Pharmaceutical regulatory law

Regulatory framework

What is the applicable regulatory framework for the authorisation, pricing and marketing of pharmaceutical products, including generic drugs?

European legislation requires that a medicinal product first obtains a marketing authorisation (MA) before it can be placed on the EU market. The key pieces of EU legislation governing the authorisation and marketing of pharmaceutical products are Directive 2001/83/EC on the Community code relating to medicinal products for human use, and Regulation 726/2004 laying down Community procedures for the authorisation and supervision of medicinal products and establishing a European Medicines Agency. This legislation does not, however, cover pricing aspects, which are left to national authorities for their respective jurisdictions.

MAs can be obtained through various procedures: mutual recognition procedure, decentralised procedure, centralised procedure, or national procedures. For some categories of medicinal products, such as biological products or drugs intended to treat serious diseases, the centralised procedure is mandatory. Within each type of procedure, there are also different routes MA applicants can choose, based on the type of product being applied for: a generic route for generic versions of previously authorised medicines, a 'full dossier' route for a new medicine, and a 'hybrid' route for medicines that are a mix of the above two categories. Abridged and accelerated procedures are also available, for example in the case of medicines that address an unmet medical need in the community. For example, the 'conditional marketing authorisation' procedure can be used to expedite the approval of safe and effective medicines in the interest of public health. This route was recently used for the authorisation of covid-19 vaccines.

The European Commission is currently reviewing the EU's general pharmaceutical legislation. On 26 April 2023, the Commission adopted a proposal for a new Pharmaceuticals Directive and a new Pharmaceuticals Regulation, which will revise and replace the existing general pharmaceutical legislation (Regulation 726/2004 and Directive 2001/83/EC) and the legislation on medicines for children and for rare diseases (Regulation 1901/2006 and Regulation 141/2000/EC, respectively). The proposals will now be considered (and may be amended) by the European Parliament and the Council. The European Commission has not provided an estimated time frame for adoption. 

Regulatory authorities

Which authorities are entrusted with enforcing these rules?

The main authorities responsible for the authorisation of medicinal products are the European Commission (Commission) and the European Medicines Agency (EMA) (at the EU level) and the national regulatory authorities (at the national level). National authorities are also responsible for the ongoing monitoring of the marketing of the medicinal product within their jurisdictions once it has been authorised.


Are drug prices subject to regulatory control?

Drug prices are generally subject to some level of regulatory control, but this is subject to the sole jurisdiction of individual member states. There is no harmonised regulation covering pricing of drugs in Europe.


Is the distribution of pharmaceutical products subject to a specific framework or legislation? Do the rules differ depending on the distribution channel?

The distribution of pharmaceutical products is largely governed by national legislation within each member state, although there is some overarching EU legislation (such as the rules relating to supply set out in Directive 2001/83/EC) aimed at ensuring that the medical needs of the patients in the EU are adequately met. In addition, the Commission and the European courts are tasked with general oversight of the market and ensuring that all laws and regulations promote access to healthcare and medicines and protect public health.

At a national level, a number of factors determine the applicable rules and distribution channels for a product. The category and type of product play a major role (eg, hospital only, pharmacy only, doctor-administered therapy, etc). There are also different rules governing the channels of supply themselves (eg, different member states take different approaches to dispensing of medicines online).

Intersection with competition law

Which aspects of the regulatory framework are most directly relevant to the application of competition law to the pharmaceutical sector?

The existence of strong regulatory constraints does not prevent the application of competition law in the pharmaceutical industry, which is no different than any other sector. However, as recalled by the Court of Justice of the EU (CJEU), due account must be taken of these regulatory constraints (Case C-307/18, Generics (UK) and others), which may therefore have an impact on the competition law analysis.

For example, the regulation of drug prices by health authorities does not prevent the intervention of competition authorities. On 10 February 2021, the Commission adopted its first decision on excessive pricing in the pharmaceutical sector, accepting commitments from Aspen Pharmacare to reduce its prices for six critical cancer drugs by, on average, approximately 73 per cent, and ensure a continued supply (Case AT.40394, Aspen).

In addition, even though a particular course of action may be permitted under the regulatory framework (for example, withdrawal of a registration, it does not mean that it cannot be an infringement under competition law (see, eg, Case C-457/10 P, AstraZeneca).

Competition legislation and regulation

Legislation and enforcement authorities

What are the main competition law provisions and which authorities are responsible for enforcing them?

The main EU competition law provisions are set out in the Treaty on the Functioning of the European Union (TFEU): article 101, which prohibits anticompetitive agreements and practices; and article 102, which prohibits the abuse of a dominant position. These provisions are enforced by the European Commission (the Commission) and National Competition Authorities across member states. Within the Commission, the Directorate-General for Competition (DG COMP) holds the primary responsibility for direct enforcement.

Regulation 139/2004 (EUMR) gives the Commission the jurisdiction to review mergers and acquisitions if they meet the applicable thresholds (or, in certain circumstances, are referred to the Commission by member states or parties to the transaction).

Public enforcement and remedies

What actions can competition authorities take to tackle anticompetitive conduct or agreements in the pharmaceutical sector and what remedies can they impose?

The actions the Commission can take in relation to infringements of article 101 and article 102 TFEU are set out in Regulation 1/2003:

  • Imposing fines up to 10 per cent of the company's worldwide turnover during the previous financial year.
  • Requiring infringing companies to put an end to their behaviour and imposing behavioural or structural remedies that are proportionate to the infringement and necessary to bring the infringement effectively to an end.
  • Ordering interim measures in cases of urgency where there is a risk of serious and irreparable damage to competition.
  • Accepting legally binding commitments by companies to deal with anticompetitive concerns.
  • Imposing daily penalties of up to 5 per cent of the average daily turnover in that year to ensure compliance with these measures.


Member state competition authorities generally have similar enforcement powers.

The Commission is currently evaluating whether to reform Regulation 1/2003 (see here).

The Commission's approach to remedies (commitments) in an antitrust investigation of a pharmaceutical case is illustrated by Case AT.40394 Aspen. In May 2017, the Commission commenced a formal investigation into Aspen's pricing practices for six critical off-patent cancer medicines. Aspen had acquired the medicines from another company and started to increase prices from 2012, often by several hundred per cent. Its prices exceeded relevant costs by almost 300 per cent on average. Aspen gave commitments to the Commission (made legally binding in February 2021), under which it agreed to reduce its prices by 73 per cent on average and to ensure continued supply of the medicines for a significant period. On this basis, the Commission closed its investigation without sanctioning Aspen.

Private enforcement and remedies

Can remedies be sought through private enforcement by a party that claims to have suffered harm from anticompetitive conduct or agreements implemented by pharmaceutical companies? What form would such remedies typically take and how can they be obtained?

Anyone who has suffered harm as a result of a breach of EU competition law is entitled to seek damages as provided for under the EU Damages Directive and preceding case law (cases C-453/99, Courage and C-295/04 to C-298/04, Manfredi).

These private enforcement actions must be brought before the national courts in member states and are primarily governed by the national law of those member states. The remedies available will thus depend on national law and procedure, and may include, for example, damages or injunctions. The national courts can refer legal questions to the European Court of Justice.

There are two avenues for a private party to bring a damages action for an infringement of EU Competition Law before a national court. It could do so without relying on a prior Commission decision (referred to as a 'standalone' action). Alternatively, it could do so in reliance on a previous infringement decision by a competent competition authority at the EU or member state level (referred to as a 'follow-on' action).

Sector inquiries

Can the antitrust authority conduct sector-wide inquiries? If so, have such inquiries ever been conducted into the pharmaceutical sector and, if so, what was the main outcome?

Article 17 of Regulation 1/2003 gives the Commission the power to conduct general inquiries into any sector.

In 2008, the Commission carried out an inquiry in the pharmaceutical sector, based on the view that competition in the sector was failing to function optimally in terms of pricing and innovation. The Commission published its final report in July 2009. Its findings included that generic medicines were taking too long to reach the market; few innovative medicines were reaching the market; and there was a need to implement an EU patent and patent-litigation system. The report has been highly influential on its subsequent enforcement activities.

The Commission issued another report in January 2019 setting out the enforcement action taken in relation to antitrust in the pharmaceutical sector between 2009 and 2017. This highlighted the need for competition authorities to continue their commitment to enforce competition law in the sector. Following the report, the Commission adopted a 'Pharmaceutical strategy for Europe' in November 2020. This is primarily focused on:

  • ensuring accessibility and affordability of medicines;
  • supporting innovation and competition in the European pharmaceutical sector;
  • improving crisis preparedness and response mechanisms; and
  • continuing international dialogue to promote a high level of quality, efficacy and safety standards.
Health authority involvement

To what extent do health authorities or regulatory bodies play a role in the application of competition law to the pharmaceutical sector? How do these authorities interact with the relevant competition authority?

Health authorities and regulatory bodies do not enforce competition law, which is the exclusive jurisdiction of the competition authorities and courts at the EU level and in member states.

Nevertheless, competition authorities may consult health authorities or regulators in the course of their investigations (and, if necessary, can require them to provide information) to get a better picture of the potential anticompetitive effects of an agreement or practice. Likewise, competition authorities may consult them in the context of sector inquiries.

NGO involvement

To what extent do non-government groups play a role in the application of competition law to the pharmaceutical sector?

Although not directly involved in the application of competition law, NGOs, trade associations and consumer groups may have a role to play in the context of the Commission's competition law investigations or market inquiries. For example, they may highlight instances where markets are not working well or make a complaint about anticompetitive agreements or conduct.

They may also intervene in a case before the European courts if they can pass the procedural hurdle of establishing sufficient interest in the case.

Review of mergers

Thresholds and triggers

What are the relevant thresholds for the review of mergers in the pharmaceutical sector?

The standard EU merger control regime, as set out in the EU Merger Regulation (EUMR) and related legislation and guidance, applies to all markets, with no special rules or thresholds for the pharmaceutical sector.

A transaction is subject to the EUMR and therefore notifiable to the EU Commission where it: (1) constitutes a 'concentration'; and (2) has an 'EU dimension'. If a transaction does not constitute a concentration or does not have an EU dimension, parties will need to consider whether it falls within the scope of member states' national merger control rules.

A concentration requires a 'change of control on a lasting basis'. Control for these purposes is defined as the ability to exercise 'decisive influence' over an undertaking on the basis of rights, contracts or other means. This can include 'joint control’ where two or more parties exercise decisive influence over an undertaking (additional rules apply to joint ventures, notably that they are formed on a lasting basis and are 'full function').

There are two alternative tests to establish whether a concentration has an EU dimension.

  • The combined worldwide group turnover of all undertakings concerned exceeds €5,000 million, and the EU-wide group turnover of each of at least two of the undertakings concerned exceeds €250 million, unless each undertaking concerned achieves more than two-thirds of its EU-wide turnover in one and the same member state.
  • The combined worldwide group turnover of all undertakings concerned exceeds €2,500 million, in each of at least three member states, the combined group turnover of all undertakings concerned exceeds €100 million, and in each of at least three of those member states the group turnover of each of at least two of the undertakings concerned exceeds €25 million, unless each undertaking concerned achieves more than two-thirds of its EU-wide turnover in one and the same member state.


There are also two referral mechanisms by which the European Commission can review mergers even if the above thresholds are not met.

  • First, under article 4(5) EUMR, if a concentration is notifiable in at least three member states the parties may request the Commission to review the concentration.
  • Second, under article 22 EUMR, a member state may request the Commission to review a concentration even if it does not have jurisdiction to review the merger itself. In March 2021, the Commission issued new guidance on how and when it will accept such referrals, including that the pharmaceutical sector is a good candidate for such referrals. In April 2021, the Commission accepted referral requests relating to Illumina's acquisition of GRAIL. Following its review of the transaction the Commission blocked the merger on 6 September 2022 (M.10188). Illumina has appealed the prohibition decision to the EU General Court (Case T-709/22). In July 2022, the EU General Court (T-227/21) upheld the Commission's competence to review a concentration under article 22 even where the referral request is made by a member state in which the concentration does not fall within the scope of its national merger control legislation). Illumina has appealed this judgment to the CJEU (Case C-625/22). The Commission is currently investigating Illumina and Grail for implementing the transaction prior to clearance, a 'gun-jumping' infringement, and has adopted interim measures to prevent harm to competition following Illumina's early implementation (M.10483).


Furthermore, on 16 March 2023, the CJEU held in Towercast (C-449/21) that a transaction that is not notifiable under the EUMR (ie, a concentration with no EU dimension) or under national merger control rules, and that is not subject to a referral to the Commission under article 22 of the EUMR, may still be reviewed by a national competition authority under article 102 of the TFEU, provided that the acquirer, which holds a dominant position on a given market, substantially impeded competition on that market through the acquisition under review. While not a pharmaceutical sector case, it provides a basis for national competition authorities to review transactions by a dominant company (as originator pharma companies may be at points in the product life cycle) of companies or assets with little or no revenue (as may be the case for products not yet on the market), as an alternative to seeking review by the Commission under article 22). Indeed, in her opinion, Advocate General Kokott stated:


supplementary application of Article 102 TFEU, similar to that of Article 22 of the Merger Regulation, is likely to contribute to the effective protection of competition in the internal market, in so far as concentrations which are problematic under competition law do not meet the thresholds under merger control law and are therefore not subject, in principle, to ex ante control. This is because, as the Italian Government and the Commission point out, a gap in protection has emerged in recent years in the coverage and control, under competition law, of acquisitions of innovative start-ups, for example in the fields of internet services, pharmaceuticals or medical technology (‘killer acquisitions’). This concerns situations in which established and powerful undertakings acquire emerging undertakings which do not yet have a large turnover and which operate in the same, neighbouring, upstream or downstream markets, at an early stage of their development in order to eliminate them as competitors and consolidate their own market position. In order to ensure effective protection of competition in that respect also, it should therefore be possible for a national competition authority to resort at least to the ‘weaker’ instrument of punitive ex post control under Article 102 TFEU, provided that the conditions for it are met.


Merging parties and their advisers should also be aware of the Commission's package to further simplify its procedures for reviewing concentrations under the EUMR, announced in April 2023. This includes: (1) a revised Merger Implementing Regulation, (2) a Notice on Simplified Procedure, and (3) a Communication on the transmission of documents. The main changes to the previous rules expand and/or clarify which cases can be treated under the simplified procedure; streamline the review of simplified cases and of non-simplified cases, including new notification forms; and optimise the transmission of documents to the Commission.

Is the acquisition of one or more patents or licences subject to merger notification? If so, when would that be the case?

An acquisition of control over assets (including patents or licences) may be a concentration and therefore potentially notifiable under the EUMR only if they constitute the whole or part of an undertaking, namely, a business with a market presence to which turnover can be clearly attributed either presently or in the foreseeable future (see Commission's Consolidated Jurisdictional Notice paragraph 24 and Case M.7872 Novartis/GSK ofatumumab autoimmune indications).

Market definition

How are the product and geographic markets typically defined in the pharmaceutical sector?

Product market

In defining the relevant product and geographic market the Commission needs to consider which products are substitutable and hence which products exert competitive constraint. The Commission follows the guidance included in its Market Definition Notice (the revision of which is expected to be adopted in the third quarter of 2023 (see here, including the proposed draft revised Notice)). The Commission will take many factors into account including the product's characteristics, intended use and economic substitutability.

For pharmaceutical products, the Commission typically takes into account EPMRA's ATC3 level classification as its starting point, on the basis that all products in the same ATC3 class generally have the same therapeutic indication and cannot be substituted by products from other ATC3 classes. However, the Commission will consider the characteristics of the products in question and may depart from the ATC3 level, including in particular looking at the narrower ATC4, or by molecule (the latter in particular for cases involving generics). For OTC products, the Commission follows a similar approach, and may use IQVIA's CHC classification (including also natural remedies as appropriate) (M.9274, Glaxosmithkline/Pfizer Consumer Healthcare Business).

The Commission tends to segment the market between prescription and OTC products; however, in some cases has considered competition between them (M.9274 Glaxosmithkline/Pfizer Consumer Healthcare Business).

It may also consider segmentation between other factors relevant to the product in question, such as the line of treatment, mode of action, route of administration, etc (M.9294 BMS/Celgene).

For active pharmaceutical ingredients (APIs), the Commission’s general approach is that each API belongs to a separate product market. However, it will also consider substitutability between APIs, either in general or for certain applications (M.7746 Teva/Allergan Generics).

 Geographic market

The Commission has consistently considered that the markets for finished-dose pharmaceutical products are national in scope, in particular in view of the national regulatory and reimbursement schemes and the fact that competition between pharmaceutical firms still predominantly takes place at a national level. For pipeline products and APIs, the Commission has considered the geographic scope of the market to be at least EEA-wide (M.9461 AbbVie/Allergan, M.7746 Teva/Allergan Generics).

Sector-specific considerations

Are the sector-specific features of the pharmaceutical industry taken into account when mergers between two pharmaceutical companies are being reviewed?

The Commission is increasingly considering potential and innovation competition in pharmaceutical markets. It refers to its competitive assessment framework as having four-layers, corresponding to overlaps between the parties’ activities in terms of:

  • Actual (product and price) competition, assessing the overlaps between the parties' existing (marketed) products.
  • Potential (product and price) competition, assessing the overlaps between the parties’ existing (marketed) and pipeline products at advanced stages of development and between the parties’ pipeline products at advanced stages of development. For pharmaceutical products, the Commission in principle considers programmes in Phase II and III clinical trials as being at an advanced stage of development.
  • Innovation competition in relation to the parties’ ongoing pipeline products, assessing the risk of significant loss of innovation competition resulting from the discontinuation, delay or redirection of the overlapping pipelines (including early stage pipelines).
  • Innovation competition in relation to the capability to innovate in certain innovation spaces, assessing the risk of a significant loss of innovation competition resulting from a structural reduction of the overall level of innovation (M.9294 BMS/Celgene).
Addressing competition concerns

Can merging parties put forward arguments based on the strengthening of the local or regional research and development activities or efficiency-based arguments to address antitrust concerns?

Parties can put forward efficiency arguments (such as the strengthening of R&D), as a factor counteracting harmful effects on competition that might otherwise result from a merger.

To take efficiencies into account, the Commission must be able to conclude that the efficiencies benefit consumers, are merger-specific and are verifiable (see the Commission's Horizontal Merger Guidelines). In practice, this is a difficult burden of proof for the Commission to satisfy. The local or regional nature of R&D is unlikely to be a relevant factor taken into account. 

Horizontal mergers

Under which circumstances will a horizontal merger of companies currently active in the same product and geographical markets be considered problematic?

The Commission must assess whether or not a merger would significantly impede effective competition, in particular as a result of the creation or strengthening of a dominant position, in the common market or a substantial part of it (see the Commission's Horizontal Merger Guidelines and the recent EU General Court judgment in T-399/16 CK Telecoms UK Investments v Commission).

In relation to mergers in the pharmaceutical sectors, the Commission will look at overlaps between marketed products, pipeline products, and also between capabilities to innovate (M.9294 BMS/Celgene).

Many mergers in the pharmaceutical sector have led to a large number of horizontal affected markets, and the Commission's approach has been to apply a system of filters to identify the markets on which to focus its analysis. Group 1 are markets where the Parties' combined market share exceeds 35 per cent and the increment exceeds 1 per cent; Group 2 are where the Parties' combined market share exceeds 35 per cent but the increment is below 1 per cent; and Group 3 are where the parties' combined market share is between 20 per cent and 35 per cent. The Commission will assess whether there are competition concerns in each of these groups, but will focus its investigation primarily on the first group.

Product overlap

When is an overlap with respect to products that are being developed likely to be problematic? How is potential competition assessed?

For pharmaceutical products, the Commission in principle considers potential competition between pipeline and marketed products and between pipeline products. The Commission will look carefully at pipeline product overlaps, in particular products in Phase II and III clinical trials (which are seen as an advanced stage of development) but also products at earlier development stages. Overlaps between these and other pipeline products or marketed products may be a concern if the merger is likely to lead to the discontinuation or reorientation of R&D efforts thus preventing a potentially competing product entering the market.

In addition to pipeline products, the Commission will also look at innovation competition in relation to the capability to innovate in certain innovation spaces, assessing the risk of a significant loss of innovation competition resulting from a structural reduction of the overall level of innovation rather than in relation to specific product or pipeline product overlaps (M.9294 BMS/Celgene).

Examples of cases where the Commission has found competition concerns relating to pipeline products include Novartis/GlaxoSmithKline Oncology (M.7275), in which it was concerned that Novartis would post-transaction cease development of a pipeline cancer product; Pfizer/Hospira (M.7559) in which it raised concerns relating to Pfizer's incentives to continue development of its own biosimilar once it owned Hospira’s biosimilar; AbbVie/Allergan (M.9461) in which the Commission considered that AbbVie would post-transaction likely cease development of Allergan’s R&D for a competing product; and Takeda/Shire (M.8955) in which it found that Takeda would be unlikely to continue developing Shire's new anti-integrin treatment, which would compete closely with Takeda's biologic treatment for IBD.


Which remedies will typically be required to resolve any issues that have been identified?

The Commission's framework for remedies in mergers in the pharmaceutical sector is well established, and the Commission has cleared a number of cases conditional on remedies.

Generally, and in particular to secure Phase 1 clearance, the parties must commit to divest the acquirer or target's business in the market in which the Commission has competition concerns. The divestment may be structured as an asset carve-out or sale of a business, but would need to be a viable business and thus include the applicable marketing authorisations, contracts and brands, customer lists, key personnel, as well as transitional manufacturing and supply arrangements etc.

For example, in Mylan/Upjohn (M.9517), the Commission identified concerns in some markets due to the strong position of the merging parties and the limited number of significant competitors. The parties resolved these concerns by committing to divest Mylan's business in the relevant markets to a suitable purchaser.

An example of a remedy in relation to pipeline products is AbbVie/Allergan (M.9461). The Commission found that a product Allergan was developing was likely to compete closely with a product AbbVie was developing, and post-transaction AbbVie would potentially discontinue developing Allergan's product. The Commission was concerned that the merger would lead to a loss of innovation for the relevant treatments, as the products are a promising class of biologics for which only two other competing pipeline products existed. As a remedy, AbbVie committed to divest Allergan's pipeline product, including the development, manufacturing and marketing rights at a worldwide level, to a purchaser that would continue development of the product.

Anticompetitive agreements

Assessment framework

What is the general framework for assessing whether an agreement or concerted practice can be considered anticompetitive?

Restrictive agreements and practices are regulated under article 101 of the Treaty on the Functioning of the European Union (TFEU).

Article 101(1) TFEU prohibits agreements, decisions by associations of undertakings and concerted practices that may affect trade between member states and have as their object or effect the prevention, restriction or distortion of competition within the internal market. A number of examples are listed under article 101(1) TFEU (eg, price fixing, bid rigging, market sharing) but this list is not exhaustive.

Article 101(2) TFEU provides that any such agreements will be automatically void and unenforceable.

Article 101(3) provides for the possibility of an exemption if certain criteria are satisfied; essentially that the pro-competitive benefits of the arrangement outweigh their anticompetitive effects.

Technology licensing agreements

To what extent are technology licensing agreements considered anticompetitive?

The Commission has published specific guidelines on the application of article 101 TFEU to technology transfer agreements (2014/C 89/03). These note that most licensing agreements do not restrict competition and create pro-competitive efficiencies, as licensing leads to the dissemination of technology and promotes innovation by the licensor and licensees. To the extent that licence agreements do restrict competition, they also often give rise to pro-competitive efficiencies and may benefit from the exemption under article 101(3) TFEU.

There is also a Technology Transfer Block Exemption Regulation (TTBER) (Regulation 316/2014), which applies to patent and know-how licence agreements and provides a 'safe harbour' where certain conditions are met. In particular, these include that the combined market share of the parties must not exceed 20 per cent if the parties are competing undertakings (horizontal agreements) and 30 per cent if the parties are not competing undertakings (vertical agreements); and the agreement must not contain any 'hardcore' restrictions, such as a restriction on the licensee's ability to determine its prices or the limitation of output, the allocation of markets or customers, restrictions on the use of the licensee's own technology.

On 17 April 2023, the Commission launched a public consultation on the TTBER and the related guidelines. This is an early stage of the Commission's evaluation of whether revisions to these instruments are required, and the Commission has not to date published draft revised texts.

Co-promotion and co-marketing agreements

To what extent are co-promotion and co-marketing agreements considered anticompetitive?

Co-promotion and co-marketing agreements are commonly used in the pharmaceutical sector.

  • under a co-promotion agreement the same drug, under the same trademark, is promoted by two separate pharmaceutical companies; and
  • under a co-marketing agreement, the companies promote and sell the same drug under different trademarks.


On the whole, the Commission has not raised objections of principle to these types of agreements, which it generally considers to be pro-competitive. However, companies need to take care not to use co-promotion or co-marketing agreements in a way that results in anticompetitive conduct.

For example, in 2013, the Commission fined Johnson & Johnson (J&J) and Novartis €16 million in relation to a co-promotion agreement for J&J's drug fentanyl. Novartis' subsidiary Sandoz had been on the verge of entering the market in the Netherlands with a generic version of fentanyl after J&J's patents had expired; however, Sandoz and J&J entered into a co-promotion agreement under which Sandoz did not launch its generic and received monthly payments under the co-promotion agreement. These were calculated to exceed the profits it would have made from selling its own product. The Commission found an infringement of competition law on the basis that the co-promotion agreement was not about marketing, but was about delaying generic entry and sharing the monopoly profits from the artificially higher prices that resulted.

Other agreements

What other forms of agreement with a competitor are likely to be an issue? How can these issues be resolved?

A key focus for the Commission in the pharma sector has been on agreements that hinder or delay the entry of generic medicines and the resulting price competition. The Commission has paid particular attention to 'pay-for-delay' agreements, which may take different forms but are generally entered into between an originator and generic company to delay generic entry after expiry of the originator's core patents, in return for which the generic receives a value transfer from the originator (eg, a lump sum payment or benefit under a co-promotion agreement, etc). See, for example, Cases AT.39226 Lundbeck and AT.39612 Servier, and subsequent appeals.

While the Commission has focused on 'pay for delay' agreements, companies need to pay attention that any agreements with competitors, whether in the context of research and development, joint production, joint marketing etc do not infringe competition law – this could, for example, include cartel type infringements, such as price-fixing, market-sharing and bid-rigging. The exchange of competitively sensitive information between competitors can be an infringement of itself; but including confidentiality provisions in an agreement would not resolve competition concerns where the agreement otherwise restricts competition.

Nevertheless, cooperation between pharmaceutical companies is often pro-competitive. Recognising this, there are 'safe harbours' for certain R&D and specialisation agreements under block exemption regulations, and the Commission has published guidelines on horizontal cooperation agreements. The Commission is in the process of revising these as the current versions are due to expire at the end of June 2023.

Issues with vertical agreements

Which aspects of vertical agreements are most likely to raise antitrust concerns?

Vertical agreements (agreements between parties who operate at a different level of the supply chain), are generally considered less likely to raise competition law issues than horizontal agreements (agreements between competitors). In principle, this is due to the complementary nature of the activities carried out by the parties to a vertical agreement, and that vertical restraints may provide scope for efficiencies, for example by optimising manufacturing and distribution processes and services. Nevertheless, the Commission recognises that undertakings with market power may, in certain cases, use vertical restraints to pursue anticompetitive purposes that ultimately harm consumers; vertical restraints can notably lead to foreclosure, softening of competition or collusion.

Vertical agreements that meet the conditions of the EU Vertical Agreements Block Exemption Regulation (VBER, the new version of which entered into force on 1 June 2022), benefit from an automatic exemption under article 101(3) TFEU.

In its Guidelines on Vertical Restraints (published in June 2022) the Commission sets out its framework for its assessment of vertical agreements. This includes those falling within the scope of the VBER and also those falling outside it – such agreements do not necessarily infringe competition law.

Aspects of vertical agreements most likely to raise antitrust concerns are those referred to in the guidelines as 'hardcore restrictions' and an agreement containing such restrictions cannot benefit from the VBER. These include restrictions on the price at which the products are to be sold by the distributor (resale price maintenance (RPM) and restrictions on the customers to whom, or the territories into which, a distributor is permitted to sell the products).

Other restrictions that must be assessed carefully for competition law compliance include single branding clauses (under which a buyer is obliged or induced to concentrate its orders for a particular type of product with one supplier, eg, in non-compete and quantity forcing clauses), exclusive supply clauses, restrictions on the use of online marketplaces and the use of price comparison services, parity obligations, upfront access payments, category management agreements and tying.

An example of a competition law infringement in a vertical agreement in the pharmaceutical sector is GlaxoSmithKline (Joined cases C-501/06, C-213/06, C-515/06 and C-519/06). GSK had restricted its Spanish wholesalers from exporting its medicines to other member states, by agreeing with them that it would charge a higher price for sales for exports than for sales for the Spanish market. The Court of Justice of the EU held that an agreement aimed at limiting parallel trade shall be considered as restrictive of competition ‘by its object’. It also held that the Commission should have assessed a possible exemption under article 101(3), taking into account the arguments put forward by GSK in relation to the specific nature of competition in the pharmaceutical sector.

Patent dispute settlements

To what extent can the settlement of a patent dispute expose the parties concerned to liability for an antitrust violation?

Following its 2009 pharmaceutical sector inquiry report, the Commission monitored patent settlement agreements between originator and generic companies, in order to identify those settlements that delay generic market entry in breach of the competition rules. It published eight annual reports, the last being for 2016, and appears to be no longer actively monitoring such settlements.

Patent settlement can be a legitimate way of ending a dispute or litigation relating to a potential breach of patent rights, but they can also be used by originator companies to implement strategies to delay or prevent the entry or expansion of the more affordable generic version of a drug in exchange for benefits transferred from the originator (pay-for-delay agreements). The arrangement can benefit both the originator, which enjoys extended exclusivity resulting in extra profits, and the generic company, which can make significant earnings without entering the market, but to the detriment of healthcare systems and patients who end up paying higher prices than they would have done in the event of independent generic entry.

As such agreements involve coordination between actual or potential competitors, they may be in breach of article 101(1) TFEU. The Commission has adopted infringement decisions in several pay-for-delay cases. In November 2020, the Commission fined Teva and Cephalon a total of €60.5 million for concluding a pay-for-delay settlement agreement that delayed the market entry of a generic version of Modafinil (a drug used for sleep disorders). The distinguishing feature of this case is that the arrangement went beyond lump sum payments and involved a wide range of ‘side deals’ (eg, a distribution agreement, access to valuable clinical data for another drug). The decision sends a clear signal that pay-for-delay agreements will not be tolerated irrespective of the form of the payments at issue, and that the Commission will consider the cumulative effect of a range of commercial arrangements and deals.

The Commission has also fined companies in other pay-for-delay cases, in relation to the drugs Citalopram, Perindopril and Fentanyl. On appeal against some of these decisions, the EU courts' rulings have clarified the criteria and set out a framework for the assessment of pay-for-delay deals. The judgments confirm that, where the value transfer by the originator to the generic cannot otherwise be justified, the agreement at issue will be anticompetitive by its very nature (eg, 'by object'); and that commercial arrangements (eg, distribution deals) may also constitute a value transfer. The CJEU is set to deliver its judgment in the Servier pay-for-delay case later this year (2023). On 14 July 2022, AG Kokott advised the CJEU to overturn the General Court's findings and to rule that all settlement agreements concluded by Servier with the generics constituted restrictions of competition by object. The CJEU's judgment when handed down should provide further guidance on when such agreements may infringe competition law.

Joint communications and lobbying

To what extent can joint communications or lobbying actions be anticompetitive?

Unlike in the US, where joint lobbying is expressly excluded from the antitrust rules under the Noerr-Pennington doctrine (to the extent that such lobbying is not a mere sham to conceal an effort to interfere with legitimate competition), no such automatic safe harbour exists under EU competition law and it will be up to businesses to assess whether their conduct is competition compliant.

Particular risks in the context of trade associations or joint lobbying etc, are around the sharing of competitively sensitive information, or engaging in price fixing, customer or territorial allocation, bid rigging, collective boycotts and standard setting.

In EMC Development AB (Case T-432/05), the General Court recognised that normal lobbying activity carried out by a trade association that brings together companies in an industry in order to protect and promote the interests of its members is legitimate, but that joint lobbying may be anticompetitive where it influences a standard setting procedure to the extent of controlling it and undermining it. The Commission's horizontal guidelines also provide useful guidance on joint lobbying in the context of standard-setting.

Public communications

To what extent may public communications constitute an infringement?

Unilateral announcements by a company that are genuinely public, such as through a post on a publicly accessible website, statement in public or in a newspaper, generally do not constitute a concerted practice under article 101(1) TFEU.

However, there is a risk of competition law infringement if the announcement is in fact part of a concerted practice. The concern is that announcing future price increases may signal the intended market conduct of undertakings, and by reducing the level of uncertainty about their pricing behaviour, decrease their incentives to compete against each other. In its horizontal guidelines, the Commission clarifies that this may be the case where the market is concentrated and where there are high barriers to entry, and undertakings continuously publicise information without apparent benefit for consumers. (See Case AT.39850 Container Shipping.)

In the pharmaceutical sector, the CJEU has held that the coordinated public communication of misleading information by pharmaceutical companies to favour the use of one drug over another may infringe article 101(1) TFEU.

In Case C-179/16 Hoffmann-La Roche and Novartis, it concluded that coordination between Novartis and Roche to communicate that the off-label use of a product was less safe than the on-label use of another product, to shift demand towards the more expensive product, was market sharing and a restriction of competition by object.

The Commission is also currently investigating a communication campaign by Teva aimed at reducing the use of medicines competing with its blockbuster Copaxone. On 10 October 2022, the Commission announced that it had preliminarily found that Teva's campaign, addressed at healthcare bodies and professionals, would have created concern over the safety and efficacy of competing products, despite the fact that they were approved by the relevant authorities. The Commission considers that, if its preliminary views are confirmed, Teva's behaviour would infringe article 102 TFEU (Case AT.40588).

In addition, the Commission is currently investigating Vifor Pharma for an alleged abuse of dominance by carrying out a campaign of disparagement against its closest competitor in Europe in the market for intravenous iron treatment (Case AT.40577).

Exchange of information

Are anticompetitive exchanges of information more likely to occur in the pharmaceutical sector given the increased transparency imposed by measures such as disclosure of relationships with HCPs, clinical trials, etc?

Disclosure requirements imposed on pharmaceutical companies under the sector's regulatory regime typically provide for the protection of commercially sensitive information and are therefore unlikely to increase the risk of anticompetitive exchanges of information. For example, the clinical trials Regulation (EU Regulation 536/2014), which launched a harmonised clinical trials information system in all EU and EEA member states (as of 31 January 2022), provides for the protection of commercially sensitive information. The EFPIA disclosure code, which requires member companies to disclose the transfers of value made to healthcare professionals and healthcare organisations, allows for disclosure of information on an aggregate basis where the information cannot be disclosed on an individual basis for legal reasons. The Heads of Medicines Agencies (HMA) and the European Medicines Agency have also produced a joint guidance document on the identification of commercially sensitive information that is provided under the marketing authorisation (MA) application regime and that must be protected.

Nevertheless, in any instance where competitively sensitive information may be received by a competitor the practice should be assessed for competition law compliance as the obligations, protections are likely to vary on a case-by-case basis.

Anticompetitive unilateral conduct

Abuse of dominance

In what circumstances is conduct considered to be anticompetitive if carried out by a firm with monopoly or market power?

Originators and patent owners are entitled to protect their invention and thus the dominant position granted by it. However, conduct will be considered anticompetitive if it departs from 'competition on the merits'.

Over the years, the Commission has identified various practices that can be considered abusive under article 102 of the Treaty on the Functioning of the European Union (TFEU) when committed by dominant undertakings. These practices include:

  • Misleading representations before the authority in order to extend patent protection illegitimately (C-457/10 P, AstraZeneca v Commission).
  • Selective deregistration of Marketing Authorisations (MA) with the object and effect of preventing entry by generics and/or parallel traders (C-457/10 P, AstraZeneca v Commission).
  • Settlement agreements with generics to delay their entry into the market (C-307/18, Generics (UK) and others).
  • Acquisition of alternative non-infringing production technologies and the conclusion of patent settlements as part of 'a single and continuous exclusionary strategy' (T-691/14, Servier).
  • Excessive or unfair pricing (AT.40394, Aspen (closed by commitments)).


On 10 October 2022, the Commission formally adopted a Statement of Objections (SO) against Teva over an alleged abuse of dominance by:

  • 'artificially' extending the market exclusivity of its patent by strategically filing and withdrawing divisional patents, repeatedly, delaying entry of generics that were forced to file a new legal challenge each time, and
  • implementing a disparaging information campaign with the aim of reducing the use of competing drugs (exclusionary disparagement) (Case AT.40588).


The Commission is also currently investigating Vifor Pharma for an alleged abuse of dominance by carrying out a campaign of disparagement against its closest competitor in Europe in the market for intravenous iron treatment (Case AT.40577). It is reported that it is investigating Novartis for abusive litigation concerning a patent in the field of dermatological treatments.

The Commission Guidance enforcement priorities in applying article 102 TFEU provides general guidance (not sector specific) on the Commission’s approach to enforcing article 102. This Guidance is currently being revised. On 27 March 2023, the Commission amended the Guidance, introducing some changes to its enforcement priorities that are thought to somewhat allow the Commission more leeway to enforce more strictly under article 102. For example, the Commission notes that  it is appropriate to clarify that the concept of 'anti-competitive foreclosure' refers 'not only to cases where the dominant undertaking’s conduct can lead to the full exclusion or marginalisation of competition but also to cases where it is capable of resulting in the weakening of competition, thereby hampering the competitive structure of the market to the advantage of the dominant undertaking and to the detriment of consumers', and that:


it is not appropriate to use the element of profitability of the dominant undertaking’s conduct in order to determine the Commission’s enforcement priorities, i.e. to pursue cases as a matter of priority only where the dominant undertaking can profitably maintain supra-competitive prices or profitably influence other parameters of competition, such as production, innovation, variety or quality of goods or services”. Instead the anticompetitive foreclosure will now be defined as a situation “where the conduct of the dominant undertaking adversely impacts an effective competitive structure thus allowing the dominant undertaking to negatively influence, to its own advantage and to the detriment of consumers, the various parameters of competition, such as price, production, innovation, variety or quality of goods or services.


The Commission is planning to replace the Guidance completely by issuing new guidelines. It has launched an evaluation on adopting guidelines on exclusionary abuses of dominance. It aims to publish draft guidelines in 2024 and adopt them in 2025.

De minimis thresholds

Is there any de minimis threshold for a conduct to be found abusive?

There is no de minimis threshold to establish abuse under article 102 TFEU.

Market definition

Do antitrust authorities approach market definition in the context of unilateral conduct in the same way as in mergers? If not, what are the main differences and what justifies them?

Both in merger cases and in antitrust investigations, the Commission conducts its market definition of relevant pharmaceutical markets according to the methodology set out in the Market Definition Notice (the revision of which is expected to be adopted in the third quarter of 2023 (see here, including the proposed draft revised Notice)). In merger cases, the Commission's start-point is to consider level 3 of the Anatomical Therapeutical Chemical classification system (ATC) to define the relevant market, but it may look more narrowly at ATC level 4, molecule level or a bespoke definition.

In abuse of dominance cases, the Commission tends to define the market at the molecular level. As the General Court held in Servier (T-691/14; currently under appeal), in addition to price competition, non-price competition factors must be considered in the analysis because these affect the choice of treatment by prescribing doctors. Moreover, as the Court of Justice of the EU (CJEU) held in Generics (UK) and others (C-307/18), the Commission must take into account generic versions of a medicine when defining the relevant market, provided that the generic market entry does not meet insurmountable barriers.

Establishing dominance

When is a party likely to be considered dominant or jointly dominant? Can a patent owner be dominant simply on account of the patent that it owns?

The EU courts have defined dominance as 'a position of economic strength enjoyed by an undertaking which enables it to prevent effective competition being maintained on the relevant market by affording it the power to behave to an appreciable extent independently of its competitors, customers and ultimately of its consumers'. In practice, the Commission considers high market shares (40 per cent or above) maintained over a long period as the main factor to establish dominance. However, it considers other factors, such as the relative market shares of competitors, existence of barriers to entry or expansion, first-mover advantage and incumbency, possession of key technology, economic strength, etc.

In the pharmaceutical sector in particular, IP rights are perceived as an important barrier to entry and/or expansion and may in themselves give rise to a dominant position. This is because competitors and potential new entrants may not be able to manufacture or market the same products during the period of protection without infringing the patent. However, as the General Court confirmed in Servier (T-691/14), the Commission must consider other factors, as well as the IP rights, such as potential interchangeability between the relevant molecule and other treatments.

Joint dominance is possible where two or more legally independent parties have strong legal, organisational or contractual links such that they are able to adopt a common policy on the market. The Commission may also consider other factors, such as market conditions, level of transparency, barriers to entry, etc.

IP rights

To what extent can an application for the grant or enforcement of a patent or any other IP right (SPC, etc) expose the patent owner to liability for an antitrust violation?

Originators have the right to obtain and enforce patents or other IP rights to protect their invention. However, in exceptional circumstances, the grant or enforcement of IP rights may constitute an abuse of dominance if it forms part of an overall strategy with a clear anticompetitive aim.

In a landmark case, the Commission found that AstraZeneca's SPC applications before several patent offices constituted an abuse of dominance, as it had submitted incorrect and misleading information to obtain protection and thus prolong its market dominance. The CJEU upheld the decision (C-457/10 P AstraZeneca).

The Commission is currently investigating Teva for allegedly pursuing an anticompetitive strategy by strategic filing and withdrawing applications for divisional patents with the sole purpose of delaying market entry by generics, who were forced to file a new legal challenge each time (Case AT.40588). On 10 October 2022, the Commission formally adopted a Statement of Objections (SO) against Teva in the context of this investigation.

When would life-cycle management strategies expose a patent owner to antitrust liability?

Patent owners have the right to enforce and secure the protection of their inventions for which they have a valid patent. However, various practices may be considered abusive when they result in a deviation from competition on the merits. These abusive practices can take a variety of forms.

For example, the Commission found that AstraZeneca had abused its dominant position through selective deregistration of its marketing authorisations (MA) in those countries where generic companies had applied for MAs, thereby preventing the generics from using a simplified procedure to obtain authorisations (C-457/10, P AstraZeneca).

The Commission is currently investigating Teva for allegedly pursuing an anticompetitive strategy by strategic filing and withdrawing applications for divisional patents with the sole purpose of delaying market entry by generics, who were forced to file a new legal challenge each time (Case AT.40588). On 10 October 2022, the Commission formally adopted a Statement of Objections (SO) against Teva in the context of this investigation.

National competition authorities have investigated other types of anticompetitive practices in lifecycle management, such as exclusivity rebates offered to hospitals to prevent generic entry, and predatory pricing practices.


Can communications or recommendations aimed at the public, HCPs or health authorities trigger antitrust liability?

The Commission has concluded that the provision of misleading information to consumers or the medical sector may constitute an abuse of dominance (see C-457/10 P AstraZeneca, and C-179/16 Hoffmann-La Roche and Novartis).

In its current investigation into Teva (Case AT.40588), the Commission is investigating whether Teva engaged in a communication campaign aimed at reducing the use of competing drugs. The campaign, addressed at healthcare bodies and professionals, would have targeted competing products by creating concerns over the safety of their use, despite their approval by the relevant public health authorities. Generic manufacturers have often complained that such exclusionary disparagement tactics create barriers to market entry for them, making it difficult to compete with originators’ drugs despite patent expiry for the active ingredient.

Authorised generics

Can a patent owner market or license its drug as an authorised generic, or allow a third party to do so, before the expiry of the patent protection on the drug concerned, to gain a head start on the competition?

As provided by article 82(1), second subparagraph, of Regulation (EC) No. 726/2004, a patent owner may submit more than one marketing application with a view to co-marketing a medicine. Gaining a head start on the competition would not be an infringement by the originator. However, if the sole aim of the practice is to prevent or delay the entry of other generics to the market this could constitute an abuse of dominance.

Restrictions on off-label use

Can actions taken by a patent owner to limit off-label use trigger antitrust liability?

Actions taken by a patent owner to limit off-label use can trigger antitrust liability. For example, in Hoffmann-La Roche and Novartis (C-179/16), the CJEU held that the agreement between Roche and Novartis, intended to disseminate misleading information relating to adverse reactions resulting from the off-label use of a medicine, constituted a restriction of competition 'by object'.


When does pricing conduct raise antitrust risks? Can high prices be abusive?

Patent owners are free to set prices provided that, if the company is in a dominant position, it does not foreclose competitors or exploit consumers.

Setting predatory prices (ie below costs), may constitute an exclusionary abuse of a dominant position under article 102 TFEU. In AKZO (C-62/86), the CJEU set out a two-step test whereby (1) prices are presumed to be predatory if they are set below average variable costs, and (2) if prices are set below average total costs but above variable costs, it will be necessary to prove additional elements to establish an anticompetitive intent. Although the Commission has not to date pursued any cases in the pharmaceutical sector, an exclusivity rebate policy implemented by a patent owner in a dominant position could be considered abusive (there have been such cases at a national level; see, for example, in the Netherlands).

Excessive pricing may be an abuse of a dominant position. In May 2017, the Commission launched a formal investigation into Aspen's excessive pricing conduct – the first excessive pricing investigation by the Commission in the pharmaceutical sector. It closed the investigation in February 2021 when it accepted legally binding commitments offered by Aspen, which removed its concerns. Under the commitments Aspen agreed to reduce its prices across Europe for each of the drugs involved by an average of 73 per cent, thereby reducing the prices to below 2012 levels, when it acquired the drugs and gradually started to increase prices.

Sector-specific issues

To what extent can the specific features of the pharmaceutical sector provide an objective justification for conduct that would otherwise infringe antitrust rules?

In GlaxoSmithKline (Joined cases C-501/06, C-213/06, C-515/06 and C-519/06), the CJEU held that pricing restrictions on parallel trade in the pharmaceutical sector had as their object the restriction of competition, but that the Commission should have assessed a possible exemption under article 101(3) taking into account the arguments put forward by GSK in relation to the specific nature of competition in the pharma sector. GSK had argued that its pricing strategy did not restrict competition because the price differences between member states resulted from national price regulations. It claimed that there were consumer welfare arguments for justifying a restriction on competition, referring to the losses suffered as a consequence of parallel trade, which affected its R&D budget for developing new and innovative drugs. The Commission should have taken these arguments into account but had failed to do so.

Updates and trends

Recent developments

Are there in your jurisdiction any emerging trends or hot topics regarding antitrust regulation and enforcement in the pharmaceutical sector?

The pharmaceutical sector has long been a focus of the Commission's enforcement activity, which has recently reaffirmed its aim to ensure innovation and competition in the sector. Pay-for-delay agreements remain in the spotlight and the Court of Justice of the EU’s ruling in Servier, expected later in 2023, is likely to shed further light on the Commission's approach to such agreements (the General Court quashed the Commission’s decision due to errors in its approach to market definition; however AG Kokott advised the CJEU to overturn the General Court's findings and to rule that all settlement agreements concluded by Servier with the generics constituted restrictions of competition by object).

The Commission is also widening its scope of intervention in the pharmaceutical sector. In particular, the Commission currently has at least three investigations open for abuse of dominance in the pharmaceutical sector, namely against (1) Teva for misuse of the patent system and disparagement (Case AT.40588), (2) Vifor for a disparagement campaign against its competitor (Case AT.40577), and (3) it is reported against Novartis for abusive litigation concerning one of its patents. The outcome of these investigations will have important consequences for how pharmaceutical companies can manage their patent prosecution and other life-cycle strategies.

As for merger control, the Commission is actively seeking to protect innovation in its merger reviews, including by seeking jurisdiction under its revised approach to article 22 EUMR, which enables referrals from member states to the Commission even for cases not meeting the relevant EU or national thresholds. The prohibition of the Illumina/Grail merger (M.10188) and the ongoing investigation into the alleged 'gun-jumping' infringement in this transaction (M.10483) are good examples of the Commission's new approach and how it may affect acquisitions of innovative pharmaceutical companies in future. Illumina and Grail have brought several appeals before the General Court and the European Court of Justice challenging the Commission's approach, including, inter alia, its jurisdiction to review the deal and the Commission's ongoing 'gun-jumping' investigation. The outcome of these appeals will shape the Commission's revised application of article 22 EUMR, which represents a new era of merger control enforcement in the EU. The Towercast judgment of the CJEU confirms that article 102 TFEU can be used to challenge acquisitions otherwise falling below merger control thresholds, with the Advocate General in that case explicitly referring to there otherwise being 'a gap in protection …  in the coverage and control, under competition law, of acquisitions of innovative start-ups, for example, in the fields of internet services, pharmaceuticals or medical technology ("killer acquisitions")'. 


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