In a decision dated 21 March 2017, the Hungarian Competition Authority (“HCA”) terminated its competition proceedings for suspected abuses vis-a-vis the dominant position of Sanofi Aventis Zrt. in the Hungarian market.
HCA began examining Sanofis’s activity in July 2014 after Sanofi rejected distribution agreements with several pharmaceutical wholesalers. These wholesalers referred to Section 16 (5) of the Act XCV of 2005 on Medicinal Product for Human Use and on the Amendment of Other Regulations Related to Medicinal Products (“Medicines Act”) that provides that in case of patient care requirement the holder of marketing authorisation (“MAH”) shall ensure the procurement of the concerned medicinal products (i.e. the act stipulates a mandatory contracting obligation for the MAH).
In its decision, HCA evaluated thoroughly the pharmaceutical wholesaler market and Sanofi’s position in it. HCA stated that Sanofi’s portfolio consists mainly of products that are substitutable due to the expiry of patent rights. Therefore, Sanofi’s dominant position could not be established clearly.
HCA also examined Sanofi’s contracting rules in relation to new wholesaler applicants and established that Sanofi has two separate codes of conduct: one relating to “ordinary” wholesalers and one relating to wholesalers who require procurement from Sanofi by reference to Section 16 (5) of Medicines Act. In terms of the latter, Sanofi requires the applicant to enclose documents verifying the conditions of procurement as prescribed by the law, and afterwards (if the conditions are met) directs the applicant to one of its partner wholesalers. As a result, new applicants were only able to procure the products indirectly from Sanofi’s contracted distributors, and not directly from the MAH.
In the end, HCA stated that it seems that Sanofi may turn to a so-called ‘reduced wholesaler arrangement’ (i.e. contracting with only a few wholesalers) in its distribution practice, but it emphasized that there was no evidence that consumers have been adversely affected. Hence, it was not possible to ascertain all the relevant facts in the case, HCA terminated the proceeding.
A decision from HCA could have served as an indicator in the frame of the interpretation of Section 16 (5) of Medicines Act. However, due to the absence of a decision on the merits, this section remains ambiguous.