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?

European legislation only applies to the authorisation and marketing of pharmaceutical products. Pricing of pharmaceutical products falls within the exclusive jurisdiction of member states (see question 4). European Directive 2001/83/EC of 6 November 2001 on the Community code relating to medicinal products for human use sets forth the regulatory framework for the authorisation and marketing of pharmaceutical products in the European Union (EU). A pharmaceutical product cannot be placed on the European market without having obtained a marketing authorisation (MA), which can be granted through various procedures: (i) the mutual recognition procedure; (ii) the decentralised procedure; or (iii) the centralised procedure, the latter being mandatory for certain categories of medicines, including, but not limited to, biological medicinal products. The rules applicable to the centralised procedure are specifically set forth in Regulation (EC) No. 726/2004 of the European Parliament and of the Council of 31 March 2004. Both sets of rules also provide for abridged procedures for the authorisation and marketing of generic drugs. In particular, generic companies do not need to provide pre-clinical and clinical data if they can rely on the application file of a reference drug that has been duly authorised within the EU, and provided that the bioequivalence with such reference drug is evidenced by appropriate bioavailability studies.

Regulatory authorities

Which authorities are entrusted with enforcing these rules?

National health authorities are primarily responsible for monitoring the marketing of medicinal products on their respective territory. However, harmonisation among member states is ensured by the European Medicines Agency through referral mechanisms. This is notably the case when either a member state or the European Commission (the Commission) considers that urgent action is required because of a safety issue, or when there is a disagreement between member states regarding an MA application being evaluated in a mutual-recognition or decentralised procedure, on the ground of a potential serious risk to public health. These referrals lead to a Commission decision or an agreement between member states, as applicable, to be implemented by all member states or MA holders.


Are drug prices subject to regulatory control?

Prices of reimbursable medicinal products are generally subject to regulatory control by national health authorities, according to relevant national rules, which differ from one member state to another.


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

The applicable rules and distribution channels tend to vary depending on the category of pharmaceutical products.

In addition, each distribution channel has its peculiarities. For instance, distributors and MA holders are required, within the limits of their responsibilities, to ensure appropriate and continued supplies of medicinal products to pharmacies so that the needs of patients in each member state are covered (article 81 of Directive 2001/83/EC). In the same way, rules regarding distribution on the internet vary from one member state to another. Although generally restricted to OTC drugs, certain member states, such as the UK and the Netherlands, authorise the online sale of all types of medicinal products, including those that require a mandatory prescription.

The Commission and the European Court of Justice (ECJ) also ensure that member states do not impose restrictions that would not be necessary to protect public health and proportionate to such objective. In particular, pharmacies are subject to the same level of duties, regardless of the channel of distribution (brick and mortar or online), and the member state in which they operate.

Intersection with competition law

Which aspects of the regulatory framework are most directly relevant to the application of competition law to the pharmaceutical sector?

Certain aspects of the regulatory framework are closely intertwined with competition rules. In particular, despite prices being regulated, competition authorities may intervene to tackle excessive pricing issues. The Commission is, for example, currently investigating the practices of Aspen Pharma, which is suspected of having obtained a sudden and significant increase in the price of its cancer drugs following pressures exerted on health authorities of various member states and threats to withdraw the said drugs from the market. Similarly, 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. The ECJ has, for example, ruled that a pharmaceutical company holding a dominant position on the market may only refuse to sell its drugs to wholesalers if their orders are out of the ordinary (ECJ, Sot Lélos kai v GSK, 2008, C-468/06 to C-478/06); however, pharmaceutical companies cannot, despite the differences between member states, totally prevent parallel trade. Finally, competition authorities may also intervene with respect to information provided to public authorities, if they identify an anticompetitive conduct hitherto. For example, in the AstraZeneca case, the ECJ found that AstraZeneca had provided misleading information to patent authorities to unduly prolong its IP protection and delay generic entry (ECJ, AstraZeneca, 2012, C-457/10 P). More recently, following a question referred by the Italian Council of State for a preliminary ruling, the ECJ considered that the dissemination of misleading information to health authorities and health professionals concerning the consequences attached to the off-label use of a product could be regarded as a restriction of competition under article 101 of the TFEU (ECJ, Roche/Novartis, 2018, C-179/16).

Competition legislation and regulation

Legislation and enforcement authorities

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

The pharmaceutical sector is, like any other sector, subject to competition law. As such, the relevant legal framework is the Treaty on the Functioning of the European Union (TFEU) and, more particularly, articles 101 and 102, which respectively prohibit anticompetitive agreements and abuses of dominance. At the EU level, the Commission and, subsequently, the General Court and ECJ are responsible for enforcing those rules (see question 7). At the national level, the 28 national competition authorities are, for most of them, empowered to apply articles 101 and 102 of the TFEU, and thus share the enforcement work with the Commission. The Commission may also have jurisdiction to review certain mergers in the pharmaceutical sector, provided that the applicable thresholds triggering EU merger control are met (see question 12). If not, a merger may be reviewed by a national competition authority if the national merger control thresholds are met.

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 Commission may, either on its own motion or following a complaint, investigate practices of pharmaceutical companies or any other undertaking active in the pharmaceutical sector if it has suspicions that their conduct may breach articles 101 or 102 of the TFEU. Pursuant to Council Regulation 1/2003 of 16 December 2002 on the implementation on the rules on competition laid down in articles 81 and 82 of the Treaty (now 101 and 102 TFEU) (Regulation 1/2003), the Commission may impose fines up to 10 per cent of the worldwide turnover of the undertakings concerned. The Commission may also order the undertakings concerned to put an end to their behaviour. Over the past 10 years, the Commission has notably adopted three sanction decisions in pay-for-delay cases and imposed fines totalling approximately €590 million.

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?

Any party that considers being a victim of an anticompetitive conduct may seek damages for the harm suffered as a result of such conduct. Although neither the Commission nor the European courts have jurisdiction over such claims, which fall within the exclusive jurisdiction of national courts, the ECJ has long recognised, by way of principle, the right for any party to claim damages for loss caused by an anticompetitive agreement or abuse of dominant position, considering that private enforcement is quintessential to the full effectiveness of EU competition law (see Courage, 2001 (C-453/99), and Manfredi, 2006 (C-295/04 to C-298/04)). To this end, in 2014, the EU adopted a legislative framework aimed at harmonising national rules and facilitating actions for damages across the EU (Directive 2014/104/EU on certain rules governing actions for damages under national law for infringements of competition law provisions of the member states and of the European Union).

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?

Pursuant to article 17 of Regulation 1/2003, the Commission can conduct sector-wide inquiries and has already done so in the pharmaceutical sector. In 2008, the Commission launched a sector inquiry into the pharmaceutical sector with a view to identifying potential obstacles to market entry for pharmaceutical products, in particular for generic drugs. The Commission issued its final report on 8 July 2009. The main outcome of the report was that certain practices of pharmaceutical companies contributed to delay generic entry on the market, although other factors, including potential shortcomings in the regulatory framework, were also identified. As a result, the Commission decided to increase its scrutiny of the pharmaceutical sector, which, since then, has regularly been in the spotlight with several investigations being opened against pharmaceutical companies for alleged anticompetitive conduct. To date, this led to the adoption of three sanction decisions against, as the case may be, both originator and generic companies for having entered into pay-for-delay agreements (see the Lundbeck, Servier and Fentanyl cases). More recently, the Commission issued another report covering the period 2009-2017, which provides an overview of antitrust law enforcement during this period. It follows that the pharmaceutical sector is still a key enforcement priority for the Commission, with the goal to ensure access to affordable and innovative medicines across the EU.

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?

Not applicable.

NGO involvement

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

Non-government groups such as NGOs, trade associations or consumer groups can play a limited role in the enforcement of competition law, by either filing a complaint to the Commission alleging an anticompetitive conduct or in the context of merger control, if consulted by the Commission itself as part of a market test. These organisations may also contribute to public consultations launched by the Commission as part of sector inquiries. Finally, they may intervene before the Commission and the European courts to support or oppose the arguments of one party. This was notably the case in AstraZeneca where the European Federation of Pharmaceutical Industries and Associations (EFPIA) intervened in support of AstraZeneca’s appeal to have the Commission’s decision set aside (ECJ, AstraZeneca v European Commission, 2012, Case C-457/10 P). Similarly, the Italian health authority decided to intervene in the context of the question referred to the ECJ for a preliminary ruling in the Roche/Novartis case concerning the off-label use of Avastin (ECJ, Roche/Novartis, 2018, C-179/16).

Review of mergers

Thresholds and triggers

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

There are no specific thresholds relating to mergers in the pharmaceutical sector. Accordingly, the relevant thresholds triggering a notification to the Commission are those provided by article 1 of Council Regulation No. 139/2004 (EUMR). A notification is notably required when: (i) the combined aggregate worldwide turnover of all the undertakings concerned exceeds €5 billion; and (ii) the aggregate EU-wide turnover of each of at least two of the undertakings concerned exceeds €250 million; unless (iii) each of the undertakings concerned achieves more than two-thirds of its aggregate EU-wide turnover within one and the same member state (there is also an alternative set of thresholds that could apply in case the above thresholds are not met).

The Commission is, however, reflecting upon the opportunity to introduce a specific threshold based on the value of the transaction (similar to those recently introduced in Germany and Austria) to catch important operations, notably in the pharmaceutical sector, which currently escape merger control as a result of the target having no or insignificant turnover in the EU. In practice, this could notably be the case of an acquisition by a large pharmaceutical company of a biotech company that has developed a promising new drug that has not yet obtained a marketing authorisation. Even though such cases may be captured by the Commission as part of the referral system from member states (ie, a mechanism laid down in the EUMR, allowing for a reallocation of cases between the Commission and national competition authorities), this is not systematic and this may lead to an enforcement gap in the EU (see for example the acquisition of Phamacyclics by AbbVie, which escaped merger control in the EU but that the Commission considers being a transaction with cross-border effect in the European Economic Area (EEA) that it should have had the opportunity to review). However, the responses to the public consultation that were published in July 2017 showed that the majority of the respondents do not consider it is necessary to change the current thresholds. According to the recent report released by the Commission on the competition enforcement in the pharmaceutical sector (2009-2017), such results are still ‘under assessment’ by the Commission.

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 control over assets, including intangible assets (such as brands and patents), may be deemed a concentration if those assets constitute the whole or part of an undertaking to which turnover can be attributed either presently or in the foreseeable future. In that respect, the Commission found, in Novartis/GSK, that the acquisition of rights to develop, manufacture and commercialise a pipeline product undergoing Phase III clinical trials constituted a concentration, because such transaction was expected to enable the acquirer to successfully launch the product and generate turnover within a reasonable timeframe (see COMP M.7872, 2015).

Market definition

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

Product market

As a starting point for market definition, the Commission consistently refers to the third level of the anatomical therapeutic classification (ATC), which groups pharmaceuticals products based on their therapeutic indications. It must, however, be distinguished between various cases, since the approach of the Commission tends to vary depending on whether the merger involves two originator companies, one originator company and one generic company, or two generic companies.

First, concerning mergers between two originator companies: the ATC3 level is often retained as a good proxy for market delineation; however, it may not always be relevant and may lead the Commission to envisage alternative market definitions, either at a narrower level (eg, ATC4) or a combination of various categories of medicines that, despite not belonging to the same ATC3 or 4 category, may be considered as interchangeable. In that respect, several factors may have an impact on the interchangeability of drugs, such as dosage, pharmaceutical form and administration.

Second, in cases involving an originator company and a generic company or two generic companies, the Commission tends to automatically define markets more narrowly, at the level of the molecule since the products are chemically and therapeutically identical and compete mainly on prices (see, for example, COMP/M.7379, Mylan/Abbott EPD-DM, 2015, COMP/M.5295 - Teva/Barr, 2008; COMP/M.7746, Teva/Allergan Generics, 2016). The same approach also applies to biosimilars (see, for example, COMP/M.7559, Pfizer/Hospira, 2015). Finally, in cases involving two generic companies, the Commission may also, at the stage of the competitive assessment, take into account the overall portfolio of the merging parties (see COMP/ M.7746, Teva/Allergan generics, 2016).

Another classic market segmentation concerns the distinction between prescription pharmaceuticals and OTC drugs, for which differences in the legal framework, marketing, distribution and rules on reimbursement exist (see, for example, COMP/4007, Reckitt Benckiser/Boots Healthcare International, 2006). However, in some cases, the Commission considered that competition might take place between OTC products and prescription products, notably in situations of mixed status, namely, where the drug is available both on prescription or OTC (see, for example, COMP/M.5778, Novartis/Alcon, 2010).

Geographic market

The Commission has consistently held that the relevant geographic market for finished dose pharmaceutical products is national in scope.

Sector-specific considerations

Are the sector-specific features of the pharmaceutical industry taken into account when mergers between two pharmaceutical companies are being reviewed?

When reviewing mergers in the pharmaceuticals sector, the Commission is notably vigilant on transactions that could compromise R&D efforts and prevent the launch of new medicines or the extension of the therapeutic use of existing medicines. For example, this was the case in Novartis/GlaxoSmithKline Oncology (see COMP/M.7275, 2015), where the Commission identified risks that, post-transaction, Novartis would have likely stopped the ongoing development of two innovative pipeline drugs for the treatment of skin and ovarian cancer. Similarly, in Pfizer/Hospira (COMP/M.7559, 2015), the Commission was concerned that, post-transaction, Pfizer would delay or discontinue the development of its own biosimilar of infliximab to focus on the marketing of Hospira’s biosimilar, which was already on the market, to the detriment of innovation and patient choice.

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?

In the pharmaceutical sector, as in any other sectors, merging parties can put forward efficiency arguments.

For the Commission to take into account such arguments, the parties need to demonstrate that the efficiencies benefit the consumers, are merger-specific and can be verified and quantified with a reasonable certainty.

In practice, the burden of proof is difficult to satisfy and the Commission will, in any case, not approve a transaction only on the basis of such efficiencies.

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 specific test applying to the pharmaceutical sector. As such, as in any other sector, the Commission will consider that a horizontal merger raises competitive concerns when the operation leads to significant overlaps between the parties and risk creating or reinforcing a dominant position. By way of example, in Teva/Allergan Generics (COMP/ M.7746, 2016), the transaction involved overlaps on a large number of molecules (marketed and in development) in several countries. The Commission’s investigation revealed that the combinations of the parties’ activities would have affected competition on prices in several EEA countries. In addition, the Commission found that in some member states the parties were among the largest generic players as well as each other’s closest competitors. Therefore, the Commission assessed the possible impact of the merger on prices not only for the overlapping products, but also took into account the parties’ overall portfolio of generic medicines.

Product overlap

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

See question 15.


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

The Commission has a preference for structural remedies, in particular divestitures, to address competition issues identified during its review. In the pharmaceutical sector, such remedies notably consist of divestiture of marketing authorisations, usually accompanied by licences of intellectual property rights, technology transfers as well as, depending on the circumstances, relevant assets, including plants or agreements with third-party manufacturers, etc.

In Novartis/GlaxoSmithKline Oncology Business, the transaction was authorised after Novartis committed to divest two of its cancer treatments (COMP/M.7275, Novartis/GlaxoSmithKline Oncology Business, 2015).

In Pfizer/Hospira, Pfizer offered the Commission a set of commitments consisting of the full divestment of the development, manufacturing and marketing rights of its infliximab, with regard to sterile injectable, the divestment of marketing authorisation and associated rights of Pfizer or Hospira in relation to the problematic molecules in several countries (COMP/M.7559, Pfizer/Hospira, 2015).

In Teva/Allergan Generics (see question 17), Teva offered to divest the following:

  • each of the molecules (marketed or in development) giving raise to competition concerns;
  • its portfolio of molecules (marketed or in development) in Iceland; and
  • the great majority of Allergan Generics’ business, including pipeline products in Ireland and the UK (COMP/ M.7746, Teva/Allergan Generics, 2016).

Anticompetitive agreements

Assessment framework

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

Article 101 of the TFEU prohibits agreements, decisions by associations of undertakings, and concerted practices that have the object or effect of preventing, restricting, or distorting competition within the internal market. This particularly includes agreements that directly or indirectly lead to price-fixing, market/customer sharing, limiting of production, innovation or investment, or imposing unfair commercial conditions on trading partners. Agreements or concerted practices can be exempted if they fulfil the conditions of article 101(3) of the TFEU, in other words, if they:

  • improve production/distribution of goods/services or technical/economic progress;
  • do not go beyond what is necessary for such improvement;
  • do not eliminate competition on a substantial part of the market; and
  • grant a fair share of the benefits to consumers.
Technology licensing agreements

To what extent are technology licensing agreements considered anticompetitive?

Technology transfer (TT) agreements are generally considered as pro-competitive under EU law. The framework for analysis is set forth in Regulation No. 316/2014 on the application of article 101(3) of the TFEU to categories of TT agreements (TTBER) and its corresponding guidelines. The TTBER provides a safe harbour for TT agreements provided that:

  • the market shares of the parties do not exceed 20 per cent (combined) when the agreement is concluded between competing undertakings, or 30 per cent (on their respective markets) when the parties do not compete; and
  • the agreement does not include any hardcore restriction (ie, price restrictions, market or customer allocation, restriction on the licensee’s ability to exploit its own technology, etc.)

R&D agreements and specialisation agreements are covered by specific exemptions under, respectively, Regulation No. 1217/2010 and Regulation No. 1218/2010.

Co-promotion and co-marketing agreements

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

Co-promotion (promotion of the same drug under the same brand by two different pharmaceutical companies) and co-marketing (promotion and sale of the same drug sold under two different brands by two different pharmaceutical companies) agreements fall within the wider category of commercialisation agreements. These types of agreements are very common in the pharmaceutical sector and generally considered as pro-competitive. For instance, the Commission found that an agreement between Pfizer and EISAI according to which Pfizer would discontinue its pipeline product and handle the production and marketing of EISAI’s own medicine, Aricept, could be exempted under article 101(3) of the TFEU (COMP/36.932, Pfizer/ESAI, 2000). However, co-promotion and co-marketing agreements may entail certain restrictions of competition, for example if they allow an anticompetitive exchange of commercially sensitive information between actual or potential competitors or if they are entered into with the disguised aim to delay market entry of a competing drug. Regarding the latter case, the Commission sanctioned a co-promotion agreement between Janssen-Cilag and Sandoz as in fact amounting to pay-for-delay (AT.39685, Janssen-Cilag/Sandoz, 2013). Sandoz had agreed not to launch a generic of Fentanyl on the market in exchange for a fee, covering a series of promotional activities; the Commission found that that the fee was not justified by the activities and largely exceeded the profits Sandoz could expect by entering the market. As a consequence, the Commission considered that the agreement restricted competition and fined the companies €16 million.

Other agreements

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

Any agreement or concerted practice with an actual or potential competitor involving an exchange of commercially sensitive information is likely to be found anticompetitive, as it will artificially increase transparency in the market and facilitate collusion. According to the Commission guidelines on horizontal cooperation agreements, an information is considered as commercially sensitive when it is strategic (prices, customers, R&D programmes, etc.), individualised, actual, not-public and covers a sufficiently large part of the market. 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 agreements are less likely to raise competition concerns. Regulation No. 330/2010 on the application of article 101(3) of the TFEU to categories of vertical agreements (VBER) provides for a safe harbour, as long as:

  • the parties are not competing undertaking and their respective market shares do not exceed 30 per cent;
  • the agreement does not include hardcore restrictions (resale price maintenance, market sharing, restriction on passive sales, etc).

When an agreement falls outside the safe harbour provided for by the VBER, it must be assessed according to the Commission’s guidelines on vertical restraints.

In the pharmaceutical sector, provisions aiming to prevent parallel trade, in particular, differentiated price systems or restrictions on sales, should be assessed carefully. The ECJ notably confirmed that restrictions to parallel trade infringe competition, although they may be exempted under article 101(3) of the TFEU if they produce sufficient efficiencies to outweigh the restriction (C-501/06 P, GSK, 2009).

Patent dispute settlements

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

Following its 2009 sector inquiry, the Commission identified some patent settlements as potentially anticompetitive; namely, the agreements concluded between potential competitors, limiting market entry of a generic and including a value transfer, (ie, pay-for-delay agreements). For instance, in the Lundbeck case, the Commission found that agreements between the originator and generic manufacturers of Citalopram, under which the generic manufacturers received money in exchange for staying out of the market, restricted competition by object (AT.39226, Citalopram, 2013). The assessment of the Commission was confirmed by the General Court (T-472/13, Lundbeck, 2016) and the case is currently pending before the ECJ. Similary, in Servier, the Commission fined Servier and several generic manufacturers for having entered into illegal pay-for-delay agreements. The General Court, however, partially annulled the Commission’s decision, notably with respect to one agreement between Servier and Krka where: (i) there was a genuine patent dispute; and (ii) the Commission did not demonstrate that the licence granted to Krka was not concluded at arm’s length (T-684/14, Krka, 2018).

Joint communications and lobbying

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

The prohibition laid down in article 101(1) of the TFEU also applies to associations of undertakings such as trade associations. For instance, the Commission fined the French Order of Pharmacists for imposing minimum resale prices on its members (AT.39510, Ordre national des pharmaciens, 2010). Intermediaries (brokers, trade association, lobbies, etc) can be sanctioned if they facilitate the setting up of a cartel, for instance by organising meetings or contributing to the dissemination of information, even if they are not themselves active on the relevant market (C-194/14 P, AC-Treuhand, 2015).

Public communications

To what extent may public communications constitute an infringement?

Public communication is normally not considered as anticompetitive but pharmaceutical companies must, however, be careful. In particular, communication of misleading information to health authorities, healthcare professionals and the public in general, in a context of scientific uncertainty, has recently been qualified by the ECJ as a restriction of competition by object (Case C-17916, Roche-Novartis, 2018).

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?

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 infringement of article 101 of the TFEU. 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 commercially confidential information. Similarly, the EFPIA Disclosure Code, which requires all EFPIA members to disclose transfer of value to healthcare professionals and healthcare organisations, allows aggregate disclosure when individual disclosure is not legally permitted. In practice, the Commission has never prosecuted a competition infringement related to disclosure obligations to HCPs and the general public.

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?

An undertaking holding a dominant position may only be sanctioned if it engages in abusive conduct within the meaning of article 102 of the TFEU. According to settled case law, the notion of ‘abuse’ refers to the capacity of the dominant firm to influence the structure of the market where, as a result of its very presence on such market, the degree of competition is already weakened, through recourse to methods different from those that govern competition on the merits. Different conducts may be considered as abusive. In the pharmaceutical sector more specifically, the Commission found that providing misleading representations with the aim of leading public authorities into error or requesting the deregistration of a marketing authorisation to prevent competition amounted to abusive conduct (ECJ, AstraZeneca v European Commission, 2012, Case C-457/10 P). The Commission is also currently investigating Aspen Pharma, which is suspected of having imposed excessive prices.

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?

With regard to market definition in abuse of dominance cases, in contrast with mergers, the Commission traditionally tends to define the relevant market at the level of the molecule (ATC5). However, the General Court recently held in the Servier case that, given the specificity of the pharmaceutical sector, where the drugs consumed by the patients are prescribed by healthcare professionals, non-price competitive factors play an important role and should be taken into account, in addition to price competition, when defining the relevant market for a drug (General Court, 12 December 2018, Servier SAS and Other v European Commission, Case T-691/14).

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?

As for other sectors, a pharmaceutical company will be found dominant if it has significant market shares, which enables it to act independently from its competitors, customers and ultimately consumers. In practice, establishing a dominant position requires to take into account various factors, including, but not limited to, the individual market share of the firm, its relative position compared to its competitors, the existence of barriers to entry, etc (see Communication from the Commission, ‘Guidance on the Commission’s enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings’, paragraph 12). With respect more particularly to IP rights, their mere possession is generally not sufficient to establish a dominant position. However, in some circumstances, it may lead to such a conclusion when it actually enables an undertaking to prevent effective competition on the market (Cases C-241/91 P and C-242/91 P, Magill, 1995, paragraphs 46 and 47).

Finally, three conditions need to be met to establish a collective dominant position (Case T-342/99, Airtours plc v European Commission, 2002):

  • each member of the oligopoly must know how the other members are behaving to be able to adopt the same policy;
  • the members of the oligopoly must be deterred over time from departing from the policy thus adopted; and
  • that policy must be able to defy challenge by actual or potential competitors or customers.
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?

It is only in exceptional circumstances that an application for the grant or enforcement of an IP right may be deemed to constitute abusive conduct. This will often be the case if such application is part of an overall anticompetitive strategy. For example, in AstraZeneca (Case C-457/10 P, AstraZeneca, 2002), the ECJ confirmed the Commission’s decision and the General Court ruling considering that the application made by AstraZeneca for a supplementary protection certificate amounted, in the case at hand, to an abuse of dominant position insofar as AstraZeneca had submitted false and misleading information to the patent offices of different member states and judicial authorities to unduly prolong its monopoly on the market and, as a consequence, prevent competition from generic manufacturers.

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

Life-cycle management strategies may be considered anticompetitive if they fall outside normal competition on the merits. In that respect, one of the conducts sanctioned in the AstraZeneca case was the withdrawal of the marketing authorisation for the reference product in some member states to delay the grant of authorisations for the marketing of generic products (Case C-457/10 P, AstraZeneca, 2002, paragraphs 123-124). Other anticompetitive strategies may include predatory pricing, exclusivity or loyalty rebates offered to customers (ie, hospitals, wholesalers or pharmacies) by the originator company when being confronted by a generic or biosimilar entry.


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

As already mentioned, the Commission and the European courts have already 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?

Yes. In that respect, according to article 82(1), second subparagraph of Regulation (EC) 726/2004, the same applicant can submit more than one application for the same medicinal product for co-marketing reasons in particular. Such behaviour may, however, be considered as anticompetitive if its object or effect is to prevent or delay generic or biosimilar entry.

Restrictions on off-label use

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

See questions 5 and 35.


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

There are two kinds of practices relating to pricing that, when implemented by a dominant undertaking, can amount to anticompetitive conduct: on the one hand, strategies involving low prices, either in the form of predatory pricing or loyalty rebates and, on the other hand, excessive pricing.

First, for a dominant firm, predatory pricing consists of setting its prices below its costs to eliminate, discipline or deter market entry by a competitor. It is generally considered that the dominant undertaking will be able to recoup its losses by raising its prices after having eliminated competition. In Akzo (ECJ, 1991, C-62/86), the ECJ held that, in order to determine whether a dominant firm has engaged in a predatory pricing strategy, a two-step test should be conducted:

  • first, if prices are set below average variable costs, they are presumed to be predatory, because they have no other economic rationale than to eliminate competitors; and
  • second, if prices are set below average total costs but above variable costs, some additional elements proving the predatory intention need to be established in order to qualify an abuse under article 102 of the TFEU.

In addition, anticompetitive conduct may also be found as a result of a rebate policy, if such policy, when implemented by a dominant firm, is found to have a loyalty-inducing effect, thereby amounting to foreclose access to customers by competing firms. To date, the Commission has never sanctioned a predatory pricing or anticompetitive rebates strategy in the pharmaceutical sector. However, cases exist at the national level where competition authorities have been confronted with such issues.

Second, excessive prices have recently come under the radar of the Commission and various national competition authorities, especially in the pharmaceutical sector. The standard test was first established in the United Brands case. This test consists of determining whether the difference between the costs incurred and the price actually charged is excessive, and, if the answer to this question is yes, whether the price was unfair either in itself or when compared with competing products (Case C-27/76, United Brands v Commission, 1978, paragraph 252). As already mentioned (see question 5), the Commission opened a formal investigation into Aspen Pharma to determine whether this company abused its market position by imposing high prices on oncological drugs.

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?

Specific features of the pharmaceutical sector may be put forward to justify conduct that might otherwise be considered as infringing articles 101 or 102 of the TFEU. For example, it is generally admitted that pharmaceutical companies may implement allocation systems to protect their own legitimate commercial interests, despite the fact that such systems entail a restriction on parallel trade. The ECJ held in that respect that a pharmaceutical company holding a dominant position on the market could, to protect its commercial interests, refuse to sell its drugs to wholesalers it suspected of being involved in parallel trade, if their orders were out of the ordinary (ECJ, Sot Lélos kai v GSK, 2008, C-468/06 to C-478/06).

However, public health or public safety considerations may not always work as an objective justification. For example, the recent ECJ judgment in the Roche/Novartis case concerning the off-label use of Avastin in the ophthalmic field illustrates the fact that compliance with regulatory obligations relating to pharmacovigilance and safety risks does not necessarily exclude the characterisation of an anticompetitive conduct (Case C-179/16, F Hoffmann-La Roche Ltd v AGCM, 2018).

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 pharmaceutical sector is carefully scrutinised by the Commission and European courts, with several ongoing investigations and pending cases before the courts. The main topic of attention is still pay-for-delay, with the judgments of the ECJ being expected in the Lundbeck and Servier cases respectively, together with a preliminary ruling in the Paroxetine case. The Paroxetine case was referred to the ECJ by the UK Competition Appeal Tribunal, which raised several questions relating to the assessment of potential competition, the existence of a restriction to competition by object or effect, as well as market definition and dominance in the context of pay-for-delay agreements involving notably GlaxoSmithKline. Future developments and guidance are also expected in the field of excessive pricing, with the issuance of the Commission’s decision in the Aspen case. Finally, it remains to be seen what position the Commission will adopt with respect to the introduction of a specific value of the transaction threshold in merger control, which may significantly impact future operations in the pharmaceutical sector.

The authors thank Sophie Pelé for her helpful contribution.