The Turkish Competition Board (“Board”) has established a critical precedent concerning biological products with its decision dated 12.11.2014 and numbered 14-45/809-364 (“Decision”). The Board has granted an individual exemption in accordance with Article 5 of the Law No. 4054 on the Protection of Competition to an exclusive tender wholesaler agreement between Abdi İbrahim İlaç Pazarlama A.Ş. (i.e. supplier) and a wholesaler. The product concerned, Botox, has a competing product, Dysport which has the same active substance, i.e. Botulinum Toxcine. However, these two products are assessed under the original product category under the Ministry of Health (“MoH”) regulations, simply because they are biological products, and unlike chemical products they are not accepted as generic equivalents. Although the Board might have made a formalistic assessment as inter alia in the recent Chiesi 2013 decision1 by seeking for an existence of generic equivalent to be eligible for an individual exemption in the strict sense, it has rather assessed the case on its merits by appreciating the fact that Botox by its very nature will never have generic rivals in the market as in the case of chemical products. For this very reason, the Board’s approach may be seen prominent.
The Board defines the relevant product market based on active substance, i.e. Botulinum Toxcine and sets forth that Dysport’s not being the generic equivalent of Botox does not change the fact that Botox and Dysport can compete with each other in tenders. The Board also referred to the relevant MoH regulations in reaching its conclusion which reveals the fact that although biosimilars have the same active substance with biological product, they should be assessed as original products due to the differences in their production processes. Also Article 2.1 of the MoH’s Guidance on Biosimilar Medical Products states that “standard generic approach (proof of bioequivalence with reference medical product through using proper bioavailability studies) is normally applied to chemicals based drugs. Depending on the complexity of biological/biotechnological products, generic approach in biosimilar products is not considerably convenient.” Interestingly, the Board already noted under its Pharmaceutical Sector Inquiry Report in 2013 that traditional relation between original and generic products is not applicable to biotechnological products. That is to say that the Board has already realized that current approach applied for chemical based products / chemical compositions does not fit to that for biological products.
In this framework, the Board deduced in its decision that although Botox and Dysport are assessed under the original product category, these can be deemed as competing products in respect of tenders initiated on the basis of active substance. Apparently, the Board has brought a brand new perspective for biological products for the first time without requiring an existence of generic equivalents in the product portfolio to be eligible for individual exemption for exclusive dealings in tender channel.