UPDATE 2-EU must review Glaxo request to up Spain prices-court

* EU must check if Glaxo exempt from competition rules-court

* Commission says will study ruling carefully

* Glaxo up 1.4 pct, says verdict vindicates its position

(Adds Commission, Glaxo, EAEPC comments; updates share price)

By Michele Sinner

LUXEMBOURG, Oct 6 (Reuters) - EU antitrust regulators must review their veto of GlaxoSmithKline's (GSK.L) request to raise its drug prices in Spain to stop wholesalers from taking advantage of low prices there, Europe's top court said on Tuesday.

The EU's executive Commission in 2001 turned down the pharmaceutical company's request to set higher prices in Spain in an attempt to stop parallel trade, in which wholesalers buy drugs in low-priced markets and resell them in countries where prices are higher.

The Commission said that a dual pricing system restricted price competition.

The European Court of Justice on Tuesday upheld the 2006 verdict by the lower Court of First Instance that the Commission had failed to consider Glaxo's evidence properly.

"The Commission must reconsider whether GlaxoSmithKline's general sales conditions in Spain may be exempted from the Community competition rules," the court said in a statement.

Antitrust lawyers said the verdict was good news for drugmakers but it was too early to say what the impact would be.

"It remains to be seen to what extent the decision means that pharma companies will be able to use dual pricing," said lawyer David Hull at Covington & Burling.

"This depends on what the Commission will conclude after performing the more detailed analysis of the evidence required by the EU courts."

The Commission said it would study the court's ruling carefully, while Glaxo gave it a cautious welcome.

"This vindicates GSK's position," a Glaxo spokeswoman said.

Glaxo shares were up 1.44 percent by 1518 GMT, compared with a 1.35 percent rise in the DJ Stoxx healthcare index .SXDP.

Parallel trade accounts for 4.5 billion euros ($6.6 billion), a fraction of the EU's 130 billion euro prescription drugs market. Supporters say these lower prices save national health systems 500 million to 1 billion euros annually.

EAEPC, a parallel trader lobby group, expressed disappointment with the verdict.

"We trust that the European Commission will have the courage of its convictions and declare that GSK's system cannot benefit from an exemption," Andreas Mohringer, EAEPC president, said in a statement. ($1=.6840 euro) (Additional reporting by Foo Yun Chee, Bate Felix and Ben Hirschler in London; editing by Dale Hudson and Karen Foster)