December 5, 2008 / 5:02 PM / 11 years ago

UPDATE 2-EU exec drops drug repackaging ban plan-document

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By Huw Jones

BRUSSELS, Dec 5 (Reuters) - A planned reform of the European Union’s pharmaceuticals sector no longer contains a ban on the repackaging of prescription drugs for resale, a draft document obtained by Reuters on Friday showed.

So-called parallel traders, who buy and resell prescription drugs to exploit price differences among EU states, had faced a repackaging ban in an earlier version of the reform due for formal adoption next Wednesday.

EU Industry Commissioner Guenter Verheugen faced heavy pressure from parallel traders who said such a ban would have wiped them out, as they have to repackage drugs so that explanatory leaflets to patients are in the right language.

“Instead, a new article ... has been added to allow manufacturing authorisation holders such as parallel traders to replace safety features under strict conditions,” the document said.

Verheugen’s initial plan for a repackaging ban had also faced opposition from fellow commissioners who feared it would have hampered the free movement of goods in the 27-country EU.

Parallel trade accounts for 4.5 billion euros ($5.7 billion), only a small part of the EU’s 130 billion euro prescription drugs market.

But the sector says its ability to undercut manufacturer prices saves national health systems 500 million to 1 billion euros a year. EU states and the European Parliament have the final say on the reform.

Verheugen’s original reforms also angered consumer and health professionals as the plan sought to ease a ban on advertising prescription drugs by allowing manufacturers to give details of their products on the Internet or in printed media.

Campaigners appear set for a disappointment, barring any last-minute changes.

There is currently a ban on naming prescription drugs in an advertisement. The reform to be adopted next week would allow products to be named in “information” that drug firms publish in a newspaper or on the Internet, the document showed.

Verheugen has, however, inserted a provision that websites carrying information on prescription drugs must not have web-TV so they comply with a continuation of the ban on television and radio advertising of prescription drugs in the EU.

Direct-to-consumer advertising of prescription drugs is permitted only in the United States and New Zealand and was heavily attacked by consumers in the wake of the 2004 withdrawal of Merck & Co’s (MRK.N) heavily promoted painkiller Vioxx.

Drug firms such as Roche have said direct advertising undermines the sector’s reputation in the eyes of patients but Europe was too restrictive.

The Association Internationale de la Mutualite, Health Action International and Medicines in Europe Forum said allowing drug firms to “inform” the public about their products directly would delay competition from cheaper generic drugs.

“European patients need relevant, independent, comparative, unbiased and non-promotional information about health, treatments and medicines, not an exercise in building brand loyalty,” they told the EU executive in a letter. (Editing by Dale Hudson and David Cowell)

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