The times when private antitrust damages claims were not a serious risk in the European Union are gone.  The European Commission and national competition authorities are actively promoting follow-on damages claims by private plaintiffs, and national health authorities are themselves bringing huge claims for damages arising from anticompetitive practices.

The following are examples of recent claims:

  • Servier.  In parallel with the EU Commission’s investigation into Servier’s reverse payment patent settlements concerning perindopril, a number of UK health authorities have filed damage claims seeking more than ₤230 million in damages from Servier.
  • Reckitt Benckiser. In connection with the OFT’s 2010 decision imposing a ₤10.2 million fine on Reckitt Benckiser for practices related to Gaviscon Original Liquid, the UK health authorities and a generic competitor have brought follow-on damage claims seeking approximately £89 million from Reckitt Benckiser.

The potential exposure of pharmaceutical suppliers from anticompetitive activity is now significantly higher, as infringements may not only trigger fines from competition authorities but also large follow-on damage claims by health authorities and other affected parties.

Plaintiffs bringing follow-on claims (relying on a decision by a competition authority finding an infringement) also have a significant procedural advantage, as the decision by the competition authority is generally binding on the national courts, meaning that plaintiffs only need to establish the quantum of their damages and causation. There are also legislative efforts ongoing at the EU and national levels aimed at further facilitate damage claims.  For example, in the United Kingdom, the authorities have proposed an opt-out collective action mechanism for UK-domiciled plaintiffs that could give a strong boost to private claims.

While most of the private damage claims have been limited to the UK courts, we anticipate that such claims will increase in a number of countries in coming years, both because follow-on damage claims will be very attractive to health authorities facing ever tighter budget constraints, and because of the high level of activity by the EU and national competition authorities’ in this sector (investigations are ongoing concerning, inter alia, reverse-payment patent settlements, co-promotion agreements, regulatory strategies and parallel trade).  In this context, pharmaceuticals companies should continue to be vigilant in ensuring that their pricing, life-cycle management, and supply chain strategies comply with the applicable competition laws.