Is parallel trade in medicines compatible with the single European market?

For many years the varying methods of price control of medicines by national governments in the European Community (and elsewhere) have resulted in wide variations in prices. Parallel traders buy products in low pricing Community countries and sell them, generally relabelled or repackaged, in high pricing Community countries. This practice diverts sales revenue and profits from the manufacturers to the traders, distributors, pharmacists and, in some measure, to the sickness funds and to some patients. While parallel trade appeals to those who gain financially, its basis is a market distortion that poses a significant threat to the future of the research-based pharmaceutical industry.