The U.K. specialist competition appeal body, the Competition Appeal Tribunal (CAT), has awarded
for the first time an interim payment for a competition law breach, to Healthcare at Home. The
interim payment was made in the context of a follow-on action stemming from a U.K. competition
law infringement decision against Genzyme. Ultimately, the novel application of the interim
payment is likely to have encouraged settlement of Healthcare at Home’s damages proceedings
against Genzyme.

In the U.K. (and the EU), the “abuse” of a dominant position will infringe competition law. A party
typically holding more than a 50 percent market share may be held to have a dominant position. It
is not illegal to hold a dominant position, but it is illegal to “abuse” a dominant position. The
charging of excessive or discriminatory prices by a dominant undertaking may be considered to be
an abuse.

Following a complaint from Healthcare at Home, the U.K. Office of Fair Trading (OFT) held that
Genzyme abused its dominant position in respect of the supply of the drug Cerezyme (used to treat
the rare inherited Gaucher disease), including by charging a price for Cerezyme which prevented
competing independent third party homecare service providers from earning any profit margin, i.e.,
a “margin squeeze.”

The OFT fined Genzyme GBP 6.8 million and ordered it to end the alleged margin squeeze.
Healthcare at Home brought a follow-on damages claim to the CAT against Genzyme in April 2006
pursuant to the administrative decisions of:

  •  the OFT (March 2003); and
  •  the CAT (March 2004) in respect of Genzyme’s appeal of the 2003 OFT decision (where it
    upheld the OFT margin squeeze finding, but reduced the fine to GBP 3 million).

In November 2006, the CAT handed down a judgment granting Healthcare at Home an interim
payment of GBP 2 million for loss of margin.

Subsequently Healthcare at Home and Genzyme settled the proceedings on a confidential basis.
The CAT granted an order that Healthcare at Home’s claim be withdrawn on January 11, 2007.
In the U.K., undertakings which have suffered loss or damage as a result of an infringement of U.K.
or EU competition law may bring a claim for damages in front of the CAT, where a competition law
infringement decision is taken by the OFT or by the European Commission (U.K. Competition Act
1998, section 47A).

The advantage of bringing this type of claim, in comparison to bringing a claim for damages for a
competition law breach in front of a U.K. court where there is no pre-existing infringement decision,
is that there is no need to prove the competition infringement in the first place. Accordingly, the
chances of obtaining damages are significantly increased.

Healthcare at Home’s precedent success in obtaining interim relief in a relatively short period of
time may encourage other potential claimants to seek interim payments from the CAT in the
context of follow-on OFT or European Commission infringement decision claims.