On 18 October 2016, the French Cour de Cassation (“Supreme Court”) rejected the attempt by Sanofi, a leading French drug manufacturer, to overturn a ruling of the Paris Court of Appeal which had upheld the decision of the French Competition Authority (“FCA”) to fine it 40.6 M€ for having abused its dominant position with respect to the market for clopidogrel, a blood-thinning molecule used to prevent complications arising from cardio-vascular incidents.
Until 15 July 2008, when its patent expired, Sanofi enjoyed a legal monopoly for the production and sale of Plavix, a medicine composed of clopidogrel as its main active ingredient. Upon expiration of its patent, this medicine, one of the largest selling drugs in the world, suddenly faced competition by several generic drugs sold at significantly lower prices.
In the context of this challenging competitive environment, the FCA found that medical sales representatives of Sanofi had disparaged the generic versions of Plavix, by sowing doubts in the mind of health professionals over the equivalence of the drugs. In France doctors have the option of forcing pharmacists not to sell the generic version of a medicine to a patient by specifying on their prescriptions that the original medicine is “not substitutable”. The FCA’s investigation showed a much larger number of occurrences of such non-substitutable prescriptions in the areas where Sanofi had focused its communication efforts.
Before the Cour de cassation, Sanofi argued that the practice could not have amounted to disparagement, since there were in fact objective differences between the different generics and its original medicine. However, the judges noted that the French Agency for the Safety of Health Products had determined that in spite of certain differences, the medicines were in fact “bioequivalent”. Therefore inducing doctors, who tend to be risk-averse, to believe that the differences could lead to higher risks of death constituted indeed a disparaging practice.
The Cour de cassation also dismissed Sanofi’s argument that the FCA wrongly calculated the duration of the practice. A turnover of one year was taken into account in order to calculate the penalty, whereas the practice had been carried out only for five months. Nevertheless, the French Supreme court judges approved the decision to take into account the one year duration, since the impact of the practice had outlasted the duration of its implementation.
This decision is another illustration of the actions taken by competition authorities to punish illegal actions by pharmaceutical companies, such as “pay for delay” contracts or disparagement practices, which hinder the penetration of cheaper generic drugs on the market.