Harmonized internal market in the pharmaceutical industry in the EU : reality, rhetoric or a possibility?

Abstract

The aim of this thesis is to analyse whether a harmonized internal market in the pharmaceutical sector exists within the EU. The study focuses on the development over these past fifty years of the pharmaceutical sector, both regarding the regulatory as well as the marketing pathways. Furthermore the study describes the intervention of three main players in the pharmaceutical industry: Member States, Commission and European Courts and where and whether their involvement is achieving or hindering the objective of a harmonized internal market. The EU has always emphasized the creation of a single market for pharmaceutical medicines. The drug industry is closely linked to cultural and societal values concerning health; to the national regulatory agencies responsible for the evaluation of safety, quality, and efficacy of new drugs; to multinational and domestic companies competing in national and international markets; and to varied interest groups of professionals and consumers organized along national and multinational lines. A competitive European pharmaceutical industry has remained a priority on the Commission's agenda in light of the Lisbon strategy. The role of the European Commission is to ensure that market players (Member States, national health services and pharmaceutical companies) respect the Treaty rules on free competition and the free movement of goods and services within the internal market. Furthermore the Commission has to ensure that the sale of safe, affordable medicines is not delayed by unfair practices. The study does not focus uniquely on free movement of goods. Single market is about market access of both patented drugs and their generic version. The study thus links other issues like marketing authorization and manufacturing practice. 4 The introductory part of the thesis discusses the unique architecture of the Pharmaceutical Industry, harmonization and definition of the single market. The first chapter then considers the Commission's role in the pharmaceutical sector through the adoption of legislation. It discusses marketing authorization procedures and the regulatory agency, legislation with regards to manufacture and distribution of medicines, good manufacturing practices, advertising and labeling and other pharmaceutical policies adopted by the Commission. The chapter analyses whether the Commission's activities are achieving the objective of a harmonized internal market. Chapter two discusses the sovereignty of the Member States in determining pricing and reimbursement levels and how these decisions are affecting the objective of the single market. As the guardians of the Treaty, the European Courts have had an essential role to play in the pharmaceutical industry. Chapter three focuses on the way the Courts have passed judgments in this sector and the implications of these judgments upon the achievement or otherwise of the single market. In addition to the litigation based on the Treaty provisions on free movement, chapter three analyses the Commission's antitrust enforcement activity in the pharmaceutical sector especially in removing obstacles to parallel trade in pharmaceuticals within the Single Market. In 2005 the Commission adopted its first decision of abuse of dominance in the pharmaceutical sector in the AstraZeneca case. Besides analyzing the implications of this judgment, chapter four discusses the Commission's sector inquiry in the pharmaceutical industry. The conclusion of the study focuses on whether a single market exists or is still under development and whether there is the possibility of greater harmonization in this sector. This section also explores possible policy options of how greater uniformity between Member States can be achieved.