The Competition Bureau has discontinued its inquiry into whether Alcon Canada Inc. (Alcon) had engaged in anti-competitive conduct contrary to the abuse of dominance provision of the Competition Act (Act). The inquiry was examining whether Alcon was dominant in a relevant market and, if so, whether it had intentionally disrupted the supply of a prescription medication as part of a strategy to switch patients to a second generation formulation of the drug. This second generation drug has twice the concentration of the medical ingredient as the first and is protected under patent until 2022.
Following the initial supply disruption for the first generation product, Alcon’s sales returned to normal and generic competitors have entered the market and have captured significant market share from Alcon. Consumers and physicians are able to choose from the brand and generic first generation product, as well as the branded second generation product, and so the competitive dynamic appears to have been restored in the market.
As stated by the Competition Bureau, “[i]n the Bureau’s view, product life-cycle management strategies in the pharmaceutical sector are not inherently anti-competitive. In pro-competitive circumstances, such strategies may bring significant advancements in health care for the benefit of consumers, as well as drug companies. However, life-cycle management strategies that are designed to impede competition from generic drug companies, such as product switching strategies, may cause significant harm to competition. Strategies that include supply disruptions for the purpose of forcibly switching demand, including terminating, repurchasing or recalling market supply or any other attempt to frustrate supply of a product under patent challenge by potential generic drug competitors, are likely to raise concerns of an abuse of dominance.”
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