Issue link: https://maltatoday.uberflip.com/i/1539534
AN originator medicinal product is the first of its kind to be developed and au- thorised for its use after extensive pre- clinical research and large-scale clinical trials that demonstrate safety, efficacy, and quality. This originator drug is protected by intellectual property (IP) rights, which prevent competitors from copying it for a specified period. This original drug is marketed under a proprietary brand name chosen by the manufac- turer. When these exclusivity rights expire, any manufacturer may copy it to manufacture a generic. This generic can be marketed under its Internation- al Non-proprietary Name (INN) or, in some cases, the generic manufacturer may label it with a brand. The origina- tor drug always remains the reference product against which all its generics are tested for bioequivalence. Parallel importation is a legal sys- tem that allows medicines and health- care products to be brought into Malta from other EU countries. Because the EU guarantees the free movement of goods, wholesalers can purchase prod- ucts at a lower cost in one country and resell them in another, bypassing the official distributor. These medicines and healthcare products are genuine and non-counterfeit. The parallel trad- er does not require explicit permission from the manufacturer or the author- ised distributor in Malta to market and distribute these pharmaceutical, paral- lel-imported products to local pharma- cies. This opportunity arises from the doc- trine of regional exhaustion of IP rights. Once an IP owner puts one product in the EEA market, their IP rights are ex- hausted and hence, cannot use these rights to prevent the subsequent resale or movement of the product within the EEA. Parallel importation is an economic arbitrage opportunity brought about by the free movement of goods and solidar- ity within the EU's single market. Many view this mechanism to balance the IP rights with the human right to health. Parallel importation has the primary ob- jective of creating downward price pres- sure, making essential originator med- icines more affordable for the private sector and providing substantial savings for public health systems. Furthermore, parallel importation may introduce new dosage forms and alternative packaging, hence broadening the options for pa- tients and prescribers. Additionally, this mechanism can enhance supply chain resilience by mitigating shortages in one member state by importing surplus from another member state. Different philosophical traditions jus- tify or critique pharmaceutical parallel trading. Cheaper essential medicines improve affordability, and from a con- sequentialist perspective, parallel trad- ing is warranted because it maximizes overall patients' well-being. From a deontological perspective, better med- ical affordability aligns with the duties of justice and the protection of rights. From a care ethics perspective, paral- lel importation embodies attentiveness and responsiveness to patients' vulnera- bility by prioritising the affordability of medicines over excessive profiteering. However, pharmaceutical innovation companies argue that parallel trading reduces their profits, which may affect their research and development budg- ets and thus limit the development of future innovative drugs. Additionally, pharmaceutical companies contend that parallel trading undermines their pric- ing model, which relies on high prices in wealthy countries and lower prices in poorer countries. This parallel trading process is meticu- lously regulated by the Malta Medicines Authority (MMA), which has significant discretionary power over which prod- ucts are allowed to enter the Maltese market. A parallel import licence must be obtained from the MMA, which as- sesses the product's therapeutic equiv- alence to the version already author- ised in Malta. This process ensures that patients receive the same therapeutic benefit and that safety is never compro- mised. Furthermore, the authority also enforces rules on packaging, recalls and pharmacovigilance, ensuring that paral- lel imported medicines meet the same standards as those brought in Malta through official distributors. Other authorities interested in this process include the Malta Chamber of SMEs and the Malta Competition and Consumer Affairs Authority (MCCAA). Research from the University of Malta demonstrates a structural issue in the local pharmaceutical market. This re- search highlights that the prices of orig- inal drugs are among the highest in Eu- rope. Malta's small size creates a unique marketing dynamic dominated by a few direct importers, creating a 'virtual mo- nopoly'. The Malta Chamber of SMEs supports parallel trading, as this mech- anism challenges the concentrated mar- keting power of a few direct importers, ensuring more affordable options and genuine free movement of goods. The question that this organisation should now answer is: Does the local parallel importation business lead to a 'price war' or a 'profit war', benefiting only pharmacy owners? Another authority that supports par- allel importation is the Malta Compe- tition and Consumer Affairs Authority (MCCAA). While the MMA ensures product safety, the MCCAA's Enforce- ment Directorate is the primary guardi- an of consumer pricing. The MCCAA's mission is to promote and protect con- sumer rights, resulting in providing pa- tients with fair and affordable prices of medicines. It achieves this by monitor- ing the prices of pharmaceutical prod- ucts and benchmarking them against prices in other EU countries. This pro- cess can trigger a 'downward price re- alignment' where necessary. However, the same question comes up: Does the local parallel importation business lead to a 'price war' or a 'profit war', benefit- ing only pharmacy owners? The Maltese market, characterised by its compact size, profound reliance on imported goods, and a healthcare sys- tem where patients often pay for orig- inator medicines directly, presents a unique landscape for the parallel im- portation of pharmaceuticals, medi- cal devices, and food supplements. In Malta, these three trading processes are carried out by three companies but form one entity. Another large whole- saler also participates as a parallel im- porter. These entities possess several pharmacies, creating a single, vertically integrated mechanism that has the mar- keting power to set the rules of the local pharmaceutical market. This business model sees these Maltese pharmaceu- tical entities wearing several hats. They operate as pharmaceutical importers, wholesalers, parallel importers, and owners of a chain of pharmacies. This setup poses clear ethical risks, making it vital for both patients and regulators to remain vigilant. The Maltese patient has two signifi- cant features: Many purchase origina- tor drugs out-of-pocket; are brand loyal consumers when it comes to medicines. These two factors create a perfect niche for parallel importers who can supply the same trusted brand at a lower price than the direct importer. To compete, the direct importer must adopt prices and commercial models to counter the competitive pricing from parallel im- File photo Are patients benefitting from parallel importation of medicines? Anthony Raphael Gatt Pharmacist and holder of MAs in bioethics and business ethics 10 maltatoday | WEDNESDAY • 17 SEPTEMBER 2025 OPINION