On Thursday the General Court (the “GC”) held the first two hearings  in the Lundbeck case.

Generics UK, now part of the Mylan group, and its former parent Merck KGaA (“Merck”) challenged the European Commission’s (the “Commission”) analysis, arguing that the Commission had wrongfully concluded that Generics UK’s settlement agreement with Danish originator Lundbeck restricted competition ‘by object’, such that it infringed article 101(1) of the Treaty on the Functioning of the European Union (“TFEU”).

Unlike its subsequent analysis in Servier where the Commission analysed by the ‘object’ and ‘effect’  of the agreements, in Lundbeck the Commission did not analyse the effects of the parties’ conduct.

Continue Reading Merck and Generics UK challenge the Commission’s ‘by object’ analysis in Lundbeck

On 14 July 2015, the European Commission (the “Commission”) published the preliminary non-confidential version of its decision in the Servier case, one year after the decision was issued.  This is the second key Commission decision, after Lundbeck, on reverse payment patent settlement agreements.

In Servier, the Commission went further than in Lundbeck and in its Fentanyl decision concerning a co-operation agreement between Sandoz and Janssen Cilag.  It not only looked at whether the settlement agreements between Servier and certain generic companies restricted competition by object, it also analysed their effects.  As a result of its analysis, the Commission found that Servier’s conduct amounted to an abuse of dominance under Article 102 of the Treaty on the Functioning of the European Union (the “TFEU”).

In July 2014, the Commission fined Servier and generic companies Niche/Unichem, Matrix (now Mylan), Teva, Krka and Lupin a total of €428 million for having concluded agreements that delayed market entry of generic versions of Servier’s blockbuster blood pressure medicine, perindopril, and protected it from price competition from generics in the EU.  All these agreements entailed Servier making significant payments (or providing other types of inducements) to the generic companies.  In addition to entering into these settlement agreements, Servier adopted various other practices that the Commission found were part of Servier’s overall strategy to delay or prevent entry of generic versions of perindopril. 
Continue Reading European Commission Published Non-Confidential Version of Servier Decision

On 27 May 2015, the Italian Competition Authority (ICA) issued a decision launching a sector inquiry into the supply of vaccines for human use.

The ICA has stated that it has launched the sector inquiry because of:

  • the importance of vaccines in terms of health care costs borne by the Italian National Health Service (over

On 9 July 2014, the European Commission’s Directorate General for Competition imposed fines totalling € 427.7 million on innovative pharmaceutical company Servier and generic companies Niche/Unichem, Matrix (now Mylan), Teva, Krka and Lupin.  The Commission’s decision was the result of proceedings opened in 2009 and follows a Statement of Objections sent to the parties involved in 2012, accusing Servier of abusing its dominant position in the market of antihypertensive medicines and entering into anticompetitive agreements with generic competitors.  According to the Commission’s decision, Servier aimed to prevent entry into the market of cheaper versions of Servier’s blockbuster drug perindopril.

The Servier investigation was a new case in the long series of Commission investigations into the pharmaceutical sector, which started in essence with the Commission’s Competition Inquiry into the Pharmaceutical Sector (Sector Inquiry).  The 2009 Final Report of the Sector Inquiry revealed practices that could have an impact on generic competition in the pharmaceutical market and initiated a monitoring exercise by the Commission of anticompetitive patent settlements.  The Commission concluded four monitoring exercises, covering the periods from mid 2008 – end 2009, 2010, 2011 and 2012.  The latest monitoring has shown that the number of patent settlements is increasing but the number of potentially problematic agreements from an antitrust perspective is low.  In the period after the Sector Inquiry, the Commission sanctioned pharmaceutical companies for anticompetitive patent settlements in two major instances, i.e., the citalopram and the fentanyl decisions of 2013.
Continue Reading European Commission Fines Servier and Five Generic Companies For Preventing Entry Of Generic Versions Of Blood Pressure Control Drug

On 11 December 2013, the European Commission (“Commission”) sanctioned pharmaceutical firms Johnson & Johnson and Novartis with fines totaling EUR 16.3 million over a co-promotion agreement which allegedly delayed the sale of generic versions of pain killer Fentanyl in the Netherlands.

Johnson & Johnson initially developed and commercialised Fentanyl in the 1960s.  In the Netherlands, patent protection for the Fentanyl depot patch expired in 2005 and Sandoz (a subsidiary of Novartis) was on the verge of launching its generic fentanyl patch.  According to the Commission, it had already purchased packaging material and obtained market authorizations.
Continue Reading Johnson & Johnson / Novartis: Another Pay-For-Delay Down for the European Commission

Earlier this year, the French Competition Authority (“FCA”) held that Sanofi-Aventis infringed the competition laws by implementing a “denigration strategy” aimed at convincing healthcare professionals to limit prescriptions and sales of generic versions of its branded product, Plavix.  As punishment for the infringement, the FCA fined Sanofi-Aventis €40.6 million.

This decision is another example of competition authorities extending the application of the competition rules to cover any activity perceived to not be “competition on the merits”.  In combination with the very low standards applied by the FCA to find that a company is dominant, this case raises serious concerns for pharmaceutical companies, as criticism of generic pharmaceuticals or other behaviour outside of “competition on the merits” could trigger investigations and large fines.
Continue Reading Abusive Denigration: Reflections on the Case of the French Competition Authority against Sanofi-Aventis

On 26 September 2013, the highest EU Court issued two important judgments, Dow and EI DuPont.  These judgments confirm that a parent company can be held liable and fined by the European Commission (“Commission”) for the antitrust infringement of its 50:50 JV in the EU.  In so stating, the EU Court endorsed the current hardened approach of the Commission and the General Court, which seeks to attribute antitrust liability to parent companies wherever possible.

In years past, JVs were in principle classified as separate undertakings (with the once-off exception of Avebe).  According to the Commission’s decisional practice, they should not be grouped together with their controlling parents, particularly for the purpose of attributing liability and collecting fines (e.g., Ijsselcentrale, Gosme/ Martell, Rubber Chemicals).  The situation changed with the Commission’s decision in Chloroprene Rubber, where it was held that both parent companies of a 50:50 JV should be held jointly and severally liable for the JV’s conduct. 
Continue Reading Parents’ Liability for Antitrust Infringements of 50:50 JVs: European Court confirms the new stringent approach in EU law

On 19 June 2013, the European Commission imposed fines totaling EUR 146 million to Lundbeck and several producers of generic medicines, including Alpharma, Merck KGaA/Generics UK, Arrow, and Ranbaxy, for infringement of Article 101 TFEU.  This is the first Commission decision dealing with so-called “reverse payment” patent settlements or “pay for delay” agreements.
Continue Reading Lundbeck: First European Commission Decision on “Pay for Delay”

The French Competition Authority (“FCA”) is currently investigating the intensity of competition in the supply of pharmaceuticals.  The investigation was launched in February 2013 and concerns all levels of the medicinal distribution chain (pharmaceutical suppliers, wholesalers and retailers).

In July 2013, the FCA submitted to public consultation its initial assessment of the pharmaceutical sector.  The FCA raised multiple concerns at every level of the distribution channel.  The main areas of concern identified by the FCA are as follows:
Continue Reading French Competition Authority Issues Preliminary Assessment of Pharmaceutical Sector

Market definition is integral to a competition authority’s ability to sanction anti-competitive practices under Article 102 TFEU.  If the market is defined narrowly, a company is more likely to have a dominant position and thus is more likely to face increased scrutiny of its commercial strategies.  In the pharmaceutical sector, recent developments indicate that originators face a heightened risk that competition authorities will take a narrow approach when defining the relevant market. 
Continue Reading Market Definition in the Pharmaceutical Sector: Incentives in Article 102 Cases