EU competition law imposes significant constraints on the ability of dominant firms in the life sciences sector to freely determine the price of their products. Price cuts and loyalty-inducing rebates can be abusive. So can excessively high or discriminatory prices. Vertically-integrated firms that control an important input must also ensure that the prices they charge upstream and downstream leave a sufficient margin to downstream competitors that rely on the upstream input.
Although these constraints apply only to firms that hold a dominant position on the relevant market where they are active, the importance of these limitations should not be underestimated considering that competition authorities are adopting very narrow market definitions.
Continue Reading The Limits Imposed by EU Competition Law on Pricing by Dominant Firms in the Life Sciences Sector