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Burgess Hill, 11th October 2007 |
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Roche settles parallel import claim
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Roche reaches settlement with Munro Wholesale Medical Supplies on ACCU-CHEK trademark infringement claim
Roche Diagnostics GmbH (Roche) and Munro Wholesale Medical Supplies Limited (Munro) have reached an out of court settlement in the UK in respect of Roche's claim against Munro for alleged dealings in ACCU-CHEK products which Roche considered to infringe its trade marks. The case was settled on the basis that Munro agreed not to import or otherwise deal in ACCU-CHEK products brought into the EEA without Roche's consent. Munro also offered cooperation and assistance to Roche in support of Roche's efforts to halt importation of ACCU-CHEK products into the EEA without Roche's consent.
Roche had also recently obtained a summary judgment against another parallel importer in relation to similar products imported into the EEA via different channels.
A spokesperson for Roche further commented:
"We are delighted that we have been able to reach agreement with Munro in this case and are keen to see a level playing field free of non EEA parallel imports. The presence of such infringing products in the market creates unfair competition and generates liability for companies operating at all levels of the supply chain. Munro's cooperation is further progress towards driving such products off the market".
Unlawful Parallel Trade - Frequently Asked Questions
When is parallel trade unlawful?
Parallel importation occurs where original, genuine goods that have been sold in one market with the trade mark owner's consent are then imported into a second market for resale without the trade mark owner's consent.
The goods are usually left in their original packaging so they carry the original trade marks. In some legal systems, unless it is done with the consent of the trade mark owner, parallel trade infringes trade mark rights in the country into which the goods are imported. In particular, this is the law applying to goods brought into the European Economic Area (EEA)* from outside. The importer, as well as anyone else dealing with such goods (even unwittingly), can then be sued for trade mark infringement.
Q2 Isn't this just manufacturers trying to maintain an inflated price structure in the UK?
No. Manufacturers like Roche generally have no control over the public sector pricing structure of its products. In the UK, for instance, the prices are set by the NHS's Drug Tariff. This is a tariff outlining what will be paid to contractors selling products to the NHS. The Drug Tariff is produced monthly by the Pharmaceutical Directorate of the Pricing Prescription Authority (the PPA) for the Secretary of State and is supplied primarily to pharmacists, doctors' surgeries and nurse prescribers. It is a legally binding document.
Ultimately, unlawful parallel imports are usually sold at close to the NHS Drug Tariff price.
Economic studies have shown that parallel trade is a key factor undermining European pharmaceutical competitiveness. Moreover, parallel trade has no clear benefit for consumers, since gains accrue mainly to the traders rather than healthcare buyers or patients (Study of the London School of Economics, "The Economic Impact of Pharmaceutical Parallel Trade in European Union Member States", 2004).
Q3 Why should prices vary in different markets?
As a responsible and ethical company, Roche Diagnostics believes that products should be made available wherever possible to those who need them, while protecting the business' ability to raise money for future innovation for the benefit of the patients. Roche Diagnostics respects the need for products to be made affordable to, sometimes, very poor local populations. The result is that products are available in some markets at prices that would make products uneconomic to produce if they were charged everywhere. Restrictions on parallel trade are therefore a necessary part of ensuring that affordable medicines are available to even the world's poorest populations. The need for such restrictions on parallel trade for ethical reasons has been recognised by the World Trade Organisation.
Q4 How serious really is this?
Manufacturers may decide to take legal action against anyone found to be selling unlawful parallel imports, whether or not the products were bought in good faith. Legal action can result in a court order covering damages, destruction of the infringing stock (prohibiting further unlawful parallel imports), identification of customers and suppliers and payment of legal costs. A number of companies have already been successfully sued for selling unlawful parallel goods.
In some instances, and providing a trader can trace and identify the suppliers, the expenses of being caught with unlawful parallel imports can often be passed on up the supply chain. Many traders, however, buy from multiple sources and do not log their suppliers against the batch numbers they stock. In these cases they cannot trace the supplier of particular product batches and are unable to pass on the expense.
In addition, with the introduction of the government's new pharmacy contract, pharmacists are obliged to reach certain quality standards within their pharmacy. The sale of unlawful parallel imports may fall foul of these standards.
Q5 Why is Roche Diagnostics investing time to highlight this issue?
Roche Diagnostics believes that taking action against unlawful parallel imports is important as a matter of market fairness. Companies trading legitimately are entitled to expect their competition to be fair. Companies that knowingly deal in unlawful parallel imports are taking an unfair competitive advantage over companies that trade legitimately. Traders engaged in this unlawful conduct also take advantage of their trading partners, leaving them with a substantial legal liability. As industry leaders, we have a responsibility to highlight this issue and protect the pharmacist.
Unlawful parallel imports could also potentially waste a great deal of time and money, if for example, the MHRA decided to instigate a product recall, it would be difficult to track and recall an unlawful parallel import.
Roche Diagnostics is taking a joint platform with the renowned professional bodies such as The National Pharmaceutical Association and The Royal Pharmaceutical Society, to address the issue of unlawful parallel trade and protect the interests of the pharmacists involved.
Q6 Isn't parallel trade from within the EEA very common?
Parallel trade from within the EEA is legitimate (subject to well understood and easily met conditions), and it is reasonably widespread. However, legitimate parallel importers operating within the EEA, and the wholesalers and retailers who trade with them, face unfair competition from importers and sellers of unlawful parallel imports from outside the EEA.
Q7 What about parallel trade from within the EEA?
Roche Diagnostics does not oppose free trade within the EEA but is firmly opposed to the unscrupulous activity of a few who are selling unlawful product through the unlawful import of goods sold onto external (non EEA) markets.
Q8 How widespread is the problem of unlawful parallel trade?
It is difficult to put a figure on it. Feedback received from the market is that it is fairly widespread and that it affects the Diagnostics Industry as a whole in the UK, we don't have any specific data other than how it effects ourselves. A number of Shortliners and Wholesales have been involved either wittingly or unwittingly.
Q9 What other steps is Industry taking to address this problem?
As industry leaders, Roche Diagnostics has made it a priority to address this problem and is sending out regular alerts to wholesalers to keep them informed about the issue. Roche Diagnostics has also introduced different European and non-European packaging to its Accu-Chek range. This will help wholesalers and pharmacists to clearly identify unlawfully imported products.
Accu-ChekŪ Active now has "only for sale in the EEA" on the packs
Accu-ChekŪ Advantage Plus is only available in the UK and not other EEA countries.
All our UK packs also have specific UK patient information leaflets as per MHRA guidelines.
Q10 How can pharmacists prevent unlawful stock from entering the supply chain?
Pharmacists should be vigilant and should check that products purchased are of EEA origin. They should ensure that their stock systems can trace their suppliers. They should refuse to take delivery of unlawfully imported stock. If pharmacists are unsure of the origin of any Accu-Chek stock, Roche Diagnostics will be pleased to provide assistance. They can call our helpline on 0161 606 0280.
About Roche and the Roche Diagnostics Division
Headquartered in Basel, Switzerland, Roche is one of the world's leading research-focused healthcare groups in the fields of pharmaceuticals and diagnostics. As a supplier of innovative products and services for the early detection, prevention, diagnosis and treatment of diseases, the Group contributes on a broad range of fronts to improving people's health and quality of life. Roche is a world leader in diagnostics, the leading supplier of drugs for cancer and transplantation and a market leader in virology. In 2006 sales by the Pharmaceuticals Division totalled 33.3 billion Swiss francs, and the Diagnostics Division posted sales of 8.7 billion Swiss francs. Roche employs roughly 75,000 people in 150 countries and has R&D agreements and strategic alliances with numerous partners, including majority ownership interests in Genentech and Chugai Roche's Diagnostics Division offers a uniquely broad product portfolio and supplies a wide array of innovative testing products and services to researchers, physicians, patients, hospitals and laboratories world-wide.
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