French Competition Authority fines Janssen-Cilag for abuse of dominant position
The French Competition Authority (“FCA”) issued a decision on 20 December 2017 sanctioning Janssen-Cilag (“Janssen”), a subsidiary of the Johnson & Johnson group, with a fine of 25 million euros for abusing its dominant position (“Decision”). The FCA found that Janssen had improperly delayed and restricted access to the French market of generic versions of its drug Durogesic®, an opioid with the active ingredient fentanyl used for pain relief, implementing a global communications strategy directed at health authorities and health professionals. Janssen has appealed the decision.
The case was initially raised with the FCA in 2009, by means of a complaint from Ratiopharm (now Teva). This led to an initial decision from the FCA on 31 July 2009, in which it refused to grant interim measures but decided to pursue its investigation on the merits.
Two separate practices sanctioned as a single and continuous infringement
First, the FCA relied on various communications made by Janssen to health professionals to support the claim that the former had engaged into a vast campaign disparaging generic versions of its drug, questioning their bioequivalence, effectiveness and safety for patients previously treated with Durogesic®.
The FCA concluded that Janssen notably misused a warning message issued by the French health authority (“ANSM”, formerly AFSSAPS) concerning the risk in switching between fentanyl specialties for certain categories of patients (notably children and the elderly) to provide inaccurate and incomplete information to doctors and pharmacists. More specifically, according to the FCA, Janssen slightly modified the language of the ANSM’s statement by only emphasizing the risks associated with switching from Durogesic® to a generic version, leading professionals to believe (in the FCA’s view) that only substitution of the originator drug by a generic was dangerous and thus not recommended. In analyzing this behavior, the FCA confirmed the approach it had taken in previous cases, in particular the Plavix (Sanofi) case, in which it considered that the truncated presentation of objective elements altering the reality qualified as disparagement under French competition law.
The FCA also paid particular attention to the language used by Janssen in its written communications, both internal and external. For example, terms such as “team ANTI-génériques” or wording repeatedly used in communications such as “risk”, “concern”, “adverse effects”, “accident” were specifically relied upon by the FCA to establish that Janssen had developed a global anticompetitive strategy against generics.
Secondly, and for the first time, the FCA targeted the repeated intervention of Janssen before the ANSM as an anticompetitive practice. The FCA characterized this as an attempt to delay the granting of the marketing authorization of generics in France. In doing this, the FCA has moved into the sphere of health authorities’ prerogatives. In the past, pharmaceutical companies have been able to engage in fairly open discussions with health authorities.
These two practices, which were implemented over several months before and on arrival of the generic versions of Durogesic® on the French market, were considered by the FCA as part of a global strategy aimed at restricting competition by preventing competitors from entering the market for fentanyl.
An unprecedented extension of the FCA’s intervention within the natural sphere of competence of health authorities
The second infringement, in which Janssen was found to have exerted unlawful pressure on the ANSM to delay generic entry, is totally unprecedented.
In its 2009 decision refusing to grant interim measures to Ratiopharm, the FCA expressly said that the ANSM has an exclusive prerogative to decide whether Janssen’s arguments questioning the bioequivalence of generic drugs were well-founded. Surprisingly, the FCA has taken a completely new approach in its decision of 20 December 2017. This will be a concern for originator pharmaceutical companies facing competition from generic (or biosimilar) entry as it raises a number of legal and practical questions.
By way of background, following the grant in Germany of a marketing authorization to Ratiopharm in April 2006 for a generic version of Durogesic®, Ratiopharm initiated a mutual recognition procedure with a view to obtaining a marketing authorization in several EU Member States, including France. But it was not until December 2008 that Ratiopharm finally obtained the right to place its generic product on the French market.
The FCA considered that the delay in the granting of the marketing authorization in France was the result of Janssen’s lobbying actions against the approval of the generics, using alarmist and unfounded arguments. All the studies showing the bioequivalence of the products had already been conducted, approved and the ANSM had received an injunction from the European Commission (“Commission”) at the end of 2007, following an arbitration procedure, to grant a marketing authorization.
In practice, Janssen sent several letters to the ANSM and met with its representatives in 2008, challenging the bioequivalence of generics, arguing that Ratiopharm’s product was not “exactly the same”, and warning on the potential risks for patients in using this generic instead of Durogesic® given the narrow therapeutic margin of the product. The FCA concluded that Janssen also encouraged the ANSM to deviate from the Commission’s injunction and refuse to grant a marketing authorization to Ratiopharm.
This led the ANSM to initially block the grant of the marketing authorization. It then issued a warning statement to health professionals about the substitution of Durogesic® by a generic drug for certain particularly sensitive categories of patients, which Janssen used to its advantage.
However, according to the FCA, not only were these allegations not supported by any solid scientific evidence, but the ANSM had in fact no choice, under the European legal framework, but to grant the marketing authorization.
In this context, the FCA reached the view that Janssen’s intervention was unlawful and had a major impact on the market since the actual entry onto the market by Ratiopharm was delayed for a period of about 13 months (between late November 2007 and December 2008).
It is interesting to note that in its decision the FCA fails to address the fundamental difference between the marketing authorization, which the ANSM clearly had to deliver, and registration on the generics’ list, which was mandatory for Ratiopharm’s drug to obtain the status of generic but required an individual assessment by the ANSM. Thus, it might be asked whether the FCA’s legal assessment would apply in circumstances in which the ANSM was in fact not bound by any obligation to grant generic status to Ratiopharm’s drug, without that decision preventing its commercialization on the French market.
As mentioned, this Decision has been appealed by Janssen, and it will be interesting to see how the Paris Court of Appeal will approach the issue.
Takeaways and open questions
The Decision is very instructive in many respects:
- It is a reminder that pharmaceutical companies with a dominant position need to be extremely prudent in the messages they convey before, upon or just after the arrival of competition on the market for a given drug. Particular attention should be paid to the language used in written communications as the FCA will not hesitate to extrapolate an anticompetitive strategy based on a consistent body of language suggesting an intention to instill a doubt as to the bioequivalence and delay generic (or biosimilar) entry.
- It creates a new infringement, consisting of improperly intervening before health authorities to delay generic entry or make it more difficult. More particularly, the FCA now distinguishes two situations. On the one hand, a pharmaceutical company holding a dominant position cannot interfere with the decision-making process of the ANSM with the objective of convincing it to adopt a decision contrary to the applicable legal framework. On the other hand, a pharmaceutical company is free to objectively share its views on potential public health risks before the health authorities.
- It raises the issue as to the appropriate dividing line between an improper intervention and a lawful one, as there is a fine line between what can now be argued and what cannot. In practice, it seems that the scope of intervention of dominant firms vis-a-vis health authorities is now restricted to the presentation of objective arguments only, supported by reliable scientific evidence. Challenging the legal framework that constrains health authorities would not be acceptable from a competition law standpoint.