On 26 March 2008, the Competition Prosecutor General had rejected a request for interim measures by Bofar, a wholesaler-exporter of pharmaceuticals, against ten pharmaceutical companies that refused to fully supply Bofar with its orders for pharmaceuticals (Belgian Competition Law Report Issue 2008/Q2). On 2 April 2009, the President of the Competition Council dismissed Bofar's appeal against this decision.
In order to keep pharmaceuticals affordable, the Belgian government determines the maximum resale price of pharmaceuticals. It also imposes an obligation on wholesaler-distributors within Belgium to comply with minimum stock requirements and to supply pharmacies. Although established in Belgium, Bofar does not sell any pharmaceuticals in Belgium and is therefore not subjected to these obligations. Bofar purchases products which are cheaper in Belgium, compared to other EU Member States, with the sole purpose of exporting them to countries where they are more expensive. In its appeal, Bofar alleged that the refusal by pharmaceutical companies to supply it with pharmaceuticals, constituted a prima facie abuse of dominance.
In his decision on Bofar's appeal, the President of the Competition Council recalled the principles set out in the Syfait II judgment of the European Court of Justice (ECJ), which had been rendered after the Competition Prosecutor General rejected Bofar's application for interim measures. In Syfait II, the ECJ stated that, despite the fact that State intervention in the form of price regulation is one of the factors liable to create opportunities for parallel trade, there are no grounds for treating restrictions to parallel trade in pharmaceuticals differently from other sectors. The ECJ considered that it was, however, permissible for a pharmaceutical company to counter in a reasonable and proportionate way the threat to its own commercial interests that would potentially be posed by the activities of a wholesaler that wishes to be supplied with significant quantities of products that are ultimately destined for parallel export. However, parallel exports may not be excluded in their entirety by such a refusal of pharmaceutical manufacturers to supply a wholesaler.
In his decision, the President of the Competition Council followed the ECJ's reasoning. He first pointed out that Bofar had admitted that, despite the pharmaceutical companies' refusal to supply it with certain pharmaceuticals, these products were still being exported. Accordingly, there was no total exclusion of parallel exports. The President also stated that parallel trade could lead to a shortage of pharmaceuticals on the exporting market (especially problematic since pharmaceutical companies are under an obligation to sufficiently supply the domestic market), despite Bofar's claim that such problems would not occur in the present case because it always provided estimates of its orders well in advance (6 to 12 months). Finally, the President considered that, for the reasons already given in relation to the alleged illegal refusal to supply, there was also an objective justification for the differential treatment between wholesaler-exporters and wholesaler-distributors and, hence, no illegal discrimination of Bofar as compared to wholesaler-distributors. Bofar's appeal was thus rejected as unfounded.