WRITTEN QUESTION E-4002/97 by Elly Plooij-van Gorsel (ELDR) to the Commission (14 January 1998)

Subject: European stock management system by pharmaceutical undertaking

Since 1 March 1996 MSD has been using a European stock management system for seven important drugs. The amount of the drug available per six months per client (i.e. pharmaceutical wholesaler) is based on the sales forecasts for each of these drugs. These forecasts are drawn up on the basis of sales over the previous six months, adjusted by an anticipated growth factor per product. MSD reserves the right not to supply all orders which go above the forecast.

1. Is the Commission aware of a European stock management system for seven important drugs which has been applied since 1 March 1996 by MSD?

2. Is such a system compatible with the competition rules which apply on the internal market? If not, what does the Commission intend to do?

3. What action is the Commission taking to ensure that the drug producers in the Member States can determine the price of their drugs under the same conditions so that such stock management systems are no longer necessary as a protection against parallel imports? What are the results of this action?

Answer given by Mr Van Miert on behalf of the Commission (19 February 1998)

1. The Commission can confirm that MSD International Services has indeed been applying a European stock management system for its most important drugs since 1 March 1996.

2. The European stock management system was notified to the Commission under Council Regulation 17/62, the first Regulation implementing Articles 85 and 86 of the EC Treaty ((OJ 13, 21.2.1962. )), on 1 March 1996 (Case IV/35.928/F3).

The Adalat case (Commission Decision 96/478/EC of 10 January 1996 relating to a proceeding under Article 85 of the EC Treaty ((OJ L 201, 9.8.1996. ))), which raises similar problems, is currently before the Court of First Instance. The Commission considers it necessary to await the Court's decision before taking a position on the MSD case.

3. Most of the Member States have taken economic measures dealing with the sale of medicinal products in order to control public health expenditure on them. The measures often include direct or indirect control of drug prices aimed at remedying the lack or non-existence of competition on the pharmaceuticals market, as well as restrictions on the range of products covered by national health insurance systems. Such measures are compatible with Community law provided they do not discriminate against products imported from other Member States and comply with the transparency requirements in Council Directive 89/105/EEC of 21 December 1989 relating to the transparency of measures regulating the prices of medicinal products for human use and their inclusion in the scope of national health insurance systems ((OJ L 40, 11.2.1989. )).

The Commission has initiated a dialogue with the Member States and socio-economic partners concerned, especially the pharmaceutical industry, on the question of the completion of the internal market in this area as well. The discussions, which opened at the Frankfurt round-table meetings in December 1996 and December 1997, should be resumed shortly at the level of an Internal Market Council.