Court Tells EU to Review Glaxo Dual-Pricing Case

(CN) - Europe's top court told EU lawmakers to take a closer look at whether GlaxoSmithKline's wholesale pricing policy is anticompetitive. The decision is being hailed as a victory for drug companies and a blow for European countries that benefit from bulk medication sales to supply state-run health care systems.

The case centers on different pricing that United Kingdom-based pharmaceutical giant GlaxoSmithKline established in 1998 for products in Spain depending on whether they are used nationally or resold. The company opposed discount drug trading, which exploits a price differential for medical products among countries.

The Court of First Instance first examined the issue after the European Commission determined that the practice violated competition law. The court agreed that the practice was anticompetitive, but annulled the commission's decision, saying that it hadn't adequately considered the possible advantage of innovation in the industry.

The parties appealed to the Court of Justice, which held that although the lower court erred in defining consumer disadvantage as a prerequisite for anticompetitiveness, its decision was otherwise well-founded.

It dismissed the appeal, which places the issue back into the commission's hands.

The Court of Justice also dismissed a portion of the appeal asking for a special exemption to European law, saying that an exemption must demonstrate technical or economic progress, the burden of proof for which lies with the requesting company.

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