On 14 May 2013, the French Autorité de la concurrence (“Autorité”) fined Sanofi-Aventis (“Sanofi”) EUR 40.6 million (approximately USD 52 million) for abusing its dominant position in the market for clopidogrel prescribed by ambulatory care (i.e., clopidogrel distributed in pharmacies). Clopidogrel is used to prevent the recurrence of serious cardiovascular diseases and in particular complications arising from atherothrombosis. The Autorité found that Sanofi had implemented a global and structured communication strategy aimed at misleading doctors and pharmacists and thereby delaying the generic substitution process which ordinarily takes place when a patent expires.
Whilst not revolutionary in France where denigration has already been found to restrict competition, the Autorité’s decision is a clear illustration of European competition authorities’ increasing skepticism concerning originator companies’ attempts to prevent or delay generic entry. Moreover, it is in line with the European Commission’s findings in its 2009 Pharmaceutical Sector Inquiry Report, as well as the European Commission on-going investigation against pharmaceutical companies targeting so-called “pay-for-delay” agreements with generic companies, especially in the form of patent settlements (see for instance the on-going investigation into Lundbeck, Servier, Johnson & Johnson, Novartis as well as generic companies).
Sanofi’s Blockbuster Plavix Drug
Sanofi’s clopidogrel, Plavix, is a “blockbuster” in the pharmaceutical industry and is the fourth most sold medicine in the world. In 2008 alone, it was the largest source of reimbursement from the French public healthcare system with EUR 625 million.
In July 2008, Sanofi’s Plavix patent expired. Two complementary patents, however, remained valid until 2013 and 2017 - namely on a chemical salt of the active ingredient and Plavix’s indication for acute coronary syndrome (“ACS”) in dual therapy.
In October 2009, Sanofi and 11 generic competitors launched generic versions of Plavix. In order to respect Sanofi’s complementary patents, these generic competitors had to rely on a different chemical salt of the active ingredient and were unable to indicate their clopidogrel for ACS in double therapy.
Sanofi’s Dominant Position in the Market for Clopidogrel
The Autorité found that Sanofi held a dominant position on the French market for clopidogrel prescribed by ambulatory care and rejected Sanofi’s argument that the successful entry of generic companies had resulted in a loss of its dominant position. The Autorité relied heavily on the fact that Sanofi had managed to retain a significant share of the market (approximately 60%) whilst its largest competitors enjoyed less than 12% market shares. It also acknowledged that Sanofi benefited from a very prestigious image, especially in the treatment of cardiovascular diseases, as well as a large team of sales representatives.
The Autorité’s Abuse of Denigration
Whilst the Autorité acknowledged that a dominant company denigrating competitors would not necessarily infringe Article 102 of the Treaty on the Functioning of the European Union (“TFEU”) and its national equivalent, the test it lays down in its decision can easily be met. According to the Autorité, an abuse of dominant position would exist whenever a link can be established between an undertaking’s dominant position and its denigrating behavior. Establishing such a link would entail examining:
- The extent to which a dominant undertaking’s communications were based on objective findings or were merely unverified assertions;
- The effects the communications had on commercial partners as well as competitors’ customers; and
- Whether a link existed between the undertaking’s dominant position and its misleading communication strategy, including the notoriety of the company and the degree of trust other markets participants had in it.
Sanofi’s Abusive Denigrating Communication Strategy
According to the Autorité, Sanofi implemented from September 2009 to January 2010 a structured communication strategy aimed at dissuading doctors and pharmacists from prescribing and delivering third party generic versions of Plavix. Sanofi’s strategy took place at two important stages of the supply chain:
- It intervened at the prescription stage by convincing doctors to specify on their Plavix prescriptions that the indication was “non substituable”. Sanofi was thereby able to prevent pharmacists from substituting Plavix with generic versions of Plavix.
- It also intervened at the point of delivery by convincing pharmacists to only substitute Plavix with its own generic version of Plavix, Clopidogrel Winthrop.
The Autorité considered that the information provided by Sanofi to medical professionals stressing the differences that existed between its own clopidogrel products and third party generic versions of Plavix was manifestly incorrect and that it discredited third party generic products’ safety without justification. This information led medical professionals to be reluctant to prescribe or distribute third party generic versions of Plavix and explained the under-prescription of such generics. Whilst the French Health Ministry had anticipated that generic companies would gain a market share of 75% by the end of 2010, in practice, they “only” attracted a share of 65%. Moreover, the Autorité found that Sanofi’s own generic version of Plavix, Clopidogrel Winthrop, had managed to obtain an impressive 34% market share (four times more than Sanofi’s market share in generics in France).
Based on these findings, the Autorité came to the conclusion that Sanofi had abused its dominant position in violation of both French and EU antitrust law and fined the company EUR 40.6 million (approx. USD 52 million).
It remains to be seen whether the Autorité’s approach to the abuse of denigration will be followed by other competition authorities, especially the European Commission. Sanofi has already stated that it is considering appealing the Autorité’s decision which may in time lead to a preliminary ruling by the Court of Justice of the European Union on whether denigration can infringe Article 102 of the TFEU and, if so, under which circumstances. In the meantime the message is clear: pharmaceutical companies should be particularly cautious in their communications with medical professionals, especially when discussing generic products.