A European Commission recommendation over a dispute between GlaxoSmithKline and Greek wholesalers spells bad news for manufacturers, according to a report by Datamonitor.

In a move that could threaten stock management and direct to pharmacy (DTP) distribution schemes, EC Advocate General Dmaso Ruiz-Jarabo has advised the European Court of Justice (ECJ) that GSK acted in an anti-competitive way when it shipped some drugs direct to hospitals and pharmacies in Greece. Although this is not a final verdict it could be influential, putting pressure on GSK to prove its policy was justified. A ruling is expected some time later this year.

The case dates back to 2000, when GSK sought greater supply chain control. Orders for three drugs were transported direct to health outlets: Imigran, Lamictal and Serevent. Wholesaler distribution started again in 2001, but the Greek Competition Authority referred the matter to the ECJ.

Wholesalers in countries where drug prices are low such as Greece - have long exported them to countries where prices are higher. Manufacturers say using such price differentials takes away profit from them, and have at various times sought to cut out distributors. The opposite view is that stopping parallel trade hinders the free movement of medicines inside the EU.

Datamonitor pharmaceutical strategy analyst Pam Narang says: "Aside from the lost revenues, manufacturers contend that parallel trade can lead to drug shortages in the export markets and increase the risk of counterfeit drug entry; a claim that now has some weight behind it following developments in the UK." She is referring to last years discovery of three batches of fake drugs in the UK - Lilly's Zyprexa, Sanofi-Aventis's Plavix and AstraZeneca's Casodex  which entered the country as part of legitimate consignments from France.

DTP schemes such as the ones introduced by GSK, Pfizer AstraZeneca and Sanofi-Aventis could all be under threat from an EC ruling, which may also affect another strand of an increasingly fractious debate: the issue of dual pricing.

GSK, Pfizer and Novartis have brought in, or intend to introduce, dual pricing in Spain, selling drugs intended for export at a premium compared to those for domestic use. While the manufacturers claim the scheme cannot be classed as true dual pricing because it is only one price - the export price - that they set, the European wholesaler association holds that these actions are anti-competitive, and awaits a decision from the ECJ, Narang says.

pharmafocus@wiley.co.uk