Differentiated pricing must show objective efficiency gains to justify exemption under Article 81(3) EC.

European Court of Justice · Judgment

(Competition – Wholesale distribution of medicines – Parallel trade – Differentiated prices – Article 81(1) EC – Agreement – Restriction of competition – Object – Relevant market – Effect – Article 81(3) EC – Contribution to the promotion of technical progress – No elimination of competition – Evidence – Statement of reasons – Subsidiarity)

Rechtsvraag

The central legal issue is whether the General Sales Conditions imposed by GlaxoSmithKline Services Unlimited (GSK) on Spanish wholesalers constitute an infringement of Article 81(1) EC, by restricting competition, and whether an exemption under Article 81(3) EC is applicable.

Regel

  • art. 81(1) EC (Treaty Establishing the European Community) (Prohibits agreements between undertakings that prevent, restrict, or distort competition within the common market)
  • art. 81(3) EC (Treaty Establishing the European Community) (Allows for exemptions if agreements contribute to improving production or distribution of goods or promoting technical or economic progress)
  • art. 253 EC (Treaty Establishing the European Community) (Requires decisions adopted by the Commission to state the reasons on which they are based)

Conclusie

The Court annulled Articles 2, 3, and 4 of the Commission's Decision, rejecting GSK's exemption request under Article 81(3) EC, due to an inadequate examination of evidence related to efficiency gains. However, the Court upheld the finding that GSK's General Sales Conditions had the effect of restricting competition under Article 81(1) EC, but not as an object. The Commission is required to reassess the exemption request, taking into account the evidence presented by GSK.

Tijdlijn

  1. 21-12-1988 The Council adopted Directive 89/105/EEC to ensure transparency in national measures regulating medicine prices and their inclusion in national health insurance systems.
  2. 20-12-1990 The Kingdom of Spain adopted Law 25/1990 on medicines, establishing a system of intervention on the maximum wholesale price of medicines reimbursed by the Spanish sickness insurance scheme.
  3. 23-02-1990 Spain adopted Royal Decree 271/1990 to reorganize interventions in the prices of pharmaceutical products for human use, in compliance with Directive 89/105/EEC.
  4. 06-03-1998 GW notified the Commission of its 'General Sales Conditions' for pharmaceutical specialities, seeking negative clearance or an exemption under Regulation No 17.
  5. 09-03-1998 The General Sales Conditions came into force, applying differentiated pricing for medicines based on their intended resale and reimbursement location.
  6. 16-10-1998 The application of the General Sales Conditions was suspended.
  7. 08-05-2001 The Commission adopted a decision finding that GW's agreement with Spanish wholesalers infringed Article 81(1) EC by implementing differentiated pricing based on the resale location.
  8. 23-07-2001 GSK lodged an application at the Court of First Instance seeking annulment of the Commission's Decision 2001/791/EC.
  9. 27-09-2006 The Court delivered its judgment, annulling parts of the Commission's decision and rejecting others, thereby partially granting GSK's application.