Parallel distribution enables the distribution in the European Union of centrally authorised medicines by a business other than the marketing authorisation holder. Based on the core principle of the free movement of goods between EU member states, it allows an independent distributor to purchase medicinal products and resell them elsewhere in the EU.
In contrast to parallel imports, where nationally authorised products are imported into another member state, parallel distribution is subject to direct oversight by the EMA. Parallel imports remain under the supervision of the national authority in the country of import. For example, the MHRA manages the parallel importation of medicines into the UK.
The research-based industry body EFPIA identified parallel trade in the EU as a key trend in its 2017 report The Pharmaceutical Industry in Figures, highlighting its negative effect on the resources available for R&D:
“The fragmentation of the EU pharmaceutical market has resulted in a lucrative parallel trade. This benefits neither social security nor patients and deprives the industry of additional resources to fund R&D. Parallel trade was estimated to amount to € 5,361 million (value at ex-factory prices) in 2015.”
But the arguments in favour include savings for Government and private payers in importing countries, as well as some financial benefits in the country of export.
In any event, it is vital that appropriate controls are in place to ensure patients are properly informed and protected, and to inform the marketing authorisation holder as well as those along the supply chain. For centrally authorised medicines, these are administered by the EMA through its system of PD Notices, annual updates and notices of change. Detailed information and guidance on the system are available on the EMA’s website.
The EMA’s parallel distribution system is extensively used with around 2,500 notices issued each year. Since 2015, transparency has been offered by the Parallel Distribution Register. This provides a public database of parallel distribution notices providing useful information to both marketing authorisation holders and the supply chain about the status of particular products. The EMA has recently issued updated FAQs on the system. These provide useful information to distributors about what they need to do to obtain approval for their plans. New information includes guidance on the mandatory requirements for outer and inner labelling of parallel distributed products.
It is important to note that trade mark issues are to be considered separately from compliance with the above regulatory requirements. The EMA makes clear that it does not address trade mark questions and it is for the parallel distributor to assess the trade mark risks of distributing products. Trade mark issues regularly come before the courts as in the recent dispute between Flynn Pharma and DrugsRus over the anti-epileptic drug, phenytoin sodium.