BAPIE

Its legality has been recognized by the Court of Justice of the European Union since 1976. Parallel trade of a medicinal product is a lawful form of trade within the Internal Market based on article 34 of the Treaty on the Functioning of the European Union (TFEU) and subject to the derogations regarding the protection of human health and life and the protection of industrial and commercial property, provided by article 36 of the TFEU. The Court has ruled (Case C 44/01 delivered on April 8, 2003 paragraph 63 of the judgement) that “in completing the Internal Market as an area without internal frontiers in which free competition is to be ensured, parallel imports play an important role in preventing the compartmentation of national markets”. The European Court of Justice has repeatedly confirmed that medicinal products are not exempted from the rules of the Internal Market and has condemned State measures, which restrict, without appropriate justification, parallel imports of medicines.

With a specific authorization from the government in the country of destination for the medicine, the parallel trader can sell it to wholesalers or direct to pharmacies. The parallel trader must bear costs associated with regulatory compliance, purchasing, transport, warehousing, insurance, repackaging, quality assurance, distribution and promotion. All medicines – including parallel traded ones – are strictly regulated by either national health authorities in Belgium : AFMPS/FAGG or by the European Medicines Agency. Parallel traded products need marketing authorizations, and parallel traders must possess manufacturing authorizations if they make changes to the label or outer package demanded by local law. Parallel traders need wholesale dealing authorizations too.

Parallel trade is uncontrovertibly safe. Even if their supplies cross EEA internal borders (which manufacturers often consider a ‘complex’ supply route), the supply chain of parallel trade is resilient in terms of quality assurance as well as against the entry of falsified products into the legal supply chain. Several business routines make up this result:

• Parallel traders are subject to the same regulatory requirements as manufacturers of branded or generic products and undergo regular controls by the competent national and European regulatory authorities.
• Parallel traders do not manufacture any medicines themselves, nor open the primary packaging (unless in some cases, e.g. if the primary packaging is a tablet container, in which case repackaging is carried out in such conditions that the inner product is not affected).
• Parallel traders buy finished medicinal products from exporters who are well-established and authorized pharmaceutical wholesalers.
• Parallel traders do not deal directly with the consumers either, rather the parallel trader’s customer is another licensed wholesaler, a registered pharmacy or a dispensing doctor.
• All transactions are conducted through officially authorized and controlled trade channels.
• A wholesale business or a pharmacist simply has one more source to purchase medicines from, which enhances the robustness of the medicines supply chain when manufacturers try to curtail supplies.
• Parallel traders can perform product recalls as quickly and effectively as any other participant in the medicines supply chain.
• Exporters and importers both apply internal supply chain controls including product verification and supplier verification and audit, and must meet stringent external regulatory checks to guarantee patient safety.
• Parallel traders take pride in being reliable, responsible and professional business partners for wholesalers and pharmacists in community and hospital practice. In particular, BAPIE members follow a strict and long-standing Code of Operational Conduct and good practice guidelines for parallel distribution to which all members have subscribed. The BAPIE and Afforable Medicines Europe (European organization of the companies importing and exporting medications in Europe)  is dedicated to ensuring the European supply chain remains free of counterfeit medicines and is actively engaged in the on-going debate. Pharmaceutical inspectors have several times highlighted the ability of parallel traders in their repackaging operations to identify and eliminate suspicious packages before they reach patients – an effective line of defense in the fight against falsified medicines. Afforable Medicines Europe (and BAPIE and its national Belgian affiliates) are active in the implementation of the Falsified Medicine Directive; Afforable Medicines Europe is one of the 5 founding members of the EMVO (European Medicines Verification Organization). Similarly, BAPIE is one of the founding members of the BeMVO (Medicine Verification Organization for Belgium) and of the LMVO (for Luxembourg).

There is no evidence that parallel trade has a negative impact on R&D in Europe. The costs of all parallel imported products are paid to the manufacturer at the price requested in the source market pricing principles allow for the recouping of R&D costs, hence every market pays for R&D. Parallel trade represents only a very small part of the total European pharmaceutical market, accounting for only around 3-4% of total sales. Whilst innovation in the pharmaceutical industry is vital for the development of new medicines, R&D represents only around 15% of the budget of most pharmaceutical manufacturers. Manufacturers have higher expenditure in other areas, such as sales and marketing, where they spend almost twice as much as they spend on R&D.