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.