Overview of the Antitrust and Competition legal system in Europe

European antitrust policy is developed from two central rules set out in the Treaty on the Functioning of the European Union (TFEU): Art. 101 and 102. Details of the implementation of  those articles are set out in the Council Regulation (EC) no. 1/2003 of 16 December 2002 (the Antitrust Regulation).

Article 101 of the TFEU prohibits agreements between companies which prevent, restrict or distort competition in the EU and which may affect trade between Member States (anti-competitive agreements). These include, for example, price-fixing or market-sharing cartels. Anti-competitive agreements are prohibited regardless of whether they are concluded between companies that operate at the same level of the supply chain (horizontal agreements) or at different levels (vertical agreements).

Article 102 of the TFEU prohibits abusive conduct by companies that have a dominant position in a particular market, for example by charging unfair prices, by limiting production, or by refusing to innovate to the prejudice of consumers.

These rules and the procedures set out in the Council Regulation (EC) 1/2003 can be applied by both the European Commission (that has a number of investigative powers and may also impose fines) and the National Competition Authorities (NCAs) of each EU member state.

Overlap of Patent and Antitrust Law in Pharma

Patents are important tools for the business success of the pharmaceutical industry. However, patent law, which creates monopolies, and antitrust law, which promotes freedom of competition, lead to an inevitable tension.

Recently, financial pressure on the health expenditure of EU member states has created an environment in which there is an increasing focus on freedom of competition in the pharma sector, which could lead to the provision of cheaper drugs and healthcare services. It is therefore no surprise that in recent years, the pharmaceutical industry has been subject to rigorous scrutiny by antitrust authorities and the European Commission.

Areas which have attracted attention from antitrust authorities include pay-for-delay deals, that try to delay the entry of generic drugs on the market, and abuses in obtaining and enforcing patent rights.

Recent Case Law relating to pay-for-delay deals and abuse of dominant position

Both the European Commission and the National Competition Authorities have imposed heavy fines on a number of pharmaceutical companies that were found to be in breach of competition law by entering into pay-for-delay or other anti-competition agreements. The following is one examples (further examples can be provided on request).

Omeprazole (AstraZeneca): the first abuse in the pharmaceutical sector recognized by the European Commission

In June 2005, the European Commission imposed a 60 million euro fine to AstraZeneca for abuse of its dominant position relating to the drug omeprazole for two reasons: 1) misuse of the patent system to obtain supplementary protection certificates (SPCs) and 2) misuse of the pharmaceutical regulatory system by selective withdrawal of certain marketing authorisations.

The first abuse of dominance involved statements made by AstraZeneca to patent offices in various EU Member States regarding the date of the first marketing authorisation of omeprazole obtained in a European Union member state. The duration of an SPC is calculated starting from the first marketing authorisation in any of the European Union member states. The date of first marketing authorisation is therefore a key factor and AstraZeneca referred to March 1988 as the “first authorisation date”, whereas the Commission demonstrated that a marketing authorisation had been issued in France in 1987. This resulted in AstraZeneca gaining an additional period of protection for omeprazole in some countries, thus delaying market entry of the generic version by several months.

The second abuse found by the European Commission was the withdrawal by AstraZeneca of marketing authorisations for omeprazole in some European member states when it ceased marketing capsules in those markets and launched omeprazole tablets instead. By withdrawing the marketing authorizations for the capsules, generic companies were unable to rely on the clinical data that were used to obtain the marketing authorisation of the original product for the launch of their own. generic omeprazole capsules. This resulted in unlawful delay of the launch of generic omeprazole. This decision was ultimately upheld by the Court of Justice of the European Union (CJEU) in December 2012.