law to
replace the freely set price with the price established by the Spanish health authorities.
This has led to price differentials between Spain and other Member States and consequently parallel
trade. However, pharmaceutical companies strongly try to prevent parallel trade by implementing
different strategies, based either on pricing or on supply management. The dual pricing system is one
such example and is a way for pharmaceutical companies to apply differential prices depending on
the destination of their supplies within the EU. So-called free price policies implemented by pharmaceutical companies in Spain consist of exercising the freedom to determine freely set, which is mandatorily replaced by the government price if legal government price control requirements are met.
These practices have been challenged on both the national and European level. Perhaps the best
known case involves GlaxoSmithKline (formerly GlaxoWellcome).
Beginning in 1998, GlaxoSmithKline (GSK) implemented a dual pricing scheme in Spain designed to
stop parallel trade. The contractual sale conditions that GSK wanted wholesalers to sign contained a
clause that fixed two different prices for sales of the same products to the same customers, depending on the final destination of the product, i.e. dual pricing. A higher price applied to purchases intended for resale outside Spain. The lower prices applied only to products intended for subsequent
resale at a national level, through pharmacies or hospitals. GSK required wholesalers to sign the new
sale conditions and suspended supplies to those who did not sign. When GSK suspected that wholesalers had exported products purchased under the new clause, the company issued a supplementary
invoice with the higher price.
The European Commission in a 2001 decision against GSK, found that the sales conditions constituted an agreement with the objective to prevent, restrict and distort competition; that it actually produced restrictive effects on competition; and that GSK had not demonstrated that the agreement
fulfilled the four conditions required from Article 101 TFEU (ex Article 81(3) EC) to obtain an exemption from the application of competition law rules. The Commission determined that the dual pricing
scheme in place infringed on Article 102(1) of the TFEU (ex Article 82(1) EC) and could not be exempted under Article 101(3) TFEU (ex Article 81(3) EC). In the view of the European Commission, the
Spanish dual pricing system interfered with the Community's objective of integrating domestic markets and restricts price competition. While the EC considered dual pricing anti-competitive and unduly preventing parallel trade, the European Court of First Instance (CFI) in a 2006 ruling annulled the
19
Hénin, C. (2011), “Parallel trade and pharmaceuticals in the EU: current issues”
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first ruling by affirming that GSK’s dual pricing system was not contrary to Article 102(1) TFEU. Secondly, the Court said that in evaluating the conditions for a possible exemption under Article 102(3)
TFEU, the Commission did not properly carry out the necessary economic analysis required by the
specific nature of the pharmaceutical sector. Therefore, the CFI annulled the Commission’s decision
in that part and required a new evaluation from the side of the Commission.
The same case has further been analyzed and the 6th of October 2009 the European Court of Justice
(ECJ), presented its judgment on GSK. The ECJ largely confirmed the findings of the CFI but bases its
decision partly on a different reasoning. The ECJ found that any agreement whose purpose was to
restrict parallel trade across the single market was a so-called restriction "by object". As is well
known, Article 81(1) EC prohibits agreements having the "object" or "effect" of restricting competition. However, the ECJ agreed with the CFI that restrictions "by object" can be exempted under Article 81(3) EC. In conclusion the ECJ partly took a stricter position than the CFI, particularly when it
considered the restriction to be one "by object", it ultimately upheld the CFI judgment, thereby confirming the annulment of the decision adopted by the Commission in 2001. It is, however, important
to note that as a result of this judgment, the Commission decision is only annulled for insufficient
reasoning. Neither the CFI nor the ECJ decided definitively that the GSK's dual pricing policy was legitimate20.
This represents one well publicised case, but other cases and complaints that have impeded parallel
trade have been brought before both the Spanish courts and on the EU level. In 2007 the European
Association of Euro-Pharmaceutical Companies (EAEPC) published a press release criticizing dual
pricing in the pharmaceutical sector in Spain.21 EAEPC had filed a complaint against several pharmaceutical companies (Pfizer, Janssen-Cilag, Merck Sharp & Dohme, Lilly, Novartis, Sanofi-Aventis) as
well as against the Spanish competition authorities. The reason behind the complaint was to investigate whether they were actively insulating the Spanish market and thus undermining competition in
other countries of the European pharmaceutical distribution. Manufacturers were constraining parallel trade by signing contracts with wholesalers that limited their ability to be reimbursed or obtain
the Spanish regulated price if they exported the drugs to other EU countries.
The EAEPC stated: "Forcing the Spanish wholesalers to participate in illegal contracts, just as dual
pricing, is a serious breach of the EU-Community law. Such practices restrict competition in the distribution of medicines in Europe and are harmful to competition and consumer welfare."22
One case has been brought against Pfizer’s free pricing system in Spanish court. However, under a
rather formal line of reasoning, the Spanish competition authority refused to consider that this case
20
th
Court of Justice of the European, CVRIA, Judgement of the court (Third Chamber), 6 of October 2009, In Joined Cases
C-501/06 P, C-513/06 P, C-515/06 P and C-519/06.
21
The Spanish constitution.
22
EAEPC, Kobelt,H. (2013), “Comment: Spanish National Appeals Court finds dual pricing in the pharmaceutical sector anticompetitive”
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involved dual pricing despite the contrary. As a result, the Spanish Competition Authorities determined that neither Pfizer, nor its distributors, were fixing the price for drugs sold on national territory. Thus, there was no dual pricing. However, the Spanish Supreme Court decided otherwise and
referred it back to the Spanish Competition Authority for reconsideration.23
However, a judgment of the Audiencia Nacional (“AN”) in 2011 partially upheld an appeal against the
decision of the Spanish Competition Authority (Comisión Nacional de la Competencia (CNC)) in 2009
regarding the dismissal of a complaint filed by pharmaceutical companies in Spain. The judgments of
Audiencia Nacional stated that free pricing schemes are at the end the same as dual pricing schemes
and therefore constitute an infringement “by object”. The AN consider the fact that the CNC qualified the policy as unilateral entails that it is the result of a voluntary action of the pharmaceutical
company. The court underlines that the agreement between the pharmaceutical company and its
wholesalers is aimed at limiting parallel trade. The Spanish legislation does not determine the wholesale price of the pharmaceutical products. Therefore the pharmaceutical company is not obliged to
apply a different price (the so called “free price”) for those pharmaceutical products, but rather does
so voluntarily. The AN considers it immaterial whether the pharmaceutical products’ government
price is agreed with or imposed by the authorities.
These cases serve to highlight ways of hindering free trade and the legal processes investigating the
effects of dual pricing. Meanwhile, pharmaceutical manufacturers continue to use dual pricing and
other measures to seal off the Spanish market and limit the possibility of export. In the European
context, these effects clearly represent a concern. Dual pricing, in fact, restores trade barriers along
national borders, thereby holding up the economic interpenetration that the Treaty intended to
bring about. In other words, it frustrates the policy goal of an integrated internal market, which still
constitutes one of the ‘constitutional’ objectives of the Community.
3.4 Effects on European trade
Competition between agents is protected under Articles 101 TFEU and 102 TFEU. According to the
articles, any treaty or agreement that prevents or restricts competition is explicitly prohibited. Article
102 TFEU prohibits any abuse exercised by a party in a dominant position within the market. This
includes vertical restraints: no manufacturer should abuse its position on a distributor. The jurisprudence since the 70s reveals the constant tendency of the European Court of Justice (ECJ) to support
the free movement of products, as well as competition and therefore parallel trade between Member States.24
23
L. Blanquez Palasi, “The Spanish National Court applies the ECJ "dual pricing" ruling to quash a decision by the Spanish
Competition Commission concerning prices imposed to wholesalers by pharmaceutical company (Pfizer)”, e-Competitions,
th
No39274, 13 of June 2011.
24
L. Blanquez Palasi, “The Spanish National Court applies the ECJ "dual pricing" ruling to quash a decision by the Spanish
Competition Commission concerning prices imposed to wholesalers by pharmaceutical company (Pfizer)”, e-Competitions,
th
No39274, 13 of June 2011.
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The European Commission states in its communication on the Single Market of medicine that impeding parallel trade results in an inefficient pharmaceutical distribution within the European Union.25
The same piece also concludes that parallel trade must be seen as a driving force of market integration that consequently promotes the achievement of a single market.
Ever since the EU was created, there have been provisions for the free movement of goods between
EU Member States. Member States must introduce provisions within their legal system to allow
products coming from other Member States to be treated the same as domestically sourced products. The same applies to pharmaceuticals. But parallel distributors have for a long time struggled
against various measures, or lack of measures, in EU countries, that impeded the parallel importation
of medicines. The European Commission set out the legal framework for the free movement of
pharmaceutical products as early as 1965. It has also clarified this legislation on two occasions, in
1982 and 2004. Each time it has clearly stated that Member States should have provisions, which
allow and do not impede in any way parallel imports.26 Spain however has continued to maintain the
status quo:
“During the years these clauses have been in place, hospital drug spending and pharmacy costs have
grown substantially in Spain. It remains to be seen how the Spanish Ministry of Health will react to
this judgment of the Court. The Spanish health authorities have not only ignored the imposition of
these anti-competitive practices but have implicitly supported them by passing regulations which
made it possible to enter into such supply contracts and thereby hindering export of pharmaceuticals.”27
Exports of products from Spain are becoming increasingly scarce due to dual pricing and other anticompetitive practices used by pharmaceutical manufacturers. What started as a strategy introduced
by GlaxoSmithKline and later adopted by others such as Pfizer have proliferated and continue to circumvent and challenge the European competition rules.
This is one reason why the EAEPC recommended that Spanish antitrust and competition authorities
need to act to enforce European standards on competition and prevent pharmaceutical companies
from causing further commercial harm to Spanish wholesalers, the national health budget and the
patients. Products distributed in parallel are sometimes the only alternative source of supply of innovative drugs still protected by patents. This serves as a way of limiting the monopoles of certain
pharmaceutical producers and fosters inter-brand competition and hence R&D. Restricting parallel
trade also means restricting exports, which harms the end-consumer and the state because they
25
Philipson A. (2001) “Guide to the concept and practical application of articles 28-30 EC. Brussels: Commission of the European Communities”, DG Enterprise.
th
26
EAEPC (29 of November 2013), ”What challenges do parallel distributors face”.
27
EAEPC, Kobelt,H. (2013) press release, “Comment: Spanish National Appeals Court finds dual pricing in the
pharmaceutical sector anti-competitive”.
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cannot get benefits from the export and potentially lower, market driven prices. Moreover another
benefit of exports is that it can improve the distribution networks in Spain.28
Export of medicinal and pharmaceutical products from 2001 to 2012 (see figure 8 and 9) demonstrate that Spain has never been a large exporter compared to other European countries. Even with
the modest increase in export levels, pharmaceutical exports accounted for only 3.8 % of total Spanish exports in 2012.29 Spain has traditionally registered a trade deficit that stemmed from a structure
that made Spain a net importer that relied more on buying abroad than on producing at home for
foreign markets.
Figure 8: Export of Medicinal and pharmaceutical products in Euros. Source: Eurostat
28
EAEPC,Adefarma, (2007), “ The european medicine distribution takes legal actions against the proliferration of doubleprice systems in Spain.” (“La Distribución Europea de Medicamentos emprende acciones Legales contra la proliferación de
Practicas de doble prico en España”
29
Farmaindustria Annual report 2012.
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Figure 9: Import of Medicinal and pharmaceutical products in Euros. Source: Eurostat
4 Market stakeholders
4.1 The Spanish National Health Service framework
Spain has a universal healthcare system, providing coverage to 99.5 % of the population, which is
financed by general taxation through the National Health Service (NHS). On a national level the NHS
is supervised by the Ministry of Health and Consumer Affairs (MSC) and the National Health System
Interterritorial Council. The MSC is responsible for the pharmacovigilance, product approvals, costcontainment and long-term policies and the Interterritorial Council for the publicly financed services
that must be provided where pharmaceuticals is included. The system is operated through 17 autonomous regions and two cities controlling the healthcare delivery. Compared to many other EU Member States, Spain has a complex decentralised healthcare system where the autonomous regions and
cities have strong controlling power and influence over the regulations and offered services.
Until recently the NHS provided free pharmaceuticals for all Spanish citizens. This was however modified in 2006 when a new strategic pharmaceutical policy plan was adopted which included a new
pharmaceutical law, “Guarantees and the Rational Use of Medicines and Health Products, Law
26/2006”. The new law replaced the Spanish Medicines Law of 1990 and, among other things, introduced a modified reference price system.
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4.2 Pharmaceutical industries
The Spanish pharmaceutical industry is organised through the National Trade Association, Farmaindustria, and the member companies represent 82% of the total market sales of prescription drugs.30
Almost 90 % of pharmaceutical industries in Spain are located in the autonomous communities of
Madrid and Catalonia with most being small- to medium-sized enterprises. However, Spain has experienced an increase of investment from large, multinational pharmaceutical companies and now
eight multinational companies are featured among the top ten leading companies in Spain, accounting for over 50% of the national market sale.
The Spanish market is lucrative for the pharmaceutical companies due to two main reasons: medical
consumption is high and the free pricing system, which allows manufacturers to virtually eliminate
exports of its products from Spain to other European markets. The system allows the companies to
maximize their profit by isolating the Spanish market and hindering wholesale distributers from exporting the “low priced” drugs, through parallel import, to other EU Member States. According to
the pharmaceutical industry the system allow them to reinvest a lager amount of capital in research
and development, this way enabling development of new drugs for the future which is in the public’s
interest. Other voices has been raised indicating that the pharmaceutical industry only use that
statement and the threats of shortage of drugs in order to effect the Spanish government to apply
regulations allowing them to maximize their profit.
”The free price system allows pharmaceutical companies to price exported products at the highest
possible level without the threat of competition, from parallel distribution. For example, Spanish
wholesalers do not sell Pfizer products to the UK but a subsidiary of Pfizer in the UK serves as the only
source of Pfizer products distributed to pharmacies through British wholesalers.”
The main argument used by the pharmaceutical industry to justify the dual price system is the need
for R&D investments, companies argue that high profits generated by sale will be reinvested in further drug development. There has however not been possible to find any evidence for this argument
and there is today no causal link between profits, parallel trade and R&D investments. There are no
data showing that the pharmaceutical companies use the higher margins to invest in R&D, but it is an
argument known to appeal to the public and are therefore often used. This contention has also been
addressed in several legal persecution, in the Lelos case the European Court of Justice (ECJ) rightly
reclassified this claim as the impact “on the pharmaceuticals companies’ revenues” (par 29)31. It
treats it as justification to protect a legitimate commercial interest. The argument is implicitly but
clearly rejected as an argument for total refusal (paragraph 70). Advocate General Ruiz-Jarabo also
stated that the R&D argument is totally unfounded and misleading aimed at seducing public opinion”.
30
Farmaindustria, Annual report 2012.
Mayer & Brown, EU & UK Antitrust/Competition Legal Alert, (2008).
31
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In addition to that, pharmaceuticals are sold on a global market and are the pharmaceutical industry
is known to be highly profitable (36% profit margin of Roche in 2013). This can be compared to parallel trade that has about 3% market share of the total European market and only appears within the
European Union. The effect on profits of a globalized industry is therefore very limited.
4.3 Wholesale distribution
Pharmaceutical wholesale distributors are the link between pharmaceutical companies and pharmacies. They are the stakeholders mostly affected by the free pricing system. Traditionally there are two
types of distributors; Full line distributors and Short line distributors. The Short line distributors
commonly work regionally and provide a stock of a limited list of medicals compared to the Full line
distributors that normally work on a national level and provide a larger set of medicals. In most of
the EU Member states both types exist. The benefits associated with full line distributors is that they
can offer a full service and provide frequent delivery, thereby compensating for potential supply
problems of manufacturers, thanks to their full range of medicinal products on stock.
However, in this sense Spain stands out in that more than 50 % of the market share consists of full
line wholesalers that work on a regional basis. In total there are 52 companies listed as pharmaceutical wholesalers in Spain that together represent 98.7 % of the market. Three main wholesalers command the largest part of the market share: Cooperativa Farmaceutica Espanola (Cofares) (23.2%),
Farmanova (13.3%) followed by Alliance (11.8%).32
4.3.1 Dependence on Pharmaceutical Industries
The wholesale distributors are strictly dependent on the pharmaceutical companies and are often
forced to enter comprehensive contractual agreements, where it is stated what medicals that can be
distributed and where, geographically. This way the distributors are hindered to export any pharmaceuticals to the price level kept within Spain. There have also been reports indicating that the pharmaceutical companies in some cases choose to sign selective agreements with a few wholesale distributers. This way they are able to control the distribution process and to whom drugs are delivered.
This is a trend seen all over Europe, where the pharmaceutical companies supply pharmaceuticals
directly by using a single wholesaler as a logistic provider for either part of or their entire product
portfolio. As a consequence two new distributor models have been created; the Reduced Wholesale
Agreement (RWA) and the Direct to Pharmacy (DTP). In the DTP model the wholesalers operate as a
logistics service provider and thereby do not take ownership of the medicinal products they distribute. Therefore they are only remunerated a fee of the service. Within the RWA the pharmaceutical
industries instead limit the number of wholesalers to which they provide their medicinal products –
for example they restrict supply of their medicinal products to only two or three wholesalers. This
results in other wholesalers not being in a position to provide those products as part of their product
range of stock and reducing them in their role as pharmaceutical (full-line) wholesalers. In the RWA
32
FEDIFAR (2013), “Sectorial Analysis of the pharmaceutical distribution in Spain” (“Análisis sectorial de la distribución
farmacéutica en España”.)
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model, pharmaceutical manufacturers sell the stock to selected wholesalers, thus pharmaceutical
full-line wholesalers still become the owners of the medicinal products compared to in the DTP model.
The new distribution models have effectively impacted how the wholesalers are organised; during
recent years a horizontal integration of the wholesale distribution in Europe has been seen. Many
wholesalers are now operating throughout regions of the EU and the total number of wholesalers
has decreased significantly over recent years. Due to the strict regulations in Spain and the tradition
of a decentralised authority, the trend is not as prominent in Spain as in many other European states
such as the UK. The Spanish wholesale distribution landscape is instead characterised by full line
regional distribution and only one wholesaler is owned by a foreign entity (SAFA with 14 % market
share). However, this study can confirm that both RWA and DTP distribution models exist in Spain
and in section 4.3.3 the effects are further discussed.
In order to protect the distributors a new legislation was adopted in Spain in 2005, article 70
(Exigencias de funcionamiento in Ley 29/2006, de 26 de julio, de garantías y uso racional de los
medicamentos y productos sanitarios). The law is supposed to protect the right of distributors to be
supplied and promote the pharmaceutical industries to instead work with a larger number of distributors.33 Nevertheless, interviews with wholesalers reveal that in reality this law has not changed their
position and so far it has not provided sufficient legal support for any case when brought to court.34
The distribution chain depends on the supply of the industry and the due to the risks associated with
the new business-models at the wholesaler level there is a need for further antitrust policies. A trend
that is seen all over Europe, for example the French Competition Council Decisions stated in its Decision in 2007 that, “restrictions on supply should not go beyond what is strictly necessary to ensure
reliable and economically-viable supply of product.” The French authorities further states:




Flexibility in allocation calculation: more frequent adjustments so that market shares of
wholesalers are not frozen
Transparency: wholesalers are informed of how allocations are calculated and what their allocation is
Non-used allocations: wholesalers are offered possibility to transfer non-used allocations to
next period
New entry packs: new wholesalers are offered a minimum entry allocation
In its report in 2013, the French Competition Authority encouraged again the reinforcement of the
bargaining power of the wholesalers; the Authority underlined their important role in the distribution chain.
33
34
Article 70. Exigencias de funcionamiento.
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Interview with Spanish small business owner and distributor of pharmaceuticals from Spain, 28 of November 2013.
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The distribution process is further controlled both by a regulated price margin defining the wholesalers’ profit and by forcing them to having money owned to them until they can prove the drugs’ final
destination.
4.3.2 Wholesale margins
In Spain the wholesale margins on reimbursed drugs are regulated according to a regressive structure which refers to decreasing margins with increasing ex-factory price. In practice this means that
for medicines with a manufacturer price of up to € 91.63 there is a margin expressed as a percentage
of the retail price and for higher priced medicines a fixed amount is added. 35 In Spain the average
wholesale margins are between 3-5 %, which is considerably lower compared to other European
Member States. 36 Reports clearly show that the margins of the wholesale distributors have decreased in recent years. In the figure below the wholesale mark-up is presented over the last decade
showing that the margins have decreased almost 30 %.
Figure 10: Development of average wholesale margin on pharmacy purchase price and pharmacy margin on pharmacy
retail price excluding VAT in DE, ES, FR, IT, NL, UK, 2001-2010.
Source: GRIP study from the Institute for Pharmaeconomic Research
This development, together with new regulations and cost cutting measures adopted by the Spanish
authorities, is the main reason why the margins for the distributors over recent years have decreased. The new distribution model offers an effective way for the pharmaceutical industries to take
further control of the distribution process and further maximizing their profit. As a consequence the
35
Kanavos, Panos, Schurer, Willemien and Vogler, Sabine (2011) “The pharmaceutical distribution chain in the European
Union: structure and impact on pharmaceutical prices. European Commission”, Brussels, Belgium.
36
Kanavos, Panos, Schurer, Willemien and Vogler, Sabine (2011) “The pharmaceutical distribution chain in the European
Union: structure and impact on pharmaceutical prices. European Commission”, Brussels, Belgium.
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wholesale distributors do not have the possibility to build stock which directly affects the availability
of pharmaceuticals and their ability to serve the pharmacies.
4.3.3 Efficient distributions
IP rights, Falsified Medicines, Dual pricing, now Shortages: the industry is changing its arguments in
order to act against parallel trade. Some European Member States are aiming to restrict exports of
pharmaceuticals based on arguments that are not justified and proportionate and therefore dismissed by the European Commission.
Greece can be used as a case study to investigate the argument of parallel trade causing drug shortage. The mixture of price austerity and export restrictions in Greece led to significant problems for
pharmacies and wholesalers. In 2009, there were no shortages of pharmaceuticals even though
Greece had an export of 1.4 billions, whereas shortages appeared in 2012 with only 350 millions of
exports (Greek Pharmacist Association). This shows clearly that shortages are not caused by parallel
distribution; the mixture of price austerity, quotas and export restrictions was harmful for all the
stakeholders in the market. Greece has now given up export restrictions because of those effects.
The reasons behind drug shortage are instead global manufacturing problem or targeted national
problem that always is caused by the supply management of the industry. In a market economy, a
supply quota system causes problems, especially if the demand is changing. Limited flexibility is always problematic, a quota system can at least temporarily lead to shortages and in medium term, it
causes big problems for the downstream distribution channels.
Figure 11: The picture shows that a flexible market system allows changed in the level of demand and do not result in
any shortages.
With rigid quotas, there are no buffer and stocks and less flexibility to respond to the changing market needs. With fewer exports, there is less cash flow for the stakeholders in the distribution chain
what will cause additional problems.
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Figure 12: Rigid quota systems instead result in the risk of drug shortage.
In Spain drug availability is also affected by the fact that the pharmaceutical full-line wholesalers are
obligated to provide a pre-financing function towards the manufacturers and pharmacies. Through
the purchase of pharmaceuticals from the manufacturers, the wholesalers acquire ownership which
then is passed to pharmacies when the pharmaceuticals are delivered. However, payments by the
pharmacies are usually delayed, often until after reimbursement from the National Health System.
The economic burden for the wholesalers is even higher due to that the wholesale distributor acquires the pharmaceuticals to a higher price, the unregulated free price, and only when providing
information on the drugs final destination within Spain remuneration is possible. 37 This process results in the wholesalers having money owned to them.
The financial crisis in Spain has also contributed to delays in remuneration to the wholesalers and the
pharmaceutical industries. In an article published by the Wall Street Journal in 2012 the public administration of Greece, Spain, Portugal and Italy was estimated to owe the pharmaceutical industry $
15 billion.” 38
“Due to budget shortfalls, there are real concerns that the National Health System is no longer sustainable in particular with increasing levels of debts and periodic defaults (or threats of default) in
various regions. In Spain attempts are also being made to separate shortages with irregular supply
and potentially access issues. ... With extreme measures being taken to control cost in Spain, delays in
payment to pharmacies for reimbursement has had an effect up the supply chain to manufacturers
37
Europapress, Press Release February 6 2013, The pharmacies denounce that the industrie adopts a double price for drugs
in relation to them being co-financed or not” (“Las farmacias critican que la industria fije un "doble precio" para
medicamentos en función de si son financiados o no”.)
38
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Wall Street Journal (25 of June 2012), “Drug Firms Urge Price Action; Steep Discounts in 5 European Nations Create
Shortages”.
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and is adding considerable risk and pressure on the possibility of shortages. To tackle the issue of
arrears, the government has enabled ICO (Institutional Official Credits) to pay providers for debt in
2012 and 2013. This will not prevent the situation arrears occurring again in the future.”39
The risk of limited availability of drugs in Spain is therefore not a result of parallel trade but rather of
the inability of Spanish authorities to pay manufactures and an inefficient rigid quote system. By
allowing a flexible market system and wholesalers to build stock the sufficient and sustainable delivery of pharmaceuticals will be secured.
4.3.4 Tracking the distribution of pharmaceuticals
In order for the authorities to be able to track the distribution process the Spanish authorities have
adapted legislation, a Royal Decree on June 13th 2003, introducing a tracking system where all pharmaceuticals that are covered by the reimbursement system have a tracking code. The code is used to
trace all the drugs along the supply chain and the distributors are obliged to report from and to
whom the pharmaceuticals are distributed, to both the Ministry of Health and the autonomous regions. This information is used to control that none of the reimbursed drugs are exported.
The tracking system is also used by the wholesalers to provide information to the pharmaceutical
industry in order to show that the contracts are adhered. It is only when the wholesale distributor
can show that the products have been sold within Spain that they will be remunerated for the price
difference between the “regulated price” and the unregulated “free price”. If the wholesale distributor does export the products there will be no financial compensation and this way the exported
drugs will be sold to the higher price. This system results in a double price model, one price for the
domestic market and one when products are exported to other Member States of the EU.40
A consequence of the tracking system is that patient information is shared, a fact that the “The Federation of Spanish Pharmacists, the Association of Spanish Exporters of Pharmaceuticals” has objected to. They challenged the legality of the Royal Decree of 2003 and the Spanish Company for the
Development and Pharmaceutical Incentive on the two rulings in June 2005 but the Spanish Supreme
Court ultimately upheld the law.
At the end of 2005, another entity, the National Association of Consumers and Users of Healthcare
Services (ASUSALUD), once again questioned the law, this time over patient data and privacy issues.
Interviews with distributors in Spain confirmed that patient data is indeed shared along the distribution chain because of the need to track where and to whom drugs are sold for proper reimbursement
by the government healthcare system.
39
Birgli, (2012), “An Evaluation of Medicines Shortages in Europe with a more in-depth review of these in France, Greece,
Poland, Spain, and the United Kingdom.
40
Birgli, (2012), “An Evaluation of Medicines Shortages in Europe with a more in-depth review of these in France, Greece,
Poland, Spain, and the United Kingdom.
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4.4 Pharmacies
Pharmacies, like the wholesalers, are also strictly regulated in Spain. The regulations apply for opening a pharmacy and take into account both geographic and demographic criteria and in addition, a
qualified pharmacist must own the pharmacy. For this reason, vertical market integration where
pharmacy chains are established is not possible in Spain. The reason behind restricting the pharmacy
ownership is to assure independence and that the Spanish citizens receive independent advice. 41
Both prescription-only and non-prescribed pharmaceuticals are only available at pharmacies. To ensure sufficient supply to meet the demand, there is a national law requiring pharmacies to carry a
minimum stock of pharmaceuticals. The Spanish General Council of Pharmaceutical School is responsible for ensuring efficient distribution and the availability of medical products.
There are more than 21,000 pharmacies spread throughout the country. In 2008 there were 2,192
inhabitants per pharmacy – to be compared with countries like Sweden which have approximately
10,000 inhabitants per pharmacy. Data show that this in combination with low-priced drugs, when
compared to all other EU member countries, results in the Spanish pharmacies having the lowest
average price of drugs and the lowest average sale per pharmacy in Europe. 42
4.4.1 Pharmacies’ role in the distribution chain
Pharmacies in Spain play an important role in the health value chain because they the point of sale
for medicinal products to the Spanish consumers. The three issues related to the pharmaceutical
distribution process that pharmacists are primarily concerned with are 1) having to manage with a
more complex distribution model, 2) medicine shortages and 3) decreased profitability.
The new distribution model and the free pricing arrangement are affecting both the wholesale distributors, that no longer are able to provide a full stock, and to a high extent the pharmacies that are
in direct link with the end users and patients. The pharmacies rely on a continuous supply of all medical products from one single source and in the shortest possible time, which can be provided by the
traditional distribution process with full line distributors.
There have been several reports focused on the consequence of this new distribution chain and an
inefficient distribution process. Data clearly shows that the full line wholesale distributors add a value to the distribution chain in terms of efficiency and service levels. The pharmaceutical industries’
arrangements have resulted in more administrative work and limited margins for the pharmacies.
The traditional distribution model allows the pharmacy to purchase all pharmaceuticals from one or
a limited number of distributors and to have frequent deliveries, therefore not needing an extensive
stock. The trend is now instead that extra personnel time is required for ordering since not all drugs
41
Interview with employee at The Spanish General Council of Pharmaceutical Schools (Consejo General de Colegios Farmath
ceuticos), 15 of January 2014.
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are available from one source, which prevents bundling of orders and pooling of drugs. Pharmacies
instead need to place orders with all the different manufacturers43.
4.5 Patients
The distribution process ends with the patients accessing pharmaceuticals to a high degree from the
pharmacies. The patient’s primary concern in addition to safety and efficacy is availability of innovative therapeutics and to a lesser extent price. Many of the regulations approved by the Spanish authority are adopted in order to protect the Spanish citizens and ensuring national availability of
pharmaceuticals. This study has however found that several arrangements that have been implemented by the pharmaceutical industry have a negative effect on the user. Today the Spanish authority is tolerating the arrangements and this can in the long term instead lead to a shortage of
drugs due to the economic situation for the wholesalers and pharmacies. Trends where new distribution models are formed also affect the end user when pharmacies are not able to provide full service.
Deliveries of drugs are occurring less often compared to in the traditional wholesale distributor process, leading to temporarily shortages and patient not having access to their medication. As described in the earlier section the new distribution models also lead to more administrative work for
the pharmacies which affect the service levels at the pharmacies.
5 Final Remarks
This study found that the free price system used in Spain is a limitation of free trade and parallel
trade within the single market. It is harmful to Europe’s sustainable competitiveness, its innovativeness and is in addition harmful to European consumers overall. The system is used by Pharmaceutical
manufacturers to partition the European market into closed national markets by eliminating the possibility of exports to higher price markets. This allows the industry to maximize profits by price discrimination between EU Member States, charging the highest possible price in each national market
and thereby exploiting differences in the willingness to pay of health authorities and patients across
the European single market.
Pharmaceutical companies are also looking for new ways to limit parallel trade through detailed contractual agreements with wholesalers as well as through new distribution models. This has overall
resulted in a high pressure on the wholesale distributors affecting the possibilities for an effective
distribution from manufacturer to end consumer. As a consequence the wholesale distributors are
not able to offer a full stock, and pharmacies face more administrative work and limited margins.
This will in the end affect their ability to offer full service to the patients.
This study did not find conclusive evidence that could justify a serious limitation to free trade within
the single Market, a trade which is more or less unanimously seen as a cornerstone for Europe’s wel-
43
Institute of Pharmaeconomic research (IPF), (2012), “Distribution profile and efficiency of the European pharmaceutical
full-line wholesaling sector”.
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fare and sustainable competitiveness. Reoccurring arguments to justify the limitation of free trade
such as ensuring drugs availability and minimised R&D investments can through this report be shown
to be false. Drug shortage occurs due to global manufacturing problem or targeted national problem
that always is caused by the supply management of the industry. Allowing inflexible quota systems
designed by pharmaceutical companies is always problematic and can at least temporarily lead to
shortages and in medium term cause big problems for the downstream distribution channels.
Another reoccurring argument used by the pharmaceutical industry is the need for R&D investments
and that high profits will be reinvested in further development. There has however not been possible
to find any evidence for this argument and there is today no causal link between profits, parallel
trade and R&D investments. In addition to that, pharmaceuticals are sold on a global market and the
pharmaceutical industry is known to be highly profitable. The 10 largest drugs companies control
over one-third of this market, several with sales of more than US$10 billion a year and profit margins
of about 30%44. This can be compared to parallel trade that has about 3% market share of the total
European market and only appears within the European Union. The effect on profits of a globalized
industry is therefore very limited.
44
World Health Organisation, Pharmaceutical Industry (2014).
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Appendix 1 – Health Technology Assessment
The Spanish pharmaceutical market cannot be understood without taking into account European
framework conditions. The EU (always referring to the European Economic Area (EEA)) and its Member States differentiate between EU regulated and nationally regulated segments. Overall the social
system can be divided into three types:
a) State Driven (National Health System/NHS; tax financed, e.g. Spain),
b) “Bismarck System” (Statutory Health Insurance System/GKV; financed by employer/employee, e.g. Germany) and
c) “Freedom to decide” (if and which insurance(s) people choose, e.g. U.S.).
Each system ensures reimbursement of defined benefit packages. Systems in the EU are based on
either a) or b) and cover approximately 98% of the population.
For Market Approval (MA) regulators (EU: EMA/EC, Member States: Competent Authorities) evaluate
(1) quality, (2) safety, and (3) efficacy. For Market Access (Mac) new drugs must overcome the last
hurdle, (4) Health Technology Assessment (HTA), which determines whether or not the new drug
therapy is reimbursable as well as the reimbursement price. Obtaining Market Access (reimbursement) is extremely complicated but important for the profitability of the proposed therapy given the
reliance on and the economic importance of national healthcare systems. To obtain Mac companies
have to follow the nationally applicable regulations implemented by the respective national Health
Technology Assessment institutions. Figure 9 provides a step-by-step overview of the procedure a
drug has to pass to qualify for reimbursement. Regarding financial reimbursement, Spain stands out
from other Member States as Spain typically grants lower reimbursement prices than the EU average
for innovative patent-protected drugs.
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Figure 9: Focus of the Health Technology Assessment (HTA) process as can be considered and regarded as general model.
Source: Lilly and Company 2013
Subsequently the national institutions in charge are labelled “HTA”. The European Cooperation of
HTAs is EUnetHTA. Within the HTAs, increasingly the trend has been for greater information exchange with particular focus on the pricing of new innovative patent-protected drugs.
To better understand the process for Mac or reimbursement, an overview is provided below:
1. Market Approval – main pathways
Centralised: In the EU, drugs are governed by EudraLex the body of regulations governing medicinal
products for human and veterinarian consumption. In regards to human drugs EU provides a catalogue of indications making a central market authorization mandatory. Products that must use the
centralised procedure include the following:
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all biologic agents or other products using high-technology procedures
products for HIV/AIDS, cancer, diabetes, neurodegenerative diseases, auto-immune and other immune dysfunctions and viral diseases
products for orphan conditions
The approval is based on a recommendation from the EMA and a legal decision made by the European Commission (EC=Regulator).
Decentralised: For products that fall outside the scope of the EMA with regard to centralised procedures, a sponsor can submit under the decentralised procedure. Using this process, a sponsor can
apply for simultaneous authorization in more than one EU country for products that have not yet
been authorised in any EU country.
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Mutual recognition: With the mutual recognition procedure, a product is first authorised by one
country in the EU in accordance with the national procedures of that country. Later, further market
authorization can be sought from other EU countries, who, rather than conducting their own review,
agree to recognise the decision of the first country.
National: The national regulators (often referred to as Competent Authorities (CA)) will decide on
the application for market approval. Having this type of MA allows for a simplified MA application
procedure in other Member States.
2. Market Access – release or refusal of reimbursement
To obtain Market Access one must follow the nationally applicable regulations implemented by establishing the respective national HTA institutions. The chart in Figure 10 demonstrates the step-bystep procedure a drug has to pass in order to gain reimbursement approval. As it relates to the financial results of MAc, Spain can be seen as an important exception from the other Member States because of lower prices, on average, for innovative patent-protected drugs.
Figure 10: Archetype of an HTA process provides the pathway more in detail. Source: Lilly and Company 2013
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Appendix 2 - References
5.1 Publications
”Drug Firms Urge Price Action; Steep Discounts in 5 European Nations Create Shortages”, 25 June
2012, Wall Street Journal. Retrieved from:
http://online.wsj.com/news/articles/SB10001424052702304870304577488041346373860
Birgli, (2012), “An Evaluation of Medicines Shortages in Europe with a more in-depth review of these
in France, Greece, Poland, Spain, and the United Kingdom”. Retrieved from:
http://www.eaepc.org/medien/an-evaluation-of-medicines-shortages-in-europe-with-a-more-indepth-review-of-these-in-france-greece-poland-spain-and-the-united-kingdom.pdf
Blanquez Palasí,L.(2011), “The Spanish National Court applies the ECJ "dual pricing" ruling to quash a
decision by the Spanish Competition Commission concerning prices imposed to wholesalers by
pharmaceutical company (Pfizer)”, e-Competitions, No39274, 13 June 2011. Retrieved from:
http://www.concurrences.com/abstract_bulletin_web.php3?id_article=39274
Costa-Font, J.;Kanavos, P., (2004), “Paralel Trade of medicine in the EU: Regulations and Evidence”
(“Comercio paralelo de medicamentos en la UE Regulación y evidencia”), Farmacia Profesional, Vol.
18, Nº. 11 (December), pag. 12-19, Farmacia Profesional.
Deloitte centre for health solutions, (2013), “Impact of austerity on European pharmaceutical policy
and pricing, staying competitive in an challenging environment”. Retrieved from:
http://www.deloitte.com/assets/DcomSwitzerland/Local%20Assets/Documents/EN/LSHC/ch_en_impact_of_austerity_on_pharma_policy_and_pri
cing.pdf
Desogus, C. (2007), “Strategic pricing and antitrust issues in the European pharmaceutical market:
the case of dual pricing?”. Retrieved from: http://www.sideisle.it/ocs/viewpaper.php?id=102&cf=1 Last viewed; 2014.02-17
Desogus, Claudia, (2008), ” Antitrust issues in the European pharmaceutical market: an economic
analysis of recent cases on parallel trade”. Retrieved from:
http://www.upf.edu/cres/_pdf/wp60_desogus.pdf
EAEPC, (2005) “Understanding Competition in the Distribution of Pharmaceutical Products in European analysis of the application of Article 82 EC too supply restrictions in the pharmaceutical sector”.
Retrieved from: http://www.eaepc.org/medien/eaepc-article-82-study-september-2005.pdf
EAEPC, ”What challenges do parallel distributors face?”. Retrieved from:
http://www.eaepc.org/en/challenges/
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EAEPC, Kobelt,H. (2013), “Comment: Spanish National Appeals Court finds dual pricing in the
pharmaceutical sector anti-competitive”. Retrieved from:
http://docs.noodls.com/viewDoc.asp?filename=129195/ATTACH/2C3A523B68A9D0CF721566D5481
FB82DA239AFF8_A6F194CB365FC45B2A89F7E4314E6A77CB166A57_ATT001.PDF
EAEPC,Adefarma, (2007), “ The european medicine distribution takes legal actions against the
proliferration of double-price systems in Spain.” (“La Distribución Europea de Medicamentos
emprende acciones Legales contra la proliferación de Practicas de doble prico en España”). Retrieved
from: http://www.adefarma.es/docs/doblesprecios.pdf
Espin, J., Rovira, J. (2007) “Analysis of differences and commonalities in pricing and reimbursement
systems in Europe”, DG Enterprise and Industry of European Commission, Retrieved from:
http://ec.europa.eu/enterprise/sectors/healthcare/files/docs/study_pricing_2007/andalusian_schoo
l_public_health_report_pricing_2007_en.pdf
Europapress, Press Release February 6 2013, The pharmacies denounce that the industrie adopts a
double price for drugs in relation to them being co-financed or not”, (“Las farmacias critican que la
industria fije un "doble precio" para medicamentos en función de si son financiados o no”.), Madrid.
Retrieved from: http://www.europapress.es/salud/farmacia/noticia-farmacias-critican-industria-fijedoble-precio-medicamentos-funcion-si-son-financiados-no-20130206184303.html
European Federation of Pharmaceutical Industries and Association (EFPIA), (2013),“The Pharmaceutical Industry: A Key asset to scientific and medical progress”. Retrieved from:
http://www.efpia.eu/uploads/Figures_Key_Data_2013.pdf
Farmaindustria , News feed from the 25th of September 2013. “The investment in I+D of the
pharmaceutical industry in Spain in 2012 was 972 million euros” (“La inversión en I+D de la industria
farmacéutica en España en 2012 fue de 972 millones de euros”). Retrieved from
http://www.farmaindustria.es/web/prensa/notas-de-prensa/2013/09/25/la-inversion-en-id-de-laindustria-farmaceutica-en-espana-en-2012-fue-de-972-millones-de-euros/
Farmaindustria, Bulletins 84 April 2012, “The Pharmaceutical Market in Spain”. Retrieved from:
http://www.farmaindustria.es/idc/groups/public/documents/publicaciones/farma_116408.pdf
Farmaindustria, News feed February 2014,”The pharmaceutical producers start to look for talents
again after reducing staff by 15% (” Los laboratorios vuelven a fichar talento tras bajar un 15% la
plantilla”. Retrieved from:
http://www.farmaindustria.es/Farma_Public/Noticias/Medios/FARMA_124461?idDoc=FARMA_1244
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Hénin, C. (2011), “Parallel trade and pharmaceuticals in the EU: current issues”. Retrieved from:
http://uk.practicallaw.com/5-518-2417?service=ipandit
IMS ,(2011), “ISM Health study report”. Retrieved from: http://www.imshealth.com/
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Institute of Pharmaeconomic research (IPF), (2012), “Distribution profile and efficiency of the European pharmaceutical full-line wholesaling sector”, Vienna. Retrieved from: http://www.ipfac.at/uploads/media/GIRP_IPF_clean_FV_120112.pdf
Kanavos, Panos, Schurer, Willemien and Vogler, Sabine, (2011), “The pharmaceutical distribution
chain in the European Union: structure and impact on pharmaceutical prices. European Commission”, Brussels, Belgium. Retrieved from: http://eprints.lse.ac.uk/51051/
Montesa Lloreda, A. “Parallel trade in the pharmaceutical Industry from a competition point of
view”, EU Competition Law in Contest: Essays in Honour of Virpi Tiili, ed. by Kanninen,H. , Korjus,N.
and Rosas,A, Oxford publishing
Morgan, O. (2008), “Parallel trade in drugs puts EU patients at risk”, The Observer, Sunday 29 June
2008, Retrieved from: http://www.theguardian.com/business/2008/jun/29/pharmaceuticals
Paz-Ares, T., Menéndez, U, (2012), “Lawfullness of free pricing models for pharmaceutical products in
Spain: Is there really an open debate?”. Retrieved from:
http://www.uria.com/documentos/publicaciones/3470/documento/tpa_1212.pdf?id=4256
Pharmaceutical federation of distributors in Spain FEDIFAR, (2013), “Sectorial Analysis of the
pharmaceutical distribution in Spain”(“Análisis sectorial de la distribución farmacéutica en España”),
Rerieved from : http://www.fedifar.net/images/54804-INF_FEDIFAR.pdf
Philipson A. (2001), “Guide to the concept and practical application of articles 28-30 EC. Brussels:
Commission of the European Communities”, DG Enterprise. Retrieved from:
http://www.civitas.org.uk/pdf/ParallelTradeUK.pdf
SCRIP Insight, (2012),” Key Findings: Spain Pharmaceutical Market Overview, Continued stagnation as
generics and price cuts erode market value”. Retrieved from:
http://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=2&ved=0CCYQFjAB&ur
l=http%3A%2F%2Fstore.datamonitorhealthcare.com%2FDownload%2FToc%2F%3FproductId%3DA01
881DE-9BE5-4B04-AA2D14269EEB673D&ei=ylGxU4jJGMXhywOT9YLoDQ&usg=AFQjCNHLmGkHnwvqiExgriGrRFENzkRKtA&bv
m=bv.69837884,d.bGQ
US Department of Commerce, International Trade Association, (2004), “Pharmaceutical Price controls in OECD countries, Implications for US consumers, pricing Research and development and innovation”. Retrieved from : http://www.ita.doc.gov/td/chemicals/drugpricingstudy.pdf
Vogler, Sabine, Jaime Espin, and Claudia Habl.(2009) "Pharmaceutical pricing and reimbursement
information (PPRI)–New PPRI analysis including Spain." Pharmaceuticals Policy and Law 11.3 (2009):
213-234.
5.2 Figures and statistics
Consejo Oficial de Colegios Oficiales de Farmacéuticos. Retrieved from: www.portalfarma.com
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Eurostat, “Export of Medicinal and pharmaceutical products in Euros“. Retrieved from:
http://epp.eurostat.ec.europa.eu/portal/page/portal/international_trade/data/database
Farmaindustria Annual Report 2012. Retrieved from:
http://www.farmaindustria.es/idc/groups/public/documents/publicaciones/farma_122438.pdf
InvestinSpain (2012), ICEX España Exportación e Inversiones. Retrieved from:
http://www.investinspain.org/invest/es/index.html
Ministerio de Sanidad, Servicios Sociales e Igualidad. Retrieved from:
https://www.msssi.gob.es/profesionales/farmacia/datos/home.htm
OECD, (2013), “Spain Pharmaceutical expenditure as a percentage of total expenditure on health”.
Retrieved from: http://www.oecd-ilibrary.org/social-issues-migration-health/pharmaceuticalexpenditure-2013-2_pharmexp-table-2013-2-en
Organization for Economic Cooperation and Development (OECD). Retrieved from:
http://www.oecd-ilibrary.org/social-issues-migration-health/data/oecd-health-statistics_healthdata-en
Spain’s Major Business Sectors 2011. Retrieved from: http://www.s-ge.com/en/filefieldprivate/files/2724/field_blog_public_files/5802
Spanish Pharmaceuticals import/export. Retrieved from: http:pharmacy.europages.co.uk-companiesSpain-Pharmaceuticals%20%E2%80%93%20import-export.html
World Health Organisation, Pharmaceutical Industry (2014). Retrieved from:
http://www.who.int/trade/glossary/story073/en/
5.3 Law & Legal Cases
Court of Justice of the European Union, CVRIA. Judgement of the court:
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Joined Cases C-427/93, C-429/93, C-436/93. Bristol-Myers Squibb contra Paranova [1997]
ESR 102
Case C-443/99. Merck, Sharp & Dohme GmbH contra Paranova Pharmazeutika Handels
GmbH, 1999.
Case C-143/00. Boehringer Ingelheim GmbH, Glaxo Group Ltd y otros contra Dowelhurst Ltd
y Swingward Ltd, 2000.
Case C-267/95 y C-268/95. Merck y otros contra Primecrown y otros, y Beecham Group
contra Europharm of Worthing. Sentencia de 5 de diciembre de 1996.
Case T-41/96. Bayer AG contra la Comisión de las Comunidades Europeas. Sentencia de 26 de
octubre de 2000.
Case C-433/00 Aventis Pharma Deutschland GmbH contra Kohlpharma GmbH y MTK Pharma
Vertrieb-GmbH. Comentario de 19 de septiembre de 2002.
Joined Cases: C-501/06 P, C-513/06 P, C-515/06 P and C-519/06. Aseprofar v GlaxoSmithKline
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Case C-2/01PyC-3/01P. Bundesverband der Arzneimittel-Importeure eV and Commission of
the European Communities v Bayer AG.
Ley 29/2006, de 26 de julio, de garantías y uso racional de los medicamentos y productos sanitarios
(“Law on the garantie and rational use of medicine and sanitarian products”). Retrieved from:
https://www.boe.es/buscar/act.php?id=BOE-A-2006-13554&tn=1&vd=&p=20130725&acc=Elegir
Mayer & Brown, EU & UK Antitrust/Competition Legal Alert, (2008). Retrieved from:
http://www.mayerbrown.com/files/Publication/cfd899bb-27c9-4559-a04c313665036433/Presentation/PublicationAttachment/97c3adf0-ac28-487f-b65b5280082dbb35/newsl_antitrust_21apr08_legal_alert_ag.pdf
Article 70 (Artículo 70. Exigencias de funcionamiento) Retrieved from:
https://www.boe.es/buscar/act.php?id=BOE-A-2006-13554&tn=1&vd=&p=20130725&acc=Elegir
The Spanish constitution, Available at:
http://www.tribunalconstitucional.es/Lists/constPDF/ConstitucionINGLES.pdf
European Commission, Pharmaceuticals & Health Services, February 2014. Retrieved from:
http://ec.europa.eu/competition/sectors/pharmaceuticals/overview_en.html
5.4 Institutions/organizations
Agencia Española de Medicamentos y Productos Sanitarios AEMPS, http://www.aemps.gob.es
Asociación Española de Medicamentos Genéricos, http://www.aeseg.es/en/
ADEFARMA Associacíon de Farmacéuticos de Madrid, http://www.adefarma.es
Consejo General de Colegios Farmaceuticos,
http://www.portalfarma.com/inicio/colecconconsejo/Paginas/coleccionconsejo.aspx
Centro Farmacéutico Nacional, http://www.cfn.es
Consejo General de Colegios Medicos de Espana, https://www.cgcom.es
Federacion Nacional de Asociaciones de Mayoristas Distribuidores de Especialidades Farmacéuticas y
Productos Parafarmacéuticos, http://www.fedifar.net
Instituto de Salud Carlos III (Organismo Público de Investigación (OPI), que financia, gestiona y
ejecuta la investigación biomédica en España.), http://www.isciii.es/ISCIII/es/contenidos/fd-elinstituto/quienes-somos.shtml
Instituto Nacional de Gestion Sanitaria, http://www.ingesa.msssi.gob.es
Laboratorios Juventus S.A. de Madrid, http://www.juventus.es
Ministerio de Sanidad y Consumo, http://www.msssi.gob.es
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Organización de Consumidoies y usarios (OCU), http://www.ocu.org/salud/medicamentos
Sistema de Autorregulación, http://www.codigofarmaindustria.es
5.5 Interviews
Interview performed with the Director for European Affairs of The European Association of EuroPharmaceutical Companies (EAEPC), Heinz Kobelt, 27th of February 2014.
Interview performed with Spanish pharmaceutical expert and cofounder-director of the company
Excelsia Pharma Strategy Consulting, 6th of March 2014.
Interview performed with current employee and researcher of Spanish National Cancer Research
Centre, Development and Disease Group, 5th of February 2014.
Interview performed with employee from COFARTE La Cooperativa Farmacéutica de Tenerife, a
pharmaceutical distribution company from Tenerife, 27th of February 2014
Interview with Spanish small business owner and distributor of pharmaceuticals from Spain, 28th of
November 2013
Interview performed with employee at The Spanish General Council of Pharmaceutical Schools (Consejo General de Colegios Farmaceuticos), 15th of January 2014
Interview with Patient and pharmaceutical consumer, living in Barcelona, 6th of March 2014
Interview with Patient number 2 from Granada, 6th of March 2014
Interview with doctor from Marbella whose expertise turns to the international patients visiting/living in Spain, 21st of February 2014
Interview with an expert in bringing innovative pharmaceuticals to the market, Managing Director at
Gensoric GmbH, 20th of February 2014
Interview with a pricing expert with a background in the pharmaceutical market, 15th of January 2014
5.6 Wholesale distributors included in the desk research
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Acofarma, http://www.acofarma.com/es/
Alliance Healthcare Zaragoza, https://www.alliance-healthcare.es
Cecofar Sevilla, https://www.cecofar.es
Cefana Madrid, http://www.cfn.es
Cenfarte Santander, http://www.cenfarte.es/joomla/
Centro Farmaceutico Valencia,
https://www.centrofarmaceutico.es/index.php?option=com_content&view=article&id=116
&Itemid=205
Cofabu, http://www.cofabu.com
Cofacir-Ciudad Real, http://www.cofarcir.es
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Cofaga, https://seguro.cofaga.org
Cofamasa Madrid, http://www.cofamasa.com/indice2.jsp
Cofano Pontevedra, https://online.cofano.org/index.asp
Cofaran-Farmanova Malaga, http://www.cofaran.es
Cofarca-Farmanova-Las Palmas, http://www.cofarca.es
Cofarcu-Cuenca, http://www.cofarcu.com
Cofarle-Leon, http://www.cofarle.com/portal/ebusiness/ecommerce
Cofarme Menorca, http://www.cofarme.com
Cofarta Toledo, http://www.cofarta.com
Cofarte Farmanova Tenerife, http://www.cofarte.com
Cofas Oviedo, http://www.cofas.es
Cofex-Farmanova-Caceres, http://www.cofex.es
Coofamel-Mellilla, https://www.coofamel.com
Cooperativa apotecaris, http://www.coop-apotecaris.es
DFG-Distribuidora Farmaceutico de Guipuzkoq, https://www.ufg.es
Difale-Lleida, http://www.difale.cat/web3/index.php/ca/
Euroserv-Alicante, http://www.euroserv.es/gestiserv/indice2.jsp
Farmanosa- A Coruna, https://www.gruposanal.es
Federacio Farmaceutica-Barcelona, http://www.fedefarma.com/Castellano/Pages/Inici.aspx
Gicofa-Cadiz, http://www.gicofa.org
Grupo Cofares, https://www.cofares.es/wps/portal/cofares/web/inicio
Hefagra-Farmanova-Almeria, http://www.hefagra.es/index.php?id=98
Jafarco-Farmanova-Jaen, http://www.jafarco.com
Nafarco-Navarra, http://www.nafarco.com
Riofarco-La Rioja, http://www.riofarco.com
Socofasa-Salamanca, http://www.socofasa.com/portal/ebusiness/ecommerce
Xefar-Farmanova-Cadiz, https://www.xefar.com/inicio/i-quienes-somos-.html
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