Pharmaceutical regulatory law

Regulatory framework and authorities

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

The most relevant Germany-wide laws with respect to pharmaceutical products, including generic drugs, are as follows:

  • the Medicinal Products Act (AMG); and
  • the Ordinance on the Manufacturing of Pharmaceuticals and Active Ingredients (AMWHV). The German laws also implement the EU Directives and Regulations, in particular Directive 2001/83/EC and Regulation 726/2004.

The AMG covers all pharmaceutical products, including generic drugs. The AMG’s main focus is on authorisation of marketing, manufacturing, sale or distribution, exports and imports of pharmaceutical products. It also provides a framework for pharmacovigilance systems and contains provisions on pricing. The AMWHV sets out specific rules and obligations with regard to the manufacturing of pharmaceutical products or ingredients (eg, regarding manufacturing premises, hygienic measures and personnel).

Other relevant laws include the following:

  • the Fifth Social Security Act (SGB V) and the Ordinance on the pricing of medicinal products; and
  • the Act on advertising in the health sector.
Regulatory authorities

Which authorities are entrusted with enforcing these rules?

Three federal agencies are responsible for enforcing the applicable rules:

  • the Federal Institute for Medicines and Medicinal Products is responsible for the regulation of most drugs for human use;
  • the Paul-Ehrlich-Institute - the Federal Institute for Vaccines and Biomedicines is responsible for the regulation of a subset of pharmaceutical products for human use (vaccines, blood and stem cell products) and certain drugs for animal use (eg, vaccines); and
  • the Federal Authority for Consumer Protection and Food Security is responsible for most drugs for animal use.

The responsibilities of each of these three federal agencies extend to pharmacovigilance in relation to the products they cover.

Production and wholesale authorisations are not granted by federal authorities but by the competent authority at the regional state (Länder) level. Quality and environmental inspections are usually carried out by the authorities of the state in which a manufacturer has its seat.


Are drug prices subject to regulatory control?

Prices for pharmaceutical products requiring a prescription (prescription-only drugs) are strictly regulated. Prices for over-the-counter (OTC) drugs are not.

There are a number of rules that apply to prescription-only drugs. First, while pharmaceutical companies can in principle set their prices freely, the de facto maximum price is the amount that is reimbursed by the statutory health insurance. The reimbursement amount is either agreed on by a federal committee and the pharmaceutical companies, or determined by a joint committee if an agreement cannot be reached. The price applies to all pharmaceutical products using the same active ingredient or a comparable active ingredient, or that have comparable therapeutic effects. Pharmaceutical companies can price their products above the reimbursement amount in which case patients need to pay the excess amount. However, as patients tend to choose products for which no excess payment is needed, pharmaceutical companies face pressure to align the price of their products with the reimbursement amount. Pharmaceutical companies may alternatively enter into a rebate agreement with the statutory health insurances as their product would then be exempted by any supplemental payments by patients.

Second, several (indirect) rebates are prescribed by law for the benefit of the public health insurance, for example, for certain generic drugs. In addition, the moratorium on prices for finished pharmaceutical products (as opposed to drugs manufactured by a pharmacist) provides that pharmaceutical companies must grant a rebate compensating price increases by reference to the prices of 1 August 2009 (currently through 2022).

Third, the price margin between manufacturers and wholesalers as well as between wholesalers and pharmacies is fixed by law. The relevant statute provides that, in general, pharmacists must sell either a less expensive product that is comparable to the prescribed product in terms of dose, package size and pharmaceutical form, or a product subject to a rebate agreement.

Pharmacies based in other EU member states selling by mail order are not bound by the fixed prices for prescription-only drugs. The European Court of Justice (CJEU) ruled that such an obligation would infringe the principle of free movement of goods (Deutscher Apothekerverband/DocMorris, C-322/01, 11 December 2003). The reasoning behind this is that non-German pharmacies cannot provide personalised or emergency services to customers and can therefore only compete on price.

Manufacturers and wholesalers can in principle, subject to limited exceptions, freely determine their prices with respect to OTC drugs.


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

While the AMG regulates the distribution of pharmaceutical products, multiple other laws contain relevant provisions, for example, the Medical Products Act, the Ordinance on the Manufacturing of Medicinal Products and Active Ingredients, the Ordinance on the Operation of Wholesales for Medicinal Products, the SGB V, the Ordinance on Pricing of Medicinal Products, the Act on the Advertising of Medicines, the Pharmacies Act and the Act on the Operation of Pharmacies.

The distribution channel varies by type of pharmaceutical product. The general rule is that the retail level is reserved for pharmacies, the ‘Pharmacy Monopoly’, which has been confirmed by the German Constitutional Court. Since the CJEU’s ruling in Deutscher Apothekerverband/DocMorris, C-322/01, 11 December 2003, Germany has amended its laws to allow for the sale of prescription-only drugs by mail order.

There are a number of exemptions to the Pharmacy Monopoly, for example, the sale of drugs for animal use and OTC products is not limited to pharmacies. The latter is governed by the Ordinance on pharmacy-only and over-the-counter medicinal products. Further, section 47 of the AMG authorises pharmaceutical companies and wholesalers to sell certain products to non-pharmacy customers in certain cases, ‘authorised direct supplies’. This includes sales to other pharmaceutical companies or wholesalers, sale of certain products to hospitals, public health authorities, veterinarians, dentists, research institutions and universities, and provision of samples to certain health professionals.

Lower German courts have recently ruled that it is prohibited to sell pharmaceutical products through vending machines.

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 AMG explicitly provides in section 52b, paragraph 4 that the Act against Restraints of Competition (GWB) applies to the supply of pharmaceutical products, and the provisions of the AMG are without prejudice to the rules of the GWB. However, competition in the pharmaceutical sector is limited by the laws and regulations referenced above. In particular, prices for prescription-only drugs are regulated, which limits competition. Also, pharmacies are generally obliged to sell an equivalent lower priced product than the one prescribed to the patient.

Notwithstanding, competition authorities may intervene to tackle excessive pricing issues. Further, the organisation by pharmaceutical companies of the distribution of their pharmaceutical products, notably the implementation of allocation systems, may raise competition issues, insofar as such systems entail restrictions to parallel trade. Competition authorities may also, under certain circumstances, intervene with respect to information provided to public authorities. In addition to the GWB, the EU competition rules are also applicable in Germany and the German authorities will often be guided by precedents at the EU level.

Competition legislation and regulation

Legislation and enforcement authorities

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

The relevant competition law provisions are contained in the GWB. The GWB does not include provisions that are specific to the pharmaceutical sector. As such, the general rules (in respect of abuse of dominance or relative superior market power, merger control and collusion) apply. Articles 101 and 102 of the TFEU, to which the GWB explicitly refers, are also applicable. Provisions regarding fines for the infringement of GWB rules are set out in the Act on Administrative Offences.

The Federal Cartel Office (FCO) is responsible for the enforcement of the GWB. The FCO’s power also extends to investigations under articles 101 and 102 of the TFEU as long as the European Commission has not opened an investigation. FCO decisions can be appealed to the Higher Regional Court of Düsseldorf.

State cartel offices have limited responsibilities and are of little practical relevance. Criminal prosecutors have investigative competences in relation to conduct that also falls under criminal laws.

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 FCO’s competence to investigate anticompetitive conduct in the pharmaceutical sector does not differ from its powers with respect to other industries.

The FCO may conduct a sector inquiry if it believes there to be sector-wide concerns in a particular industry. When investigating specific conduct, the FCO may send requests for information to the alleged infringer or infringers, but also to third parties, once it has opened a formal investigation. The FCO can also conduct inspections (dawn raids), and review and seize documents and materials (physical and electronic) at a company’s premises and at the private residences of the company’s management or other employees.

Once it has found that an infringement occurred, the FCO can impose sanctions directly without prior petitioning of a court or other authority. The FCO may impose fines on persons and entities that participated in an infringement of antitrust law or violated an FCO decision.

According to sections 32 to 34 of the GWB, the FCO may impose all remedies that are necessary to bring an infringement to an end to the extent that they are proportionate to the infringement. This includes, in particular, the right to impose behavioural remedies (ie, measures that require action by the infringer). According to section 32a of the GWB, the FCO may also impose interim measures in cases of urgency if there is a risk of serious and irreparable damage to competition (the duration of interim possibility of structural remedies). These include, in particular, the ability to order the divestiture (unbundling) of companies. Such structural remedies would, however, be subject to a strict proportionality test and can only be applied where behavioural remedies would be insufficient to remedy an infringement.

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?

Sections 33 and 33a of the GWB provide that market participants affected by a company’s anticompetitive behaviour (affected persons) can claim (i) injunction, and (ii) rectification and damages. Claims are limited to the actual level of damages and necessary legal expenses. Standing to claim for damages is not limited to immediate customers (or competitors). With respect to indirect purchasers, the passing-on defence is permissible under German law, as is now expressly stipulated by section 33c of the GWB (and had, in principle, also been acknowledged before based on a ruling of the German Federal Court of Justice (BGH)).

Decisions of competition authorities - including those in other member states of the EU - may be introduced into civil proceedings as proof of the actual infringement (section 33b GWB). These decisions are binding on the court ruling on the damages claim (ie, the existence of an infringement as such cannot be challenged as part of the litigation).

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?

The FCO can conduct sector inquiries to analyse the structure and competitive landscape in a specific sector. The FCO has conducted sector inquiries into industries such as concrete, food retail, electricity wholesale and waste disposal.

Since the introduction of the FCO’s sector inquiry power in 2005, the FCO has completed 12 sector inquiries. It is currently, inter alia, conducting inquiries into the hospital, online advertising and household waste disposal sectors. The FCO has not yet conducted an inquiry into the pharmaceutical sector.

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?

There is no specific procedure with regard to interactions between the FCO and health or regulatory authorities. The FCO may contact these authorities to obtain information or an opinion on specific aspects of a case, but this would be on an informal and advisory basis only.

NGO involvement

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

When investigating competition law matters, the FCO frequently requests information from organisations that have particular knowledge of the markets under investigation.

In 2005, the German legislator introduced section 34a of the GWB, which provides for a subsidiary right for commercial or independent professional interest associations as well as qualified associations for consumer protection to conduct actions to skim off economic benefits in the case of voluntary competition law infringements that have resulted in a harm for a high number of purchasers or suppliers. However, this institute has thus far been practically irrelevant in practice as it only applies if other institutes (in particular, fine or payment of damages) are not triggered. Furthermore, benefits would be skimmed off to the benefit of the federal budget.

Review of mergers

Thresholds and triggers

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

There are no sector-specific thresholds. The thresholds of section 35 of the GWB apply to mergers in the pharmaceutical sector (general thresholds: combined worldwide turnover of all participating undertakings exceeding €500 million; one undertaking with a turnover in Germany exceeding €25 million; and at least one further undertaking with a turnover in Germany exceeding €5 million).

The newly introduced ‘transaction value’ test is of particular relevance to the pharmaceutical sector. This new threshold was introduced in 2017 to capture acquisitions of targets whose (German) turnover is low but who are considered to have significant potential to grow. According to this test, a concentration needs to be notified if, in the past financial year:

  • the combined worldwide turnover of all participating undertakings exceeded €500 million;
  • one participating undertaking had a turnover exceeding €25 million in Germany, but neither the target nor any other participating undertaking had a turnover in Germany exceeding €5 million;
  • the value of consideration for the transaction exceeds €400 million; and
  • the target is active in Germany to a relevant extent (local nexus).

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

The acquisition of patents or licences may be subject to merger notification if these assets constitute a substantial part of the total assets of an undertaking. According to the BGH’s case law, a part of the assets of an undertaking is considered substantial if it corresponds to the ‘substance’ of the market position of the seller, in the sense that the acquisition would result in a transfer of this market position to the acquirer. Accordingly, patents or trademarks may constitute a substantial part of an undertaking’s assets. This can also be true for licences if the licence agreement is concluded for a significant period of time.

Market definition

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

German courts and the FCO have generally followed the European Commission’s approach to market definition, which uses the European Pharmaceutical Marketing Research Association’s anatomical therapeutic chemical (ATC) classification system as a starting point. Referencing the European Commission’s practice, German courts have used the third ATC level to define the relevant product market but, similarly to the European Commission, have also stated that a further distinction could be made on the basis of the fourth ATC level. This was already the case in, for example, Fresenius/Schiwa (KG, Decision dated 18 October 1995 - Kart 18/93). In Novartis AG/Roche Holding AG (13 August 2003), the FCO applied ATC level three classification to identify product market overlaps. However, German courts have emphasised that substitutability must ultimately be considered from the perspective of the person deciding on the use of a drug, which will typically be the physician.

In addition to the ATC classification, the FCO has also taken other factors into account when defining product markets, for example, whether the drug is prescription-only or can be purchased OTC; and at the sales level whether the drugs are sold by brick and mortar pharmacies or their internet-based equivalents (see eg, DocMorris/Apotheke am Rothenbaum Birgit Dumke, B3-89/18 and Medco Health Solutions/Celesio, B3-59/10). The FCO may also consider therapeutical superiority or even the molecule used.

Geographic markets in the pharmaceutical industry have generally been defined as national, except for those for pipeline products where competition is often considered to take place at an EEA-wide or even global level. In Fresenius/Schiwa (KG, Decision 18 October 1995 - Kart 18/93), a German court confirmed the national scope of the market mainly based on demand side considerations. The court recognised, however, that legislative harmonisation at the European level may have the effect of broadening the geographic scope of the markets. In merger cases involving the acquisition of pharmacies, the FCO has assessed competition at national, regional, and postal code levels (DocMorris/Apotheke am Rothenbaum Birgit Dumke, B3-89/18 and Medco Health Solutions/Celesio, B3-59/10).

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 general principles apply - there is no pharmaceutical sector-specific guidance. The FCO will take into account the principles established in its decisional practice and the courts’ case law as well as EU precedents. Competition assessments are driven by the particular facts and circumstances of each case, which will inevitably entail an assessment of the structure and competitive dynamics specific to the markets under examination.

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?

Efficiency arguments have so far not gained much traction in the FCO’s decisional practice. In practice, the FCO typically assumes that a dominant company will have little or no incentive to pass efficiency gains on to its customers. Accordingly, the FCO and German courts have, to date, opted for a strict interpretation of the balancing clause, which provides that a merger cannot be prohibited if the undertakings involved are able to prove that the merger will lead to an improvement of market conditions, which outweighs the impediment to effective competition (section 36 GWB).

Horizontal mergers

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

There is no sector-specific test. In 2013, the dominance test was replaced by the significant impediment to effective competition (SIEC) test as used by the European Commission. The FCO applies the analytical framework of the SIEC test in a similar way as the European Commission: a horizontal merger raises competitive concerns where the operation leads to significant overlaps between the parties. Dominance remains a key standard for the FCO in its analysis.

Product overlap

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

The FCO takes into account the likelihood of success of creating a marketable product and whether other companies might be able to enter the same market. Barriers to entry can result, for example, from patents or long trial periods. The FCO, in the same way as the European Commission, will closely review transactions that could compromise R&D efforts and prevent the launch of new medicines. The FCO will also take into account pipeline products in this respect.


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

Unlike the EU Merger Regulation, the GWB does not provide for the possibility of commitments in Phase I, nor is there a deadline in Phase II for the submission of commitments. The FCO typically only accepts structural remedies, mostly in the form of divestments. Behavioural remedies are only accepted in very rare cases given that the GWB explicitly prohibits remedies that involve continuous behavioural control of the parties by the FCO.

The FCO recently published a guidance paper that explains in detail how it will typically assess the viability of a remedy proposal. The FCO has also published model texts for the different types of remedies and a trustee mandate on its website. These templates are similar to the models used by the European Commission, albeit considerably shorter.

Divestitures can only be made to a suitable purchaser approved by the FCO. The FCO will usually ask for an ‘upfront buyer’, meaning that the parties agree not to implement the transaction until the buyer has been approved (suspensive condition).

Anticompetitive agreements

Assessment framework

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

The general framework is set out in the GWB. Section 1 of the GWB provides for a prohibition of the same type of anticompetitive as article 101 of the TFEU. It prohibits agreements and concerted practices that are not exempted under section 2 of the GWB or the block exemption regulations as in force under EU law to which section 2 of the GWB explicitly refers. The GWB contains a dynamic referral to the block exemption regulations in order to ensure that national German law does not prohibit any agreements or concerted practices that would be lawful under EU law. Furthermore, the FCO and German courts apply articles 101 and 102 of the TFEU when dealing with antitrust cases that may affect trade between two or more EU member states.

Technology licensing agreements

To what extent are technology licensing agreements considered anticompetitive?

Technology licensing agreements are generally considered to be pro-competitive. The principles that are relevant under EU law also apply in a German context. This is true in particular for the application of Regulation No. 316/2014 on the application of article 101(3) of the TFEU to categories of technology transfer agreements and its corresponding guidelines. Research and development agreements and specialisation agreements are covered by specific exemptions under, respectively, Regulations Nos. 1217/2010 and 1218/2010.

Co-promotion and co-marketing agreements

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

The principles that are relevant under EU law also apply in a German context. Co-promotion and co-marketing agreements fall within the wider category of commercialisation agreements. These types of agreements are very common in the pharmaceutical sector and are generally considered to be pro-competitive. However, co-promotion and co-marketing agreements may lead to restrictions of competition if they give rise to an anticompetitive exchange of commercially sensitive information between actual or potential competitors, if their true aim is to delay market entry of a competing drug or if they result in an elimination of potential competition.

Other agreements

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

Any cooperation or communication with an actual or potential competitor involving an exchange of commercially sensitive information may be found to artificially increase transparency in the market or facilitate collusion. The focus is on confidential information that can be considered strategic, including prices (pricing policy, price increases, rebates), contractual conditions (eg, payment conditions, guarantee conditions), market position (eg, turnover figures, market shares, customers), production (eg, capacity, utilisation, costs) and commercial policy (eg, future plans, investments, innovations). Information relating to future prices and quantities is considered to be particularly sensitive. To mitigate the risk, undertakings should ensure that a minimum amount of information is exchanged, and that the exchange of information is justified by a legitimate commercial reason.

Issues with vertical agreements

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

Vertical restrictions relating to price as well as customer and territorial restrictions are of particular relevance in the pharmaceutical sector. In 2008, the FCO imposed a fine of €10.34 million on Bayer Vital GmbH, a distribution company of the Bayer Group, for influencing the resale prices of pharmacies for OTC products in an anticompetitive manner (the pharmacies had to follow price-recommendations to benefit from an additional discount on Bayer products).

Patent dispute settlements

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

Parties to a patent dispute settlement risk infringing competition law if the settlement goes beyond the specific scope of the protective right (eg, the material or territorial scope or with respect to its duration).

The BGH held (Judgment of 5 July 2005, X ZR 14/03) that a settlement providing for the payment of licence fees for patent-free countries was void, as the parties to the settlement were not in dispute as to whether sales to patent free countries constituted a patent infringement. The case law of the European courts (eg, General Court, T-705/14 et al, on the anticompetitive nature of settlement agreements between Servier and several generic companies) is also relevant in a German context.

Joint communications and lobbying

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

Joint communications of undertakings, in particular within the framework of trade associations, for example, in the form of recommendations, statements, oral statements in meetings, press releases or calls for boycott, constitute a competition law infringement if they are used as a vehicle for undertakings to coordinate their market behaviour. Illicit behaviour includes price recommendations, recommendations to pass on increases of raw material prices or unjustified calls for boycott. With respect to lobbying actions, undertakings must ensure, as with any contact with a competitor, that these are not misused as a vehicle for anticompetitive behaviour, such as exchange of sensitive information or data.

Public communications

To what extent may public communications constitute an infringement?

Public communications are usually not considered to be anticompetitive. However, for example, the public announcement of a price increase can constitute an infringement if it is in fact the final element of an agreement on pricing with a competitor, or if such a price increase is made public with an unnecessary amount of detail and long enough in advance to see whether competitors react by increasing their prices as well.

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?

Initiatives to ensure transparency, in particular with respect to relationships with and payments or services granted to HCPs, have increased in the past years. The increased transparency requirements imposed on the pharmaceutical industry could lead to increased risks of collusion and information exchanges. However, transparency rules usually provide for exceptions in the case of commercially sensitive information and compliance with transparency rules should not be considered as an antitrust infringement. For example, Regulation No. 536/2014 on clinical trials (application scheduled for 2020), which provides for reinforced transparency obligations with regard to clinical trial data via their publication on an EU database, allows limitations to disclosure to protect confidential information. Similarly, the European Federation of Pharmaceutical Industries and Associations (EFPIA) Disclosure Code, which requires all EFPIA members to disclose transfer of value to HCPs and healthcare organisations, allows aggregate disclosure when individual disclosure is not legally permitted.

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?

Section 19(1) of the GWB prohibits the abuse of a dominant position. This general prohibition does not include a precise legal definition of the term ‘abuse’. Instead, section 19(2) of the GWB provides for five non-exhaustive examples of prohibited abusive behaviour (exclusionary conduct, discriminatory behaviour, exploitative abuse, structural abuse and refusal of access). Section 20 of the GWB extends the prohibition to exclusionary and discriminatory behaviour by enterprises that are dominant only in ‘relative terms’ by enjoying relative market power with respect to small or medium-sized undertakings.

At least in theory, there are no per se abuses of dominance. While all relevant unilateral conduct may - theoretically - be justified, the FCO, as a practical matter, will not generally conduct an in-depth economic effects analysis to establish a prima facie abuse, but only determine whether the conduct at issue may be categorised in broad terms as abusive. It is then up to the companies concerned to provide an objective justification for their conduct, for example, cost efficiencies as justification for rebates.

Abuse of dominance cases have not played a major role in the FCO’s recent practice (the landmark decisions of the BGH date from 1976 - Valium and Vitamin B12). At the time, the BGH held that the largest pharmaceutical wholesalers in Germany were not allowed to refuse to buy and market products from small or medium-sized parallel importers given that those depended on the wholesalers to market their products in Germany. The Higher Regional Court of Frankfurt has found that the common clearing house for the pharmaceutical sector engaged in exclusionary conduct to the detriment of a generics manufacturer by imposing on it the obligation to obtain consent from the manufacturer of the original drug prior to the registration in its data bank, which is essential to market a drug in Germany (OLG Frankfurt, Decision dated 18 May 2010, 11 U 38/09 (Kart)).

De minimis thresholds

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

Not applicable.

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?

Conceptually, market definition is identical throughout the GWB. However, the assessment of whether a firm is dominant may vary depending on whether it is made ex ante in the context of a merger case or ex post in an abuse of dominance case.

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 general dominance test is applicable to pharmaceutical companies. A company will be found dominant if it has significant market shares enabling it to act independently from its competitors, customers and, ultimately, consumers. The mere possession of an IP right is generally not sufficient to establish a dominant position. However, in some circumstances, it may give rise to dominance where it enables an undertaking to prevent effective competition on the market.

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?

Actions relating to an application for the grant or enforcement of a patent or other IP rights are in principle not considered to infringe competition laws even if the holder of the right is in a dominant position. By definition, the holder of the IP right must be allowed to exclude others from the use of the protected right. This includes the right to decide to whom a licence is granted. As such, denying a licence will only amount to abusive behaviour in exceptional circumstances. The BGH has recognised an obligation to grant a licence if access to a downstream market is only possible with the help of a specific right that factually occupies the role of a standard (de facto standard).

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

The FCO has not discussed this question in its published decisions. However, as under EU law, life-cycle management strategies may be considered anticompetitive if they fall outside normal competition on the merits.


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

There are no published cases in which the FCO needed to assess whether communications to the public, HCPs or health authorities could be considered as an abusive behaviour. The FCO will likely apply the European Commission precedents in which it has already been considered that improper communications, in the form of misleading messages conveyed to the public, healthcare professionals or health authorities, may trigger antitrust liability (eg, the AstraZeneca and Roche/Novartis cases).

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?

A patent owner is, in principle, free to market products using patents it owns as well as to grant licences for the marketing of generics prior to the expiry of a patent. The FCO and German courts have yet to decide on possible anticompetitive effects of early entry strategies. However, such strategies may be considered anticompetitive if they have the same effects as a pay-for-delay agreement, in other words, if they incentivise a generic company to give up or delay its entry into the market.

Restrictions on off-label use

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

Actions of patent owners to limit off-label use can be qualified as competition law infringements.


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

The same considerations apply as in the EU. The following pricing strategies may be viewed as anticompetitive if implemented by a dominant undertaking:

  • strategies involving low prices, either in the form of predatory pricing or loyalty rebates; and
  • excessive pricing.
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?

The same general principles as applied at the EU level are relevant here. For example, it is generally accepted that pharmaceutical companies may implement allocation systems to protect their own legitimate interests, despite the fact that such systems amount to a restriction on parallel trade. Public health or public safety justifications may, however, not always work. For example, as per the Roche/Novartis ECJ judgment, compliance with regulatory obligations relating to pharmacovigilance and safety risks does not justify anticompetitive conduct.

Update and trends

Current trends and developments

40Are there in your jurisdiction any emerging trends or hot topics regarding antitrust regulation and enforcement in the pharmaceutical sector?

Emerging trends and hot topics40 Are there in your jurisdiction any emerging trends or hot topics regarding antitrust regulation and enforcement in the pharmaceutical sector?

The newly introduced transaction value threshold referenced in response to question 12 will enable the FCO to review potential ‘killer acquisitions’, in other words acquisitions of companies who are developing or marketing a product (potentially) competing with or substituting an important product of the buyer, even if the target company has yet to achieve significant revenues (in Germany).