On 2 December 2014, the Dutch Competition Authority ("ACM") announced it closed its investigation into a possible abuse of a dominant position of the pharmaceutical company AstraZeneca. The ACM investigated the substantial price difference that AstraZeneca charged for the drug Nexium for use inside and outside hospitals. The ACM alleged that AstraZeneca offered the drug Nexium to Dutch hospitals with large discounts and in fact at below cost price in an effort to bind patients in the market for sales outside of hospitals. However, since the ACM failed to prove that AstraZeneca enjoyed a dominant position on any of the relevant markets, no violation of Article 24 of the Dutch Competition Act ("DCA") or Article 102 TFEU could be established.
In the decision, the ACM distinguished two separate product markets: the market for products sold inside hospitals, prescribed by medical specialists to patients (intramural) and the market for outside sales prescribed to those patients that have been discharged from the hospital (extramural). According to the ACM, there were spill-over effects from the intramural to the extramural market, because physicians are inclined to prescribe the same drug administered in the hospital to that patient and patients tend to continue using the same brand. As a result, ensuring a dominant position on the intramural market could foreclose competitors offering cheaper generic versions on the extramural market. Hence, AstraZeneca could offset the losses incurred from offering Nexium to hospitals below costs by selling at much higher prices outside the hospitals.
In the present case, the ACM decided that AstraZeneca did not enjoy a dominant position on the intramural market since its market share only amounted to approximately 30%. In addition, assessing the effects of intramural prescriptions on extramural use, it concluded that there is no relevant product market on which AstraZeneca could behave independently of its competitors within the meaning of Article 24 DCA or Article 102 TFEU. Therefore, the ACM concluded there was no sufficient basis to establish that AstraZeneca had a dominant position on any of the potential relevant markets.