Pharmaceutical regulatory lawRegulatory framework and authorities
What is the applicable regulatory framework for the authorisation, pricing and marketing of pharmaceutical products, including generic drugs?
The authorisation, pricing and marketing of pharmaceutical products in Norway are governed by the Medicinal Products Act (Act 132 of 4 December 1992), along with a set of regulations, including the Medicinal Products Regulation (Regulation 1839 of 18 December 2009). The Medicinal Products Regulation provides detailed rules regarding marketing authorisation and the pricing of pharmaceutical products.
The Medicinal Products Act and the Medicinal Products Regulation are intended to implement the EU Medicines Directive (2001/83/EC) and the EU Transparency Directive (89/105/EEC), which form part of the EEA Agreement.Regulatory authorities
Which authorities are entrusted with enforcing these rules?
The day-to-day enforcement of the Medicinal Products Act, the Medicinal Products Regulation and other legislation relating to pharmaceutical products is entrusted to the Norwegian Medicines Agency (NoMA). The Ministry of Health and Care Services has administrative responsibility for this area at the government level and is the appeals body for NoMA decisions.The day-to-day enforcement of the Medicinal Products Act, the Medicinal Products Regulation and other legislation relating to pharmaceutical products is entrusted to the Norwegian Medicines Agency (NoMA). The Ministry of Health and Care Services has administrative responsibility for this area at the government level and is the appeals body for NoMA decisions.Pricing
Are drug prices subject to regulatory control?
Drug prices in Norway are subject to regulatory control in the form of maximum prices set by NoMA in accordance with Sections 12-1 to 12-20 of the Medicinal Products Regulation.
Prices are set on a comparison basis with prices in selected EEA states (Section 12-2 of the Medicinal Products Regulation) – namely:
- the Netherlands;
- Ireland; and
- the United Kingdom.
Consequently, any price changes in any of these countries (eg, due to patent expiry) will affect the maximum prices in Norway.
Maximum prices are subject to review at NoMA's own initiative or at the request of the manufacturer on an annual basis.
As a rule, NoMA must render its decision on maximum prices within 90 days of receiving an application to that effect.Distribution
Is the distribution of pharmaceutical products subject to a specific framework or legislation? Do the rules differ depending on the distribution channel?
The distribution of pharmaceutical products is subject to a regulatory framework which:
- applies to the import and wholesale of pharmaceutical products and sales to end users through pharmacies; and
- comprises rules on (for example) authorisations and marketing.
Certain non-prescription pharmaceuticals can be sold outside pharmacies (typically in grocery stores or online).Intersection with competition law
Which aspects of the regulatory framework are most directly relevant to the application of competition law to the pharmaceutical sector?
Several aspects of the regulatory framework applicable to Norway’s pharmaceutical sector are relevant to the application of competition law. For instance, a former price regulation system (not the maximum price system applicable today) triggered an investigation by the Norwegian Competition Authority (NCA) into potential vertical pricing issues in violation of Section 10 of the Competition Act. The case was eventually closed, but it demonstrated that government interference with the functioning of the market may potentially leave it more susceptible to competition law issues.
In early 2019, the NCA advised against a proposal from certain health politicians to make the net prices for pharmaceuticals that are negotiated between manufacturers and Norwegian health authorities available to the general public pursuant to the rules on transparency in the public sector. The NCA was concerned that price transparency would increase the risk of collusion between pharmaceutical manufacturers. The relevant parliamentary committee ultimately decided not to present the proposal to Parliament.
Competition legislation and regulationLegislation and enforcement authorities
What are the main competition law provisions and which authorities are responsible for enforcing them?
The Competition Act (Act 12 of 5 March 2004) applies to undertakings in the pharmaceutical sector. Section 10 of the Competition Act prohibits agreements between undertakings that restrict competition, while Section 11 prohibits any abuse by one or more undertakings of a dominant position, with no prior decision to that effect required.
Section 10 of the Competition Act mirrors Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the EEA Agreement, while Section 11 of the Competition Act mirrors Article 102 of the TFEU and Article 54 of the EEA Agreement. The case law of the European Court of Justice, the General Court, the European Commission, the European Free Trade Association (EFTA) Court and the EFTA Surveillance Authority which relates to these provisions is relevant when interpreting and enforcing Sections 10 and 11 of the Competition Act.
The Norwegian Competition Authority (NCA) is responsible for the day-to-day enforcement of the Competition Act.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 NCA holds the same power to tackle anti-competitive conduct or agreements in the pharmaceutical sector as in any other sector.
This includes the power to:
- conduct unannounced inspections (Section 25 of the Competition Act);
- impose remedies, including structural remedies (Section 12 of the Competition Act);
- impose administrative fines (Section 29 of the Competition Act); and
- impose periodic penalty payments (Section 28 of the Competition Act).
Breaches of the Competition Act can also lead to criminal fines and prison sentences (Section 32 of the Competition Act) if brought before a court by a public prosecutor. However, the Norwegian authorities have not resorted to criminal sanctions for violations of the Competition Act since it entered into force and are likely to do so only in rare situations.
The NCA has initiated antitrust investigations in the pharmaceutical sector in the past; however, no formal decisions have been issued.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?
Remedies can be sought through private enforcement by a party that claims to have suffered harm from anti-competitive conduct or agreements. A remedy would then take the form of a compensation claim. Such cases are brought before the ordinary courts. Cases of this kind have been brought in Norway, but they have not yet resulted in any court decisions.
The invalidity of contracts on competition law grounds is sometimes invoked before the courts, but the antitrust argument is typically only one among several and seldom receives comprehensive treatment in 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 NCA sometimes conducts sector-wide inquiries. In recent years, it has focused mainly on the grocery and retail fuel sectors. To date, the NCA has conducted no inquiries 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?
In general, the health authorities play no role in applying competition law in Norway. Neither the health authorities nor other health or pharmaceutical-related regulatory bodies have the competence to apply competition law in Norway.
In the case of an investigation of undertakings in the pharmaceutical sector, the health authorities might be consulted if they are presumed to be affected by the possible anti-competitive conduct. Their role in such a situation will then be similar to that of other customers.
However, in some instances the interaction has gone the other way. For example, in early 2019 the NCA advised against a proposal from certain health politicians to make the net prices for pharmaceuticals that are negotiated between manufacturers and Norwegian health authorities available to the general public pursuant to the rules on transparency in the public sector, due to concerns over the resulting increased risk of collusion between manufacturers.NGO involvement
To what extent do non-government groups play a role in the application of competition law to the pharmaceutical sector?
Generally, NGOs play no visible role in the case-by-case application of competition law in Norway; however, they are often involved in proposed legislative changes. For example, the Norwegian Association of Pharmaceutical Manufacturers successfully argued against the recent proposal to make the net prices for pharmaceuticals available to the general public pursuant to the rules on transparency in the public sector.
Review of mergersThresholds and triggers
What are the relevant thresholds for the review of mergers in the pharmaceutical sector?
Mergers and other concentrations in the pharmaceutical sector are subject to the same notification thresholds as other sectors. The Competition Act provides that, as a starting point, all concentrations must be notified; however, notification is not necessary if:
- the relevant undertakings have a combined yearly turnover in Norway of less than NKr1 billion (approximately €100 million); or
- only one of the involved undertakings has an annual turnover in Norway of more than NKr100 million (approximately €10 million).
In the pharmaceutical sector as in other sectors, the Norwegian Competition Authority (NCA) has the power to impose notifications on undertakings that fail to meet the notification thresholds if there is a sound reason to believe that competition will be affected (Section 18 of the Competition Act). The same rule applies to the acquisition of minority shares (Section 16a of the Competition Act).
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 will be subject to merger notification in the same circumstances as under EU and EEA law.
The NCA will analyse this in line with the European Commission's Consolidated Jurisdictional Notice (the Notice) and other relevant sources on the interpretation of EU law in this area. Consequently, under Paragraph 24 of the notice, for one or more patents or licences to be subject to merger filing requirements, they must constitute a business with a market presence to which a market turnover can be clearly attributed. As such, a transfer of licences for brands, patents or copyrights without additional assets can be considered a notifiable concentration only if the licences are exclusive and the transfer will also transfer the turnover-generating activities.Market definition
How are the product and geographic markets typically defined in the pharmaceutical sector?
Since the Competition Act entered into force in 2004, the NCA has registered 14 notifications in the pharmaceutical sector. All of these have been approved; however, the NCA has issued no formal decision elaborating on the reasons for approval. Further, the NCA has issued no authoritative opinion on how the relevant product and geographic markets in the pharmaceutical sector should be defined.
In general, the NCA refers to the market definition principles developed by the European Commission in pharmaceutical sector cases. As such, it can be expected that when defining the relevant product market, the NCA will look not only at Anatomical Therapeutic Chemical (ATC) classifications, but also at available treatment alternatives irrespective of the ATC group.
Due to the regulatory framework – including the maximum price regulation and Norwegian public authorities' role in the financing and sourcing of medicines used by public hospitals and long-term patients – the relevant market for medicines will in most circumstances be defined as being 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?
Since the Competition Act entered into force in 2004, the NCA has issued no formal decision relating to mergers in the pharmaceutical sector; however, as in other sectors, the NCA can be expected to take into account the specific characteristics of the pharmaceuticals market when analysing a merger’s effect on competition.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?
Norwegian merger control recognises efficiency-based arguments, including the strengthening of R&D activities. If the NCA considers that a merger will trigger serious antitrust concerns from the outset, the chances for rebutting that finding by advancing efficiency-based arguments are normally slim, since the NCA requires convincing and quantitative evidence for the alleged efficiencies and has a high threshold for accepting such efficiencies as sufficient. However, efficiency arguments can be helpful in cases that give rise to less serious antitrust concerns.Horizontal mergers
Under which circumstances will a horizontal merger of companies currently active in the same product and geographical markets be considered problematic?
The NCA will prohibit concentrations that will significantly impede effective competition, particularly as a result of the creation or strengthening of a dominant position (Section 16 of the Competition Act).
This is determined on a case-by-case basis, where relevant factors include:
- the parties’ market share;
- closeness of competition;
- market structure; and
- potential competition, including the existence of pipeline products.
In appropriate cases, the NCA may run price pressure tests to quantify the likely effect of the merger.Product overlap
When is an overlap with respect to products that are being developed likely to be problematic? How is potential competition assessed?
The NCA will assess the effects of a merger on the merits in each case. In a sector driven by innovation and product advancement, the existence of pipeline products will generally be relevant in a competitive analysis. As such, the NCA can be expected to consider whether pipeline products are likely to trigger additional competition concerns or remedy any concerns arising from the merger. The existence of pipeline products will be particularly relevant if a product launch is imminent. Since the NCA has yet to issue any formal decisions regarding mergers in the pharmaceutical sector, its concrete approach to pipeline products remains to be seen.Remedies
Which remedies will typically be required to resolve any issues that have been identified?
Norwegian merger control law allows for the use of remedies to resolve competition concerns arising from a merger. The NCA typically prefers structural remedies, including divestment of patents or licences.
Anticompetitive agreementsAssessment framework
What is the general framework for assessing whether an agreement or concerted practice can be considered anticompetitive?
Section 10 of the Competition Act mirrors Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the EEA Agreement. In practice, the case law of the European Court of Justice, the General Court, the European Commission, the European Free Trade Association (EFTA) Court and the EFTA Surveillance Authority relating to these provisions is relevant when enforcing Section 10 of the Competition Act. While the Norwegian Competition Authority (NCA) has yet to issue guidelines on the application of Section 10 of the Competition Act, it has published guidelines on project cooperation.Technology licensing agreements
To what extent are technology licensing agreements considered anticompetitive?
Technology licensing agreements will typically be considered anti-competitive if they involve cooperation on prices or market sharing. Technology licensing agreements between non-competitors will be viewed more favourably than similar agreements between competitors, and potential competition concerns increase with increasing market shares.
A block exemption regulation for technology transfer agreements has been adopted to exempt agreements from Section 10 of the Competition Act if they satisfy the criteria set out by that regulation. Norwegian block exemptions normally mirror the corresponding EU and EEA framework in place at any given time. However, the Norwegian block exemption for technology transfer agreements has not yet been updated to reflect EU Regulation 316/2014/EC and still reflects EU Regulation 772/2004/EC.
The NCA has not issued its own guidelines on the application of Section 10 on technology licensing agreements. In practice, the European Commission's guidelines and case law from the European Commission, the European Courts, the EFTA Surveillance Authority and the EFTA Court will be relevant in the interpretation and application of Section 10 to technology licensing agreements.Co-promotion and co-marketing agreements
To what extent are co-promotion and co-marketing agreements considered anticompetitive?
Co-promotion and co-marketing agreements between competitors may have anti-competitive effects. Potential competition concerns increase with increasing market shares. The NCA has not issued its own guidelines on the application of Section 10 of the Competition Act to co-promotion or co-marketing agreements. In practice, the European Commission's guidelines and case law from the European Commission, the European courts, the EFTA Surveillance Authority and the EFTA Court will be relevant in the interpretation and application of Section 10 to such agreements.Other agreements
What other forms of agreement with a competitor are likely to be an issue? How can these issues be resolved?
In general, all agreements that have an impact on actual or potential competition between parties or affect the competitive position of third parties may potentially be an issue under Section 10 of the Competition Act. Examples include production agreements between competitors and R&D agreements. For as long as such agreements on the balance are pro-competitive, they will be permissible. Confidentiality provisions and access restrictions may in appropriate cases be necessary or helpful to resolve competition concerns.Issues with vertical agreements
Which aspects of vertical agreements are most likely to raise antitrust concerns?
A block exemption regulation for vertical agreements has been adopted to exempt agreements from Section 10 of the Competition Act if they satisfy the criteria set out by that regulation. The regulation reflects the EU Block Exemption Regulation on Vertical Restraints (330/2010). Consequently, vertical agreements between non-competitors will normally be exempt from Section 10 provided that the parties do not have market shares exceeding 30%, with the exception of agreements that have as their object certain hardcore restrictions identified in Section 4 of the Norwegian regulation which corresponds to Article 4 of the EU Block Exemption Regulation on Vertical Restraints (eg, resale price maintenance, market and customer sharing and certain restrictions within selective distribution systems).
The European Commission's guidelines and case law from the European Commission, the European courts, the EFTA Surveillance Authority and the EFTA Court will be relevant in the interpretation and application of Section 10 of the Competition Act in regard to vertical agreements.Patent dispute settlements
To what extent can the settlement of a patent dispute expose the parties concerned to liability for an antitrust violation?
The NCA is likely to analyse patent dispute settlements having regard to Section 4.3 of the European Commission's guidelines on technology transfer agreements. In this regard it will likely consider whether the settlement agreement is a legitimate way to secure a mutually acceptable compromise in a genuine legal disagreement or whether it arises from an anti-competitive objective. The NCA is also likely to scrutinise whether the settlement contains individual terms that go beyond what is objectively necessary to achieve the intended purpose.Joint communications and lobbying
To what extent can joint communications or lobbying actions be anticompetitive?
Joint communications or lobbying activities will in practice rarely fall within the ambit of Section 10 of the Competition Act if they relate to laws or policies. However, if such activities result in the exchange of sensitive commercial information or the alignment of market strategies or otherwise affect the market conduct of two or more undertakings, Section 10 may come into play.
For example, in 2002 the NCA reported two participants in a trade association to the prosecutor for financial crime on allegations of violation of the prohibition against price fixing that applied at the time (the Competition Act did not enter into force until 2004). The two undertakings were the only players on the mill market in Norway at the time and, through their trade association, had given feedback to the authorities on a prospective regulatory change that they argued would lead to higher prices. The authorities nevertheless adopted the change and shortly thereafter both members of the trade association introduced higher prices. The two companies accepted a fine from the prosecutor.Public communications
To what extent may public communications constitute an infringement?
Like the European Commission, the NCA has taken an interest in the potential anti-competitive effect of public statements. After a sector inquiry into the financial sector several years ago, the NCA made it clear that banks' public statements about future changes to their interest rates may be problematic under the Competition Act, but no individual cases were investigated on this basis. The NCA is likely to be similarly sceptical towards public communications in other sectors.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?
In general, increased transparency in a sector may increase the risk of anti-competitive exchanges of information.
In early 2019, the NCA advised against a proposal from certain health politicians to make the net prices for pharmaceuticals negotiated between manufacturers and Norwegian health authorities available to the general public pursuant to the rules on transparency in the public sector, due to concerns over the resulting increased risk of collusion between manufacturers.
Anticompetitive unilateral conductAbuse of dominance
In what circumstances is conduct considered to be anticompetitive if carried out by a firm with monopoly or market power?
Section 11 of the Competition Act mirrors Article 102 of the Treaty on the Functioning of the European Union (TFEU) and Article 54 of the EEA Agreement and prohibits the abuse of an undertaking's dominant position. The Competition Act provides no definition of abuse, but mentions the same examples as the corresponding TFEU and EEA prohibitions – namely:
- setting unreasonable purchase or sales prices or other unreasonable business terms;
- limiting production, output or technical development to the disadvantage of consumers;
- imposing different terms for equivalent goods or services and therewith disadvantaging competition; and
- tying and bundling.
In practice, all exclusionary and exploitative market behaviour by a dominant market player may fall foul of Section 11 of the Competition Act in the same manner as under Article 102 of the TFEU and Article 54 of the EEA Agreement.De minimis thresholds
Is there any de minimis threshold for a conduct to be found abusive?
There is no formal de minimis threshold for conduct to be found abusive pursuant to Section 11 of the Competition Act. Based on statements in the preparatory works to the act regarding the importance of competition in local and niche markets, the Norwegian Competition Authority (NCA) has previously applied the act in small and local markets on occasion.
However, like EU and EEA competition law, Norwegian competition law takes an effect-based approach to whether conduct is considered abusive. Further, the European Commission's rules on enforcement priorities set out in Article 102 of the TFEU are used as guidelines when applying Article 11 of the Competition Act.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?
There is no practice from Norway addressing this issue. In general, investigations of alleged abusive conduct focus on the effects that the abuse has had from the time that it occurred until the present, while analysis in the context of a merger investigation will take a more prospective approach and focus on likely future effects in the market.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?
Dominance for the purpose of Section 11 of the Competition Act is established on a case-by-case basis. Market shares are generally considered a good proxy for whether dominance can be established but are not decisive. Dominance will be less likely if the undertaking has a market share of less than 40% and is presumed if its market share exceeds 50%.
Patent owners may sometimes be dominant based on a patent alone. The fact that ownership of a patent can result in dominance is presupposed in the system of compulsory licences pursuant to the Patent Act, under which the NCA can order a patent owner to grant licences to a third party if certain conditions are fulfilled. The preparatory works of these provisions suggest that the rules on abuse of dominance in Section 11 of the Competition Act can apply to patent owners simply on account of the patent, but only in special circumstances.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?
As in the European Union, a patent application filed in bad faith can expose the patent owner to liability for an antitrust violation. Strategies such as misleading patent offices and legal steps in bad faith in order to keep competitors out can amount to a violation of Section 11 of the Competition Act.
When would life-cycle management strategies expose a patent owner to antitrust liability?
In general, a good-faith life-cycle business strategy should not amount to abuse of a dominant position in violation of Section 11 of the Competition Act. However, the NCA will consider each case on the merits. Relevant factors in the assessment may be whether available evidence supports that the management strategy was made in good faith and that pricing decisions reflect a reasonable business plan covering the life-cycle of the product in question.Communications
Can communications or recommendations aimed at the public, HCPs or health authorities trigger antitrust liability?
Communications or recommendations aimed at the public, healthcare professionals or health authorities may trigger antitrust liability. This may be the case (for example) if a patent owner seeks to dissuade patients, HCPs or authorities from switching to a generic on expiry of the patent.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?
As far as is known, this issue has not been considered by the NCA. In general, discriminating between different market players or taking steps to marginalise future competition may constitute abuse under Section 11 of the Competition Act. However, this must be balanced against the patent owner's right to take steps to protect its legitimate business interests and the fact that competition law does not exist to protect free riding.Restrictions on off-label use
Can actions taken by a patent owner to limit off-label use trigger antitrust liability?
As far as is known, this issue has not been addressed by the NCA. In general, factually and legally correct objections made in good faith by a patent owner regarding the legality of and risks associated with off-label use of its patented drug should not be viewed as abuse under Section 11 of the Competition Act.Pricing
When does pricing conduct raise antitrust risks? Can high prices be abusive?
Low prices may fall foul of Section 11 of the Competition Act to the same extent as under Article 102 of the TFEU and Article 54 of the EEA Agreement. As pharmaceuticals are subject to maximum prices established by the Norwegian state, abusively high prices are not a practical issue in the Norwegian pharmaceutical sector.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?
In general, it is unlikely that safety concerns or other specific features of the pharmaceutical sector can amount to an objective justification for conduct that would otherwise infringe antitrust rules. In line with European Court of Justice case law, the NCA is likely to take the view that it is up to the legislature or the Norwegian Medicines Agency – and not a private market player – to ensure that such objectives or concerns are addressed.
Update and trendsCurrent trends and developments
40Are there in your jurisdiction any emerging trends or hot topics regarding antitrust regulation and enforcement in the pharmaceutical sector?
There are no emerging trends or hot topics regarding antitrust regulation and enforcement in the pharmaceutical sector in Norway. In early 2019 a proposal from certain health politicians to make the net prices for pharmaceuticals that are negotiated between manufacturers and Norwegian health authorities available to the general public pursuant to the rules on transparency in the public sector failed to get through the relevant parliamentary committee. While there were several reasons for this failure, in the committee's oral hearing regarding the proposal, the Norwegian Competition Authority notably warned against such transparency due to concerns over the increased risk of collusion between manufacturers.