Pharmaceutical regulatory law
Regulatory framework and authorities
Which legislation sets out the regulatory framework for the marketing, authorisation and pricing of pharmaceutical products, including generic drugs? Which bodies are entrusted with enforcing these rules?
The main rules that set out such regulatory framework, mainly for marketing and authorisation of pharmaceutical products, are contained in the Medicines Act, approved by Decree-Law No. 176/2006 of 30 August 2006, as republished by Decree-Law No. 128/2013 of 5 September 2013 and further amended by Law No. 51/2014, of 25 August 2014.
Decree-Law No. 97/2015 of 1 July 2015 (which has been amended and republished by Decree-Law No. 115/2017 of 7 September 2017) created the National System for Health Technologies Assessment, which establishes rules concerning matters such as pricing and reimbursement. Such rules are complemented by the Ministerial Orders Nos. 195-A/2015, 195-B/2015, 195-C/2015, the application of which has been partially suspended for 2018, and 195-D/2015, all of 30 June 2015. There are also separate orders that regulate the reimbursement of medicines for specific diseases (such as Ministerial Order No. 330/2016 for MS) and medical devices (such as Ministerial Order No. 35/2016 for test strips).
These rules list the reference countries used to determine the prices of medicines in Portugal for 2018, and these are determined by Ministerial Order No. 359/2017 of 20 November 2017 (rectified by the Rectification statement No. 45/2017 of 22 December 2017).
The National Authority of Medicines and Health Products’ (Infarmed) Regulation, approved by its Resolution No. 873/2013 of 6 March 2013, regulates the authorisation, manufacture, distribution and sale of allergen drugs destined for specific patients.
Decree-Law No. 102/2007 of 2 April 2007 not only establishes good clinical practices rules, but also the specific conditions applicable to the manufacturing or importing of such products.
Infarmed is the entity that regulates and is in charge of the supervision of matters related to pharmaceutical products and devices, and is responsible for the enforcement of the applicable rules.
Are drug prices subject to regulatory control?
The price of medicines (generic or not) subject to prescription and the price of the medicines co-paid by the state is heavily regulated in Portugal and these have a maximum value that is dependent on the price of such medicines in the reference countries. The retail price of medicines may not exceed the average wholesaler price of the reference countries. For generic medicines, the price may not exceed a certain percentage of the retail price of the reference medicinal product. This percentage is established by ministerial orders.
The list of reference countries is updated every year. The 2018 list has been approved by Ministerial Order No. 359/2017 (rectified by Rectification statement No. 45/2017) and this is applicable for both generic and non-generic medicines. The reference countries for 2018 are France, Italy and Spain.
Decree-Law No. 97/2015 sets forth the general rules on how to calculate the price of medicines. Ministerial Order No. 195-C/2015, updated by article 2 of Ministerial Order No. 290-A/2016 of 15 November 2016, contains the specific rules and procedures applicable to the formation of medicine prices and annual review of prices, as well as the respective deadlines.
Although there are different rules applicable to the formation of prices for medicines to be bought by entities pertaining to the National Health System, these are foreseen in the same Decree-Law and Ministerial Order.
Informative Notice No. 150/CD/100.20.200 establishes the rules on annual revision of prices for 2018.
Informative Notice No. 171/CD/100.20.200 establishes the rules on the annual revision of prices of generic medicines for 2018.
Is there specific legislation on the distribution of pharmaceutical products?
The Medicines Act contains all the legal rules pertaining to the distribution of pharmaceutical products.
Intersection with competition law
Which aspects of this legislation are most directly relevant to the application of competition law to the pharmaceutical sector?
The rules on parallel trade, authorisation and direct purchase of medicines, advertising and formation of prices are those that are most relevant.
Competition legislation and regulation
Which legislation sets out competition law?
Apart from EU legislation, which is also applicable in Portugal, the national legislation that sets out competition law is Law No. 19/2012 of 8 May (the Competition Legal Regime).
The Leniency Programme is regulated by Regulation No. 1/2013 issued by the Portuguese Competition Authority (AdC).
Other relevant legislation that does not set out competition law but is also applicable is:
- Decree-Law No. 433/82 of 27 October 1982 (that approves the general regime on administrative offences), applicable, on a subsidiary basis, to the administrative procedure on anticompetitive agreements, decisions and practices, and to the judicial review of sanctioning decisions; and
- the Code of Administrative Procedure, since the general principles for administrative action are also applicable to sanctioning procedures under the Competition Legal Regime.
Which authorities investigate and decide on pharmaceutical mergers and the anticompetitive nature of conduct or agreements in the pharmaceutical sector?
Although Infarmed is the entity that regulates the pharmaceutical sector, the competent authority to investigate and decide on pharmaceutical mergers as well as the anticompetitive effect of conduct or agreements in the pharmaceutical sector is the AdC. It is the AdC’s mission to ensure the enforcement of competition rules in Portugal. Therefore, if Infarmed is aware of a potential breach of competition rules, it must forward the matter to the AdC for analysis and further follow-up. The AdC should ask the opinion of Infarmed before taking any action.
Decisions of the AdC are subject to appeal to the Competition, Regulation and Supervision Court.
What remedies can competition authorities impose for anticompetitive conduct or agreements by pharmaceutical companies?
The AdC may impose any structural or behavioural measures it deems necessary to cease the restriction of competition or its effects on pharmaceutical companies involved in anticompetitive practices. Structural measures can only be imposed when there is no behavioural measure that would be equally effective or, should it exist, would be more onerous for the party concerned than the structural measures themselves.
For example, the AdC may declare void certain rules or clauses included in the agreements that are deemed to be anticompetitive, or even declare that the agreement as a whole is contrary to competition rules and declare the cessation of its effects.
During an eventual investigation, if the AdC believes that the practice under investigation may cause serious and irreparable or hardly reparable damages then, after requesting the opinion of Infarmed, it may order the suspension of such practice or any other measures that could reinstate competition or that are indispensable for the final decision to have a useful effect.
Whenever the AdC concludes that there are circumstances or behaviour that affect competition in the markets or economic sectors analysed, such as the pharmaceutical sector, and after it has identified the circumstances in the market or the behaviour of undertakings or associations of undertakings that affect competition, and to what extent, it must decide on which behavioural or structural measures it considers appropriate to prevent, remove or offset the effects. The relevant report is then sent to Infarmed. Furthermore, the AdC may recommend the application of behavioural or structural measures considered appropriate to restore or ensure competition in the market. Depending on the case, the recommendations may be submitted to the government and Infarmed or to the government and other entities (where what affects competition does not arise from pharmaceutical laws and regulations).
In case of breach of competition laws, the AdC may also apply fines of up to 10 per cent of the turnover of the concerned party or, in the case of an association of undertakings, of the aggregate turnover of its members, and the following sanctions:
- publication in the Official Journal of the Portuguese Republic and in a national, regional or local newspaper with a large circulation, according to the relevant geographical market, at the expense of the party concerned, with an extract of the decision imposing a sanction; and
- a ban of up to two years on the right to take part in public tenders, in those cases where the practice that has led to an administrative offence punishable with a fine has occurred during or because of such procedures.
The AdC may also apply a periodic penalty payment when a decision applying a sanction or imposing the adoption of certain measures is not complied with. Such penalty may not be higher than 5 per cent of the average daily turnover in the year immediately before the decision, per day of late payment.
Private actions and remedies
Can private parties obtain competition-related remedies if they suffer harm from anticompetitive conduct or agreements by pharmaceutical companies? What form would such remedies typically take and how can they be obtained?
Private parties may report situations believed to be in breach of competition rules to the AdC or Infarmed and require that certain remedies are applied.
However, to be indemnified from the damages arising from the anticompetitive conduct or agreements by pharmaceutical companies one can, preferably based on a decision of the AdC acknowledging the same, file the competent judicial lawsuit, although the court would not be bound by such decision and would freely evaluate the evidence produced. It is also possible to file a class action aimed at protecting consumers’ interests that are harmed by the anticompetitive conduct or agreement. The class action can be used to prevent or cease the anticompetitive conduct or agreements.
Considering that a decision, particularly a judicial decision, may take a long time to be issued, a private party could file precautionary proceedings in order to obtain a protective order of its interests. Such protective order could, for example, be the suspension of the execution of the agreement or the prohibition to pursue certain conduct.
May 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?
Yes, the AdC may conduct such inquiries. In fact, the performance of economic surveys represents a significant part of the AdC’s activities since they are used to supervise and monitor the markets and they allow the AdC to verify any circumstances that may indicate distortion or restriction of competition.
When the AdC concludes that there are particular circumstances or behaviour that affect competition in the markets or economic sectors analysed, such as the pharmaceutical sector, it should immediately inform the sector’s regulatory authority, in this case Infarmed, of the issue, so as to allow it to issue an opinion within the time limit stipulated by the AdC.
Otherwise, the AdC requests a non-binding opinion to Infarmed before it issues its conclusions regarding the market study and inquiries in the pharmaceutical sector.
The last market analysis the AdC made of the pharmaceutical sector was the ‘Framework of the Pharmaceutical Activity’ in 2007, which was issued following the participation in a colloquium organised by the parliament’s Health Commission, which it summarises. This document was preceded by another market study carried out in 2005, regarding the competitive situation in the pharmacies sector.
The Framework of the Pharmaceutical Activity study identifies five types of restrictions to competition arising from the legislation applicable to pharmacies:
- restrictions to entry into the market;
- reserved activities;
- structure-related restrictions;
- pricing restrictions; and
- advertising restrictions.
Most of the restrictions identified by the AdC were taken into consideration by the government and the AdC’s recommendations are reflected in the new regime of pharmacies issued in 2011.
To what extent do non-government groups play a role in the application of competition rules to the pharmaceutical sector?
Trade associations and other private organisations (such as law firms) are consulted prior to the approval of new competition rules - this was the case prior to the approval in 2012 of the new Competition Legal Regime that replaced the former Competition Act.
Like other entities and individuals, NGOs, trade associations and consumer groups may report situations that they consider to be in breach of competition law. Such reports are then investigated by the AdC. The AdC is obliged to register all claims received.
As referred to in question 8, it is also possible for such organisations to file class actions when aimed at defending consumers’ interests.
The trade association that plays the major role in the application of competition rules to the pharmaceutical sector is the Pharmaceutical Industry Association known as Apifarma (which is itself a member of the International Federation of Pharmaceutical Manufacturers & Associations).
Apifarma was founded in 1975 and represents more than 120 companies in the pharmaceutical sector. It has its own code of ethics. Many of the issues affecting the pharmaceutical industry are discussed by state bodies with Apifarma instead of with the companies.
As for pharmacies, their trade association, the National Association of Pharmacies, is also an important player in this sector.
Review of mergers
Are the sector-specific features of the pharmaceutical industry taken into account when mergers between two pharmaceutical companies are being reviewed?
So far, the AdC has hardly opposed any mergers between two pharmaceutical companies. Since the AdC has a significant track record on these matters, it is aware of the sector-specific features of such cases.
Generally speaking, the AdC has decided not to oppose the mergers of which it was notified because it considered that they did not create or reinforce a dominant position that would cause barriers to effective competition in the identified relevant markets.
How are product and geographic markets typically defined in the pharmaceutical sector?
The geographic market defined by the AdC, following the practice of the European Commission, is generally the national market, although there may be situations where the relevant geographical market could be one of the Portuguese autonomous regions specifically for the cases of mergers in the wholesale sector as, for example, in case No. 17/2010, Alliance Healthcare/Medimadeira, Funchalfar.
The product markets are defined regarding the type of medicine: subject or to not to prescription (ie, over-the-counter); co-paid by the state or not; and type of substance according to the anatomical therapeutic chemical (ATC) classification system, by activity (wholesale, logistic services, equipment or manufacture of medicines). Following the practice of the European Commission, generics are not deemed a relevant market.
In case No. 72/2005, Actavis/Alpharma, the AdC follows the practice of the European Commission, as in other cases, and applies the ATC to help define the relevant market. Normally the third level of the ATC code is sufficient as a starting point to define the relevant market. However, the AdC has specifically stated that sometimes the markets must be defined according to other levels, or it may be necessary to subdivide the ATC3 categories based on other criteria related to the demand of the medicines or to include in the same relevant market products that belong to other ATC3 categories, in particular when the products are considered substitutes by demand.
In fact, in other cases, such as cases Nos. 54/2008, CSL Limited/Talecris and 36/2010, Bausch & Lomb/Activos Novartis, the AdC has taken into consideration the ATC4 and ATC5 levels to define the relevant market.
In case No. 12/2012, Omega Pharma/GlaxoSmithKline (GSK) Assets, the AdC followed the International Consumer Health Classification, in this case the OTC3 level, as suggested by Omega Pharma, since the GSK assets that were to be acquired by the latter regarded mostly over-the-counter medicines and the substitutability between the administration methods is limited.
Addressing competition concerns
Is it possible to invoke before the authorities the strengthening of the local or regional research and development activities or efficiency-based arguments to address antitrust concerns?
There are cases where generally prohibited practices may be justified. Arguments such as the strengthening of the local or regional research and development activities or efficiency-based arguments can be used to justify certain type of agreements, concerted practices or decisions of associations of undertakings that otherwise would be illegal if they contribute to improving production or distribution of goods or services or promote technical or economic progress. Furthermore, in order for such arguments to proceed, they must:
- allow the users of these goods or services an equitable part of the resulting benefit;
- not impose on the undertakings concerned any restrictions that are not indispensable to the attainment of these objectives; and
- not afford such undertakings the possibility of eliminating competition from a substantial part of the market for the goods or services at issue.
Under which circumstances will a horizontal merger of companies currently active in the same product and geographical market be considered problematic?
A horizontal merger of companies active in the same product and geographical market may be considered problematic when it affects competition by changing the structure of the markets, in particular, when the market share resulting from the merger is significant and can originate in a monopoly or a dominant position.
On the contrary, if there is only a slight overlap in the activity of the merging companies that does not affect the market structure, the AdC does not consider the merger problematic (see case No. 06/2010, Cephalon/Mepha, where there was a small overlap in only one category of medicines and the market structure was not affected by a higher market share).
In the pharmaceutical sector there has not been a significant product overlap that would affect competition, but the AdC can take into consideration the actual or potential loss of competition.
When is an overlap with respect to products that are being developed likely to be problematic? How is potential competition assessed?
The AdC also assesses the potential effects from the perspective of future pharmaceutical products, as does the European Commission (case No. 31/2003, IDEC Pharmaceuticals Corporation/Biogen Inc, where the AdC quoted case No. IV/M 737, Ciba-Geigy/Sandoz, although in the end it did not consider it to be an overlap).
Therefore, if in a merger, one of the merging companies is developing products, these are also taken into consideration for determining the relevant market and whether there is an overlap of products or not. This was the case in the acquisition of OE Holding SA by Recordati SA Chemical and Pharmaceutical Company (case No. 68/2007, Recordati/Orphan Europe), where the AdC not only took into consideration the market of the existing orphan medicines but also the market of the orphan medicines that were being developed by Orphan Europe. In the end, the AdC considered that there was no change in the structure of the market, since there was only a change of the holder of the market share.
This means that the overlap with respect to products that are being developed is treated similarly to an overlap with existing products.
Which remedies will typically be required to resolve any issues that have been identified?
The remedies are assessed on a case-by-case basis according to the AdC Guidelines on the Adoption of Remedies. These remedies are first proposed by the involved parties and then assessed by the AdC, which will determine whether they are sufficient to eliminate obstacles to an effectively competitive market.
The Guidelines identify two major groups of remedies: structural remedies and behavioural remedies. Generally, structural remedies correspond to the sale of assets (such as licences or trademarks) or groups of assets, including companies or production units.
Behavioural remedies include those that promote or reinforce competition, such as:
- limits on the parties’ actions during the operation (eg, not requiring a certain licence, or not exploiting its own assets);
- measures to attenuate the client’s costs with the change in the merger operation (eg, no customer loyalty schemes); and
- reduction of the use of exclusive agreements or long duration agreements in the sales of the parties involved in the merger.
However, to date, mergers in the pharmaceutical sector have been authorised without any remedies being required. In case No. 44/2003, Dräger Medical AG &Co/Negócio de Termoterapia da Hillenbrand (Hill-Rom Air-Shields), where the concerned activity is close to the pharmaceutical sector (it concerns neonatal medical equipment), the AdC considered that there would be a significant increase in the market share arising from the merger, affecting the competition structure in Portugal (the second player would be acquiring the market leader). In order to minimise such effects and ensure a competitive market, the AdC authorised the merger, subject to the following five conditions:
- maintaining a second distribution channel for three years;
- maintaining non-discriminatory conditions for three years;
- maintaining a certain type of product as long as there is demand for it in the following three years;
- no direct sale in Portugal for three years; and
- maintaining spare parts for seven years from the production of the last device.
Patents and licences
Would the acquisition of one or more patents or licences be subject to merger reporting requirements? If so, when would that be the case?
The acquisition of one or more patents or licences can be subject to reporting requirements, since for the purpose of merger reporting there is a merger (a concentration) when a change of control in the whole or part of one or more undertakings occurs on a lasting basis as a result of, among other things, the acquisition, directly or indirectly, of the whole or part of the assets of one or various other undertakings (including patents or licences). Such change of control results from any act implying the possibility of exercising a decisive influence over the activity of an undertaking on a lasting basis, whether solely or jointly, taking into account, for example, the acquisition of ownership rights, or rights to use the whole or a part of the assets of an undertaking.
The acquisition of one or more patents or licences must be reported if it would result in the acquisition, creation or reinforcement of a market share superior or equivalent to 50 per cent of the domestic market in a specific product or service, or in a substantial part of it; or a market share superior or equivalent to 30 per cent but smaller than 50 per cent of the domestic market in a specific product or service, or in a substantial part of it where the individual turnover in Portugal in the previous financial year, by at least two of the undertakings involved in the transfer of the patents or licences, is valued at greater than €5 million, net of taxes directly related to the turnover.
The acquisition would also be subject to reporting when the turnover of the involved undertakings has reached an aggregate turnover in the previous financial year greater than €100 million, net of taxes directly related to such a turnover, as long as the turnover in Portugal of at least two of these undertakings is above €5 million.
What is the general framework for assessing whether an agreement or practice can be considered anticompetitive?
Articles 9 and 10 of the Competition Legal Regime provide, in line with article 101 of the Treaty on the Functioning of the European Union, the general framework for assessing whether an agreement or practice can be considered anticompetitive.
Any agreement or practice having as its object or effect the prevention, distortion or restriction of competition in the domestic market, in whole or in part, and to a considerable extent, is deemed anticompetitive and therefore prohibited, in particular any that:
- directly or indirectly fix purchase or selling prices or any other trading conditions;
- limit or control production, markets, technological development or investment;
- share markets or sources of supply;
- apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; or
- make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations that, by their nature or according to commercial usage, have no connection with the subject of such contracts.
Technology licensing agreements
To what extent are technology licensing agreements considered anticompetitive?
There are no guidelines or specific provisions regarding licensing agreements and European regulations are applicable.
Co-promotion and co-marketing agreements
To what extent are co-promotion and co-marketing agreements considered anticompetitive?
There are no guidelines or specific provisions regarding co-promotion and co-marketing agreements and European regulations and guidelines are applicable.
What other forms of agreement with a competitor are likely to be an issue? Can these issues be resolved by appropriate confidentiality provisions?
The agreements that are likely to be an issue normally relate to the pre-determination of prices by pharmaceutical companies, the sharing of sources of supply or other types of restrictions to the production or development of medicines. However, any agreement that directly or indirectly prevents, distorts or restricts competition is not allowed. Confidentiality provisions would probably not resolve the issue, since in the end, the effect of such agreements on the market will determine whether free competition is affected or not.
Issues with vertical agreements
Which aspects of vertical agreements are most likely to raise antitrust concerns?
The vertical restrictions most likely to raise antitrust concerns are those that qualify as hard-core restrictions under the European Commission’s Vertical Restraints Block Exemption Regulation.
The AdC considered that the companies Baxter-Médico Farmacêutica Lda and Glintt - Business Solutions Lda entered into an agreement that fixed the sale prices of unit-dose automatic machines from which vertical constraints to competition arose. The Court of Commerce and the Court of Appeal of Lisbon confirmed the AdC’s understanding.
Patent dispute settlements
To what extent can the settlement of a patent dispute expose the parties concerned to liability for an antitrust violation?
To date, there have been no publicly disclosed decisions by the AdC regarding the settlement of patent disputes. However, should such settlements have as their object or effect the prevention, distortion or restriction of competition, they would be in breach of antitrust provisions and, therefore, expose the parties to liability. Patent disputes are subject to arbitration courts.
Joint communications and lobbying
To what extent can joint communications or lobbying actions be anticompetitive?
If these actions indicate an intention to interfere in the market, to distort prices or to harm consumers, they may be deemed anticompetitive. Joint communications raise suspicions and investigations on a possible collusion and are therefore not advisable.
The AdC considers that trade associations facilitate the contact between competitors and therefore that collusion practices are often born from those contacts. The AdC is also concerned with the exchange of information that takes place within trade associations, in particular future prices or amounts of supply.
In fact, in the AdC guidelines for trade associations, it is drawn to the attention of the latter that their decisions and initiatives may restrict competition in case they enable or promote the coordination of companies’ strategic behaviour, which could interfere with free competition and the autonomy of economic agents.
For example, decisions and recommendations that would limit the individual freedom of competitors to define their commercial policy would pose a problem and probably be seen as anticompetitive (ie, joint communication or lobbying action cannot interfere in the pricing policy of economic agents). In particular, trade associations may not impose minimum or maximum prices, and even recommending prices should be avoided. However, lobbying the government to change the legal framework governing the pricing of medicines would be unlikely to be deemed as anticompetitive.
In the same way, appeals to boycotts or the collective refusal to provide goods as a way of asserting pressure, or as a restriction on individual liberty, would be deemed as anticompetitive.
To what extent may public communications constitute an infringement?
Similar to question 24, any communication that aims to affect the market could be an infringement. If the contents are, as above, an appeal to a boycott or to refuse the provision of a service or good (eg, to a competitor or any other economic agent), this communication would be seen as an infringement. If the public communication is subscribed by several companies, this would be a concerted action to harm another player.
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?
Although this allows pharmaceutical companies to know what their competitors are paying to doctors, no specifics of eventual underlying agreements are disclosed. The type of information to be disclosed concerns solely the amount paid by the pharmaceutical company, the name of the recipient and a brief description of the event that caused the payment (eg, lecture fees, a conference). The transparency measures per se should not affect or increase anticompetitive exchanges of information.
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?
A firm with monopoly or market power would be participating in anticompetitive conduct if it were to abuse its position, for example, if it:
- imposes, directly or indirectly, unfair purchase or selling prices or other unfair trading conditions;
- limits production, markets or technical development to the detriment of consumers;
- applies dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
- makes the conclusion of contracts subject to acceptance by the other parties of supplementary obligations, which, by their nature or according to commercial usage, have no connection with the subject of such contracts; or
- refuses access to another undertaking to a network or other essential facilities that it controls, when appropriate payment is available, in a situation where the other undertaking cannot act as a competitor of the firm, upstream or downstream, unless the latter can demonstrate that, for operational or other reasons, such access cannot reasonably be provided.
De minimis thresholds
Is there any de minimis threshold for a conduct to be found abusive?
Portuguese law does not foresee any such threshold nor are there any guidelines on this subject. If the conduct is distorting the market, the size of the market or the number of customers or tenders concerned do not affect the qualification of such conduct as abusive.
When is a party likely to be considered dominant or jointly dominant?
The current Competition Legal Regime, unlike the former Competition Act, no longer provides a definition for dominant undertakings. However, the AdC has maintained its understanding that an undertaking is dominant when it has sufficient market power to act independently on the market, with no or limited influence of clients, competitors or any third party.
Can a patent holder be dominant simply on account of the patent that it holds?
The fact that an undertaking holds a patent does not make it dominant, since other circumstances must be taken into consideration, such as the relevant market, the existence of substitute products and the possibility of competing products being developed.
Patent grant and enforcement
When would life-cycle management strategies expose a patent owner to antitrust liability?
If the purpose of such strategies is to prevent or delay the entry of generics into the market, life-cycle management strategies are highly likely to expose the patent owner to liability for an antitrust violation. On the other hand, if the strategies have objective and reasonable motives that can be demonstrated, there should be no liability for antitrust violation.
To what extent can an application for the grant or enforcement of a patent expose the patent owner to liability for an antitrust violation?
In general terms, a simple application for the grant of a patent would not expose the patent owner to liability for an antitrust violation unless this is deemed an abuse of a dominant position.
In the same way, the enforcement of a patent does not make the patent owner liable for an antitrust violation. However, the particular conditions of the case would need to be assessed to establish whether this enforcement is an abuse of a dominant position.
Can communications or recommendations aimed at the public or HCPs trigger antitrust liability?
Normally, such type of communications or recommendations would not trigger antitrust liability. The issues that normally arise concern the rules of publicity since medicines are subject to stricter rules. As long as the communications contain truthful, updated and accurate information, it is not likely that any concerns arise regarding antitrust liability.
This would not be so if the communications or recommendations aimed to prevent a new player from entering the market.
May a patent holder 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?
There is no direct prohibition that prevents a patent holder from marketing its drug as an authorised generic before the expiry of the patent protection. However, from a competition perspective, this situation may raise some concerns, since it may be deemed to delay or prevent the market entry of generics. Since there is no publicly known decision on a similar case, it is difficult to foresee the position of the AdC on this matter.
Furthermore, medicines are generally prescribed by reference to the active substance, and consumers may choose to buy generic drugs, which are normally less expensive. Therefore, changing to generics may not be an economically attractive solution when the patent protection is still in force.
Restrictions on off-label use
Can actions taken by a patent holder to limit off-label use trigger antitrust liability?
This limitation arises from Portuguese law. It would not be possible in Portugal to promote off-label use. Only the approved label use may be promoted.
When does pricing conduct raise antitrust risks? Can high prices be abusive?
Only medicines that are not subject to prescription or are co-paid by the state may have their price established without a specific threshold. If prices are considerably higher than those of other European countries (especially the reference countries), this could be seen as abusive if the pharmaceutical company has a dominant position in the market and makes use of it to determine these higher prices. Otherwise, a company is free to establish its own prices (when not subject to legal maximums). If the high price is the result of a concerted action by two or more companies, this would be anticompetitive.
To what extent can the specific features of the pharmaceutical sector provide an objective justification for conduct that would otherwise infringe antitrust rules?
The possible justifications for conduct that would otherwise infringe antitrust rules should not be affected by the specific features of the pharmaceutical sector. The AdC analyses each case, requests opinions when required or deemed relevant and verifies whether the conduct in the pharmaceutical sector may be considered justified.
Has national enforcement activity in relation to life-cycle management and settlement agreements with generics increased following the EU Sector Inquiry?
As referred to in the European Commission’s reports on the monitoring of patent settlements published between 2013 and 2015, the number of patent settlements has increased in recent years in Portugal. However, it is possible that the reason behind this is the new law that entered into force in 2012 (Law No. 62/2011). This law basically obliges originators to systematically bring arbitration proceedings against all generics applying for marketing authorisations, since they must initiate arbitration proceedings within 30 days of the publication of a marketing authorisation application by a generic company, otherwise they lose the ability to assert their IP rights.
According to these reports, it is difficult to estimate how many of these settlements would also have been concluded absent the new law, so we do not really know the impact of the EU Sector Inquiry in this matter.
Based on the publicly available decisions, one cannot say that the EU Sector Inquiry has had a significant impact on the enforcement activity of the AdC either.