Lilly loses
appeal in U.K. drug case
Posted AtIndyStar.com
Eli Lilly and Co. has lost
a European court bid to stop a pharmacy from buying
medications in Turkey at cheaper prices and selling
them for more in the United States.
The trademarks in dispute are the Lilly name, as well
as brand names for the Cialis impotence treatment,
Evista for osteoporosis, and Humulin and Humalog for
diabetes.
The Court of Appeal in London
ruled Tuesday that 8PM Chemist Ltd., a pharmacy in
the United Kingdom, did not infringe on the Indianapolis
drug maker's trademark when it shipped the company's
products to the United States.
U.S. customers often order
medications through Canadian Web sites, according
to the judgment. Some of those companies place orders
for the drugs with a Turkish company that packs and
labels the treatments and air-freights them to 8PM
in the U.K.
8PM then sends them to the
U.S. without opening the packets. 8PM has about a
hundred employees and "one or two" are involved
in passing the drugs on, the ruling said.
"The essential function
of Lilly's European trademarks is in no way jeopardized
by 8PM's activities," three judges said in a
ruling.
Lilly argued that 8PM represented
to U.S. patients that the products had come from a
U.K. pharmacy rather than a Turkish one. Lilly said
that gave the products an aura of safety that was
not justified, as the patient would be more likely
to trust a British than a Turkish source.
"We believe the court's
action could compromise patient safety by allowing
diverted pharmaceutical products to flow outside of
the legitimate supply chain," Lilly said in a
statement.
The dispute is part of a
wider fight over the so-called parallel drug trade.
Pharmaceutical companies for decades have fought the
practice by which wholesalers buy drugs in lower-cost
countries such as Turkey and Greece and sell them
in more expensive markets such as the U.S. and the
U.K., pocketing the difference.
Drug makers lose more than
$5.9 billion in sales annually that way, according
to the European Federation of Pharmaceutical Industries
and Associations in Brussels.
"Under European Court
of Justice case law, trademark proprietors cannot
prevent goods bearing their marks from simply passing
through the European Union," 8PM's lawyer, Ralph
Cox, said in an e-mail. "The fact that the goods
are pharmaceuticals does not alter the position."
February 06, 2008 |
