Competition Bureau Responds to Complaints Regarding Supply of Canadian-Based Internet Pharmacies
OTTAWA, March 21, 2003 B

The Competition Bureau announced today that it is not proceeding against GlaxoSmithKline (GSK) for blocking Canadian-based Internet pharmacies from exporting its products to the United States.
The Competition Bureau has examined this matter with respect to both the criminal and civil provisions of the Competition Act pertaining to refusal to supply, market restrictions and price maintenance.
The US Food and Drug Administration has informed the Competition Bureau that these exports contravene US law. The civil provisions of Canadian competition law pertaining to refusal to supply and market restrictions generally recognize that suppliers may set the terms and conditions of sales to businesses provided that they have reasonable business justification. From the Bureau's perspective, the fact that these cross-border sales violate US law supports the position that GSK has a reasonable business justification for blocking the exports, while continuing to supply the Canadian market.

As to the criminal provisions, the Bureau has found no evidence to suggest that the Competition Act has been violated.

In this situation, there is no appreciable impact on Canadian consumers resulting from GSK's actions. As the Bureau has limited resources it must consider a host of factors when determining which cases to pursue. Given the above facts, the Bureau has determined that this matter warrants no further attention on its part. Private parties involved in disputes over issues of supply, however, can pursue private legal action and, in this case, some complainants have already announced their intention to do so.
The Competition Bureau is an independent law enforcement agency which ensures that all Canadians enjoy the benefits of a fair and competitive economy, low prices, product choice and quality service. It oversees the application of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act.

For media enquiries, please contact:
André Leclair
Senior Communications Advisor
Competition Bureau
(819) 953-4257 or (613) 290-1583 (cell.)

For general enquiries, please contact:
Competition Bureau's Information Center
(819) 997-4282 or toll-free 1-800-348-5358

Email your questions and comments to rpittman@hqe.ihs.gov.
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