REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT UPDATE ON COMPETITION ENFORCEMENT IN THE PHARMACEUTICAL SECTOR (2018-2022) European competition authorities working together for affordable and innovative medicines
Date: 2024-01-26
Institutions: Directorate-General for Competition, European Commission
Subjects: EU competition policy, anti-trust legislation, health care, innovation, medicinal product, merger control, pricing of medicines, research and development, restriction on competition, right to health

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 26.1.2024  COM(2024) 36 final  REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT UPDATE ON COMPETITION ENFORCEMENT  IN THE PHARMACEUTICAL SECTOR (2018-2022)  European competition authorities working together  for affordable and innovative medicines  
 
 
REPORT FROM THE COMMISSION TO THE COUNCIL AND THE 
EUROPEAN PARLIAMENT 

UPDATE ON COMPETITION ENFORCEMENT  
IN THE PHARMACEUTICAL SECTOR (2018-2022) 

European competition authorities working together  
for affordable and innovative medicines 

EXECUTIVE SUMMARY 

This Report provides an overview of how the Commission and the national competition 
authorities of the EU Member States (‘European competition authorities’) have enforced 
EU antitrust and merger rules concerning medicines and certain other medical products 
in the period 2018-2022 (1). It also reports on how EU competition law served to protect 
undertakings and consumers during the challenging period of the Covid-19 crisis. It is a 
follow-up to the previously published Report covering the years 2009-2017 (2). 

In  the  period  covered  by  this  report,  from  2018  until  2022,  the  European  competition 
authorities  together  adopted  26  antitrust  decisions  related  to  pharmaceutical  products. 
These decisions led to sanctions (with fines nearing EUR 780 million) or made binding 
commitments to remedy anti-competitive behaviour. Some of these decisions addressed 
anti-competitive practices that had previously not been addressed under EU competition 
law.  These  precedents  give  guidance  to  industry  players  on  how  to  ensure  that  they 
comply with EU competition rules. In 2018-2022, European competition authorities also 
investigated more than  40  pharma  cases which were closed  without an infringement  or 
commitment decision, while some 30 cases of possible anti-competitive infringements in 
the pharmaceutical sector are currently being examined.  

To  ensure  that  pharmaceutical  markets  do  not  get  too  concentrated  due  to  mergers,  the 
Commission  reviewed  more  than  30  transactions  in  the  pharmaceutical  sector. 
Competition concerns were detected in 5 of these merger cases. The Commission cleared 
4 of these mergers only after the companies offered to modify their merger transaction, 
while one merger was abandoned. (3) 

Examples of antitrust and merger cases illustrate how close competition law scrutiny of 
the  pharmaceutical  sector  and  competition  law  enforcement  help  to  safeguard  EU 
patients’ access to affordable and innovative medicines. 

(1)  For the United Kingdom, the report covers the period until the end of 2020. The United Kingdom has 
withdrawn from the European Union, with the transition period ending on 31 December 2020. Since 1 
January 2021, EU competition law has no longer been enforced in the United Kingdom. 

(2) 

 https://op.europa.eu/en/publication-detail/-/publication/9cb466c8-7b71-11e9-9f05-01aa75ed71a1 

(3)  The  Commission  additionally  intervened  in  several  non-pharmaceutical  cases  that  relate  to  health  or 
(bio-)medical  technologies,  most  notably  in  prohibiting  a  merger  regarding  cancer  detection  tests 
(discussed in Sections 2.2.1 and 6.2.2). 

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2 

 
 
 
Contents 

EXECUTIVE SUMMARY ................................................................................................. 1 

1. 

INTRODUCTION ....................................................................................................... 5 

2.  OVERVIEW  OF  COMPETITION  ENFORCEMENT 

IN  THE 

PHARMACEUTICAL SECTOR ................................................................................ 7 

2.1.  Enforcement of antitrust rules ........................................................................... 7 

2.1.1.  What are antitrust rules? ...................................................................... 7 

2.1.2.  Who enforces antitrust rules? .............................................................. 8 

2.1.3.  What instruments and procedures are available? ................................ 8 

2.1.4.  Overview  of 

enforcement 
pharmaceutical sector ........................................................................ 10 

antitrust 

actions 

the 

in 

2.2.  Merger review in the pharmaceutical sector ................................................... 13 

2.2.1.  What are the EU merger rules?.......................................................... 13 

2.2.2.  What can the Commission do if a merger is problematic? ................ 15 

2.2.3.  Commission  merger  control  in  the  pharmaceutical  sector  in 

numbers ............................................................................................. 17 

2.3.  Market monitoring and advocacy regarding pharmaceuticals  ........................ 17 

3.  COMPETITION 

ENFORCEMENT 

IS 

SHAPED 

BY 

THE 

PARTICULARITIES OF THE PHARMACEUTICAL SECTOR ........................... 18 

3.1.  Specific structure of demand and supply in pharmaceutical markets ............. 18 

3.2.  The 

legislative  and  regulatory  framework  shapes  competitive 
dynamics .......................................................................................................... 21 

3.2.1.  Product  life-cycle  and  the  evolving  nature  of  competition 

driven by regulation ........................................................................... 22 

3.2.2.  Pricing and reimbursement rules strongly impact competition 

between medicines ............................................................................. 27 

3.2.3.  The  reform  of  the  EU  pharmaceutical  legislation  and 

Pharmaceutical Strategy for Europe .................................................. 27 

4.  COMPETITION 

LAW 

PROTECTS 

UNDERTAKINGS 

AND 

CONSUMERS ALSO IN TIMES OF COVID CRISIS ............................................ 29 

4.1.  Commission  guidance  on  antitrust  rules  to  companies  cooperating  in 

response to the Covid-19 outbreak .................................................................. 30 

4.2.  Commission  coordination  and  initiatives  of  national  competition 

authorities ........................................................................................................ 30 

5.  COMPETITION PROMOTES ACCESS TO AFFORDABLE MEDICINES ......... 32 

5.1.  Antitrust  enforcement  supports  swift  market  entry  of  cheaper 

medicines ......................................................................................................... 32 

5.1.1.  Patent misuse and vexatious litigation .............................................. 33 

3 

 
5.1.2.  Pay-for-delay agreements .................................................................. 34 

5.1.3.  Disparagement ................................................................................... 37 

5.1.4.  Abusive rebates and predatory pricing .............................................. 39 

5.1.5.  Other practices hindering market entry ............................................. 41 

5.2.  Enforcement  against  dominant  firms  charging  unfairly  high  prices 

(excessive prices) ............................................................................................. 41 

5.3.  Other  anti-competitive  practices  capable  of  hindering  price 

competition ...................................................................................................... 46 

5.4.  Merger control and affordable medicines ........................................................ 50 

5.4.1.  How do mergers affect the pricing of medicines? ............................. 50 

5.4.2.  How  does  merger  control  prevent  price  increases  from 

mergers?............................................................................................. 51 

6.  COMPETITION  DRIVES 

INNOVATION  AND 
CHOICE OF MEDICINES ....................................................................................... 52 

INCREASES  THE 

6.1.  Antitrust enforcement fosters innovation and choice ...................................... 52 

6.1.1.  Enforcement  against  practices  preventing  innovation  or 

limiting patient choice ....................................................................... 52 

6.1.2.  Competition  rules  support  procompetitive  co-operation  on 

innovation .......................................................................................... 53 

6.2.  Merger control preserves competition on innovation for medicines ............... 53 

6.2.1.  How  can  mergers  harm  innovation  in  the  pharmaceutical 

sector? ................................................................................................ 54 

6.2.2.  How can merger control preserve conditions for innovation? .......... 54 

7.  CONCLUSION ......................................................................................................... 57 

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1. 

INTRODUCTION 

This Report provides an overview of how the Commission and the national competition 
authorities of the EU Member States (‘European competition authorities’) have enforced 
EU antitrust and merger rules in the pharmaceutical sector in the period 2018-2022 (4).  

It  is  a  follow-up  to  the  previously  published  Report  covering  the  years  2009-2017 (5), 
serving to present the same overview of the sector for a subsequent period. 

This  report  responds  to  concerns  previously  expressed  by  the  Council (6)  and  the 
European  Parliament (7)  that  patients’  access  to  affordable  and  innovative  essential 
medicines  may  be  endangered  by  a  combination  of  very  high  and  unsustainable  price 
levels,  active  business  strategies  by  pharmaceutical  companies,  and  the  limited 
bargaining power of national governments against those pharmaceutical companies.  

Being healthy and having access to affordable and innovative medicines and health care 
matters  a  lot  to  people.  The  societal  and  economic  importance  of  the  pharmaceutical 
sector and the healthcare sector in general became even more apparent during the Covid-
19  crisis.  Spending  on  preventive  care  (e.g.  testing,  tracing,  information  campaigns 
related to the pandemic) increased by nearly one-third, and spending growth on inpatient 
care reached nearly 9 % in 2020 (compared to 2019). Despite a significant reduction in 
GDP,  per  capita  health  expenditure  increased  to  between  5.8 %  (Luxembourg)  and 
in  2020. (8)  Spending  on 
12.8 %  (Germany)  of  GDP 
in  EU  Member  States 
pharmaceuticals constitutes a significant share of government spending on healthcare. (9) 
In  this  context,  prices  of  medicines  can  pose  a  high  burden  on  the  national  healthcare 
systems. 

Moreover,  continued  efforts  to  innovate  and  invest  into  research  and  development 
(‘R&D’)  are  crucial  to  developing  new  or  improved  treatments  that  offer  patients  and 
practitioners a choice of state-of-the-art medication. However, incentives to innovate can 
also be curbed by both mergers and anti-competitive practices. 

This  report  shows  the  ways  in  which  competition  law  enforcement,  i.e.  enforcing  both 
the EU antitrust rules and the EU merger rules (10) has helped to safeguard EU patients’ 

(4)  For the United Kingdom, the report covers the period until the end of 2020. The United Kingdom has 
withdrawn from the European Union, with the transition period ending on 31 December 2020. Since 1 
January 2021, EU competition law has no longer been enforced in the United Kingdom. 

(5)  Competition  Enforcement 

the  Pharmaceutical  Sector 
in 
policy.ec.europa.eu/sectors/pharmaceuticals-health-services_en. 

(2009-2017),  https://competition-

(6)  Council  conclusions  on  strengthening  the  balance  in  the  pharmaceutical  systems  in  the  EU  and  its 

Member States, 17 June 2016, paragraph 48 (OJ C 269, 23.7.2016, p. 31). 

(7)  European  Parliament  resolution  of  2  March  2017 on  EU options  for  improving access  to  medicines 

(2016/2057(INI)), 2 March 2017. 

(8)  OECD (2022), Health at a Glance: Europe 2022, p. 132. 

(9)  OECD (2022),  Health at a Glance: Europe 2022, p. 142. Pharmaceuticals sold in retail represented 
approximately  15 %  of  healthcare  expenditure  on  average  across  EU  countries  in  2020.  This  figure 
does  not  include  pharmaceuticals  used  in  hospitals,  which  may  add  another  20 %  to  a  country’s 
pharmaceutical bill.  

(10)  This report does not cover the Commission’s control of state aid (e.g. aid for R&D to pharmaceutical 
companies, or state aid in the field of health insurance) nor cases where competition is distorted due to 

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access  to  both  affordable  and  innovative  medicines.  It  has  been  drawn  up  in  close 
cooperation with the national competition authorities (‘NCAs’) of the EU Member States 
(the  Commission  and  NCAs  are  jointly  referred  to  as  the  ‘European  competition 
authorities’).  The  European  competition  authorities  closely  cooperate  to  enforce  EU 
competition law as well as to continuously monitor the pharmaceutical markets.  

Using  concrete  examples,  this  report  describes  how  the  rules  prohibiting  abuses  of  a 
dominant position and restrictive agreements have been enforced to ensure that (i) price 
competition  for  pharmaceuticals  is  not  artificially  reduced  or  eliminated;  and  (ii)  anti-
competitive practices do not restrict innovation (11) in the sector. Scrutinising mergers of 
pharmaceutical  companies  for  their  possible  negative  impact  on  competition  equally 
serves  these two objectives.  The report describes  how the Commission’s application of 
the EU merger control rules has in specific cases contributed to having more affordable 
and innovative medicines. It focuses on medicinal products for human use. 

Antitrust investigations are complex and require considerable resources. This is why the 
European competition authorities focus their investigations on the most important cases, 
including  those  that  can  provide  guidance  to  market  participants  and  deter  them  from 
engaging  in  similar  anti-competitive  conduct.  Competition  law  scrutiny  thus  helps  to 
improve  competition  on  pharmaceutical  markets  not  only  in  terms  of  the  specific  case 
investigated, but also in a broader sense by guiding the industry in its future behaviour. 
In  recent  years  the  European  competition  authorities  have  set  a  number  of  important 
precedents  which  clarified  the  application  of  EU  competition  law  to  novel  issues  in 
pharmaceutical  markets.  These landmark decisions were often based on comprehensive 
inquiries  of  the  entire  sector.  The  European  competition  authorities  continue  to  be 
committed to ensuring that competition rules are enforced in pharmaceutical markets in 
an  effective  and  timely  manner,  including  by  providing  guidance  to  companies  in  the 
context  of  the  Covid  crisis  (e.g.  how  to  discuss  methods  to  increase  the  production  of 
personal  protection  equipment  material  in  a  way  that  would  not  infringe  competition 
rules). 

While  competition  law  enforcement  (antitrust  and  mergers)  contributes  to  securing 
access to innovative and affordable medicines for patients and healthcare systems, it does 
not  replace  or  interfere  with  the  legislative  and  regulatory  measures  aimed  at  ensuring 
that  EU  patients  benefit  from  state-of-the-art  and  affordable  medicines  and  healthcare. 
Competition  law  enforcement  instead  complements  the  various  regulatory  systems.  It 
does  so  mainly  by  intervening  in  individual  cases  against  specific  market  conduct  of 
companies.  Competition  authorities  occasionally  also  use  advocacy  to  propose  to 
decision-makers  in  the  public  or  private  sphere  pro-competitive  solutions  to  systemic 
market failures. 

This report covers the period 2018-2022. It provides:  

special or exclusive rights granted by a Member State (e.g. complaints by private healthcare providers 
against potential excessive compensation of publicly owned hospitals). 

(11)  Innovation  covers  both  innovation  in  terms  of  new  medicines  but  also  choice  between  different 
treatments as well as improvements of other parameters e.g. quality in terms of efficacy, safety or an 
improved  production  process.  Price  competition  is  based  on  choice  between  different  closely 
interchangeable treatments of requisite quality. 

6 

 
 
–  a general overview of competition law enforcement by the Commission and the NCAs 

in the pharmaceutical sector (Section 2);  

–  a  description  of  the  main  characteristics  of  the  pharmaceutical  sector  that  shape  the 

competition assessment (Section 3);  

–  an explanation of how competition law protected undertakings and consumers also in 

times of Covid-19 crisis (Section 4); and  

–  an  illustration  of  how  competition  law  enforcement  contributes  to  affordable 
medicines  (Section  5)  and  to  innovation  and  choice  in  medicines  and  treatments 
(Section  6),  through  an  analysis  of  (Commission  and  NCA)  antitrust  cases,  and 
(Commission) merger cases. 

2.  OVERVIEW OF COMPETITION ENFORCEMENT IN THE PHARMACEUTICAL SECTOR 

This Section provides an introduction to the rules as well as an overview of some facts 
and  figures  on  enforcement  activities  of  the  European  competition  authorities.  Section 
2.1  addresses  enforcement  of  the  antitrust  rules,  i.e.  the  prohibition  of  restrictive 
agreements  and  abuses  of  a  dominant  position.  Section  2.2  describes  the  review  of 
mergers  and  acquisitions  to  prevent  concentrations  that  could  significantly  impede 
effective  competition.  Section  2.3  reports  on  the  market  monitoring  and  advocacy 
measures undertaken by the European competition authorities. 

2.1.  Enforcement of antitrust rules 

2.1.1. What are antitrust rules? 

Article 101 of the Treaty on the Functioning of the European Union (‘TFEU’) prohibits 
agreements  between  undertakings,  decisions  by  associations  of  undertakings  and 
concerted  practices  which  have  as  their  object  or  effect  the  restriction  of  competition. 
Article 102 TFEU prohibits abuses of a dominant position on a given market. Regulation 
(EC)  No  1/2003 (12)  empowers  both  the  Commission  and  the  NCAs  to  apply  the  rules 
contained in the TFEU to anti-competitive practices. 

Companies  have  to  assess  for  themselves  whether  their  practices  comply  with  antitrust 
rules.  To  safeguard  legal  certainty  concerning  the  application  of  competition  law,  the 
Commission has adopted regulations specifying when certain types of agreements (such 
as  licensing  agreements)  can  be  block-exempted  and  has  issued  guidelines  that  clarify 
how the Commission applies antitrust rules. (13) 

(12)  Council  Regulation  (EC)  No  1/2003  of  16 December  2002  on  the  implementation  of  the  rules  on 

competition laid down in Articles 81 and 82 of the Treaty (OJ L 1, 4.1.2003, p. 1). 

(13)  An  overview  of  the  applicable  rules  is  available  at:  https://competition-policy.ec.europa.eu/antitrust-

and-cartels/legislation_en . 

7 

 
 
2.1.2. Who enforces antitrust rules? 

The  Commission  and  the  27 (14)  NCAs  share  enforcement  work.  The  NCAs  are  fully 
empowered to apply Articles 101 and 102 TFEU. The Commission and NCAs co-operate 
closely within the European Competition Network (‘ECN’). A case can be dealt with by 
a single NCA, by the Commission or by several authorities acting in parallel. 

If certain conduct does not affect cross-border trade, the NCAs only apply their national 
antitrust laws, which are often a reflection of EU law. 

Besides  the  European  competition  authorities  enforcing  EU  antitrust  rules,  the  national 
courts  are  also  fully  empowered  and  called  upon  to  apply  Articles 101  and  102 TFEU. 
They do this both  when reviewing decisions of NCAs and in litigation between private 
parties. National courts and the European competition authorities also cooperate: courts 
can  request  an  authority’s  opinion  on  the  application  of  the  EU  antitrust  rules  and 
authorities can participate in court proceedings by submitting their written observations. 

2.1.3. What instruments and procedures are available? 

The  European  competition  authorities  can  adopt  decisions  that  find  that  a  certain 
agreement or unilateral conduct breached Article 101 and/or Article 102 TFEU. In these 
cases,  the  authority  adopts  a  “prohibition  decision”  and  orders  the  companies  to  cease 
and desist from the infringing conduct and may impose a fine, which can be substantial. 
Specific remedies may also be imposed. The Commission and NCAs (15) may also decide 
to accept the investigated firms’ binding commitments to put an end to the problematic 
practices. Such commitment decisions do not establish an infringement or impose a fine 
on the companies but can be key to restoring competition in a market.  

Box 1: What is a commitment decision? 

The commitment decision is a formal settlement solicited by a company under investigation and 
agreed  by  the  competition  authority  where  the  commitments  are  best  suited  to  address  its 
concerns. (16) If the commitments offered are accepted by the  authority, the case will be closed 
with a commitment decision without a formal finding of infringement under Articles 101 or 102 
TFEU.  

Commitment decisions can be useful to craft remedies that might better address the competition 
concerns. The commitments can be either behavioural or structural and may be limited in time. 
Moreover, the Commission can reassess the situation if a material change takes place in any of 
the  facts  on  which  the  decision  was  based.  It  is  also  possible  for  the  company  to  ask  the 
Commission to lift a commitment that is no longer appropriate. For an example of a commitment 
decision, see Box 13 below. 

The commitment decision generally provides for monitoring of the commitments, and in case of 
non-respect  of  the  conditions  of  the  commitment,  the  competition  authority  can  impose  a  fine. 
Periodic  penalty  payments  are  also  possible  until  compliance  with  the  commitments.  In  this 
period,  the  Romanian  NCA  imposed  such  a  fine  on  GlaxoSmithKline  (GSK).  The  initial 

(14)  28 until end 2020 (see also footnote 7). 

(15)  Directive  (EU)  2019/1  of  the  European  Parliament  and  of  the  Council  of  11  December  2018  to 
empower  the  competition  authorities  of  the  Member  States  to  be  more  effective  enforcers  and  to 
ensure the proper functioning of the internal market (OJ L 11, 14.1.2019, p. 3). 

(16)  The formal commitment procedure of the Commission is laid down in Article 9 of Council Regulation 

(EC) No 1/2003. 

8 

 
 
investigation – seeking to establish whether GSK’s distribution model of the medicines Avodart, 
Seretide  and  Tyverb  restricted  their  parallel  export  –  had  been  concluded  in  2017  with 
commitments from GSK to supply the medicines Avodart and Seretide for two years in sufficient 
quantities to meet patients’ needs on the domestic market. (17) However, GSK was later found to 
have ceased, before the expiry of the two-year period, the marketing of three forms of Seretide, a 
medicine indicated for the treatment of asthma and chronic obstructive pulmonary disease. (18)) 

The  main  investigative  instruments  of  the  European  competition  authorities  include 
unannounced on-site inspections, requests for information, and interviews. Requests for 
information  can be powerful  investigation tools as  the companies may be compelled to 
provide complete and correct information with the threat of fines. 

Box 2: What are on-site inspections? 

The Commission as well as the NCAs can carry out unannounced inspections (sometimes called 
‘dawn  raids’)  and  search  the  premises  of  companies  to  collect  evidence  of  suspected  anti-
competitive conduct. Failure to submit to an inspection or obstructing it, for example by entering 
a  room  sealed  off  by  the  Commission,  can  lead  to  hefty  fines.  The  ECN+  Directive  ensures 
among other things that all NCAs have the key powers and tools to investigate, including more 
effective inspection powers (for example, the right to search information stored on devices such 
as smartphones, tablets, etc.). (19) 

In their proceedings, the European competition authorities safeguard the rights of defence 
of  the  investigated  parties.  For  example,  during  the  Commission’s  administrative 
proceedings, the investigated parties receive a comprehensive statement of objections and 
access  to  the  evidence  in  the  Commission’s  case  file  on  the  basis  of  which  they  can 
exercise their right to be heard before a final decision is taken. They can then reply to the 
objections  in  writing  and  in  an  oral  hearing  before  the  Commission  issues  a  final 
decision. 

The decisions of the European competition authorities are subject to a full and rigorous 
review by the courts competent to scrutinise if such decisions are well-founded in terms 
of substance and if all procedural rights of the parties have been respected. 

Antitrust investigations are generally complex as they require a thorough investigation of 
a  broad  range  of  facts  as  well  as  a  comprehensive  legal  and  economic  analysis. 
Investigations therefore require considerable resources, and it can take some years before 
a final decision is adopted. To ensure efficient use of resources, competition authorities 
may need to prioritise cases where, for instance, the market impact of the practices may 
be more significant or where the decision could establish a useful precedent applicable to 
the pharmaceutical sector or even beyond. 

(17)  Decision of the Consiliul Concurrentei of 28 December 2017. 

(18)  Decision  of  the  Consiliul  Concurentei  of  11  August  2020,  imposing  a  fine  of  RON  11.9  million 

(approx. EUR 2.5 million). 

(19)  See footnote 11. 

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Box 3: Can victims of anti-competitive behaviour claim damages? 

Victims  of  antitrust  infringements  are  entitled  to  compensation.  An  EU  Directive  ensures  that 
national laws allow for effective actions for damages before national courts. (20)Many damages 
actions  are  filed  after  a  final  decision  of  an  EU  competition  authority  (so  called  follow-on 
damages actions), while sometimes parties also turn directly to a court asking the court to both 
find  an  infringement  of  EU  competition  law  and  to  award  damages  for  the  harm  occurred  (so 
called stand-alone actions).  

specialties 

(So.Farma.Morra  SpA) 

For example, the appeal court in Venice (Italy) recently ruled on a dispute between a wholesale 
supplier 
distributor  of  pharmaceutical 
GlaxoSmithKline  SpA  (GSK),  where  the  distributor  complained,  in  a  stand-alone  action,  that 
GSK reduced the supply of Avodart (hyperplasia treatment) and Seretide (asthma treatment) in 
violation  of  competition  law  (abuse  of  a  dominant  position  within  the  meaning  of  Article  102 
TFEU).  The  plaintiff  claimed  compensation  for  loss  of  turnover,  loss  of  clientele  and  loss  of 
opportunity  to  make  investments.  In  a  judgment  delivered  on  4  February  2021 (21),  the  court 
found that EU competition law had been infringed and referred the case back to the first instance 
court  to  proceed  with  the estimation  of  the  damage claimed  by the  victim (total  claim of  EUR 
3,519,909). 

and 

its 

2.1.4. Overview of antitrust enforcement actions in the pharmaceutical sector 

In  the  period  2018-2022,  12  NCAs  and  the  Commission  adopted  26  “intervention” 
decisions  (finding  an  infringement  or  accepting  binding  commitments)  in  antitrust 
investigations related to pharmaceuticals for human use. The complete list of the 26 cases 
is available on DG Competition’s website (22). 

In  addition, 
the  European  competition  authorities  also  carried  out  substantial 
investigation  work  on  cases  which  were  closed  without  an  intervention  decision  (e.g. 
because  the  concerns  were  resolved  during  the  investigation  and  there  was  no  need  to 
proceed  to  a  formal  decision),  and  they  are  currently  investigating  over  30  cases 
involving  pharmaceuticals.  They  have  also  adopted  10  infringement  or  commitment 
decisions in cases concerning medical devices and 13 in cases related to other healthcare 
matters. 

(20)  Directive  2014/104/EU  of  the  European  Parliament  and  of  the  Council  of  26 November  2014  on 
certain rules governing actions for damages under national law for infringements of the competition 
law provisions of the Member States and of the European Union (OJ L 349, 5.12.2014, p. 1). 

(21)  Judgment of the Tribunale di Venezia of 4 February 2021 (6471/2015). 

(22)  In  this  report,  the  26  antitrust  cases  are  referred  to  in  footnotes  with  the  name  of  the  competition 
authority  and  the  date  of  the  decision.  The  complete  list  of  the  cases  is  available  at: 
https://competition-policy.ec.europa.eu/document/552ebb75-e502-491a-9fbd-f0f9d61dac39_en  .  This 
list also includes links to public information (e.g. press release, text of the decision, Court judgment). 

10 

 
 
Figure  1:  Antitrust  investigations  in  the  pharmaceutical  sector  by  European  competition 
authorities (2018-2022 and currently on-going) 

On-going 
investigations
>30

Intervention 
decisions 
pharmaceuticals
26

Investigation, 
but no 
intervention
>40

Competition authorities intervene and impose sanctions 

In 17 of the 26 intervention cases involving pharmaceuticals, the case was closed with a 
prohibition decision finding an infringement of EU competition law. Fines were imposed 
in 20 cases amounting to close to EUR 780 million in total for the relevant period (see 
Figure  2  below) (23).  In  9  cases,  the  investigation  could  be  closed  without  finding  an 
infringement  because  the  competition  concerns  were  removed  by  the  commitments 
offered  by  the  investigated  companies.  These  were  made  binding  by  a  decision  of  the 
competition authority. 

(23)  The reported fines are not final as appeals are ongoing in a number of cases. 

11 

 
 
 
Figure 2: Fines totalling close to EUR 780 million imposed by European competition 
authorities in cases involving pharmaceuticals (2018-2022)

Other (Greece, Italy, Portugal, United Kingdom)
€ 11,3 m

The Netherlands 
19,6 m

Belgium
€ 30,3 m

Spain
€ 54,9 m

Commission
€ 60,5 m

Lithuania
€ 72,6 m

Romania
€ 86,4 m

France
€ 444 m

To  collect  evidence,  unannounced  inspections  were  carried  out  in  7  of  the  26 
investigations  that  led  to  an  intervention  decision.  In  all  but  one  case,  requests  for 
information were used. Interviews were conducted in 8 cases. 

Half  of  the  26  investigations  were  initiated  ex  officio,  9  were  triggered  by  complaints, 
and 4 were initiated on other grounds (e.g. indicia gathered during a sector inquiry). The 
investigations related to anti-competitive practices by manufacturers of pharmaceuticals 
(11 cases), wholesalers (8 cases) and retail distributors (3 cases), and 4 cases related to 
practices  involving  both  manufacturers  and  distributors.  The  investigations  involved  a 
wide range of medicines, for example cancer drugs  (7 cases), antidepressants,  hormone 
treatment or vaccines. 

As  shown  in  Figure  3,  the  most  widespread  type  of  competition  concerns  leading  to 
intervention decisions are abuses of dominance (50 % of the cases), followed by different 
types  of  restrictive  agreements  between  companies.  These  include  (i)  restrictive 
horizontal agreements between competitors such as pay-for-delay agreements (8 %); (ii) 
outright  cartels  (such  as  bid  rigging)  (31 %);  and  (iii)  vertical  agreements  (such  as 
clauses  prohibiting  distributors  from  promoting  and  selling  products  of  competing 
manufacturers) (11 %). 

12 

 
 
Figure 3: Type of competition concerns where European competition authorities intervened 

14

12

10

8

6

4

2

0

Cartel

Other horizontal
agreements

Vertical restraints

Abuse of dominance

Competition authorities promote competition rules by carrying out investigations 

Besides those cases that ended with an intervention decision, the European competition 
authorities  also  carried  out  substantial  investigation  work  on  competition  concerns  in 
more than 40 cases that were closed for various reasons (in particular because the cases 
were no longer considered a priority after the alleged anticompetitive practices had been 
discontinued  during  the  investigation (24),  or  because  the  preliminary  investigation  did 
not  find  sufficient  evidence).  Even  if  no  sanctions  were  imposed  or  no  commitments 
reached  in  these  cases,  the  work  involved  close  contacts  with  different  players  in  the 
pharmaceutical  markets,  which  often  helped  to  clarify  the  competition  rules  and  their 
application in the pharmaceutical sector.  

The European competition authorities are currently investigating more than  30 cases in 
the pharmaceutical sector. 

2.2.  Merger review in the pharmaceutical sector 

2.2.1. What are the EU merger rules? 

Pharmaceutical companies regularly enter into mergers or acquisitions (‘mergers’). Some 
of these transactions aim to achieve economies of scale, extend R&D to new therapeutic 
areas, meet increased profit targets, etc. 

Consolidation that affects the market structure can however also thwart competition. For 
example,  the  merged  company  may  acquire  market  power  allowing  it  to  hike  up  the 
prices of its medicines, or to abandon the development of promising new treatments that 
would  threaten  its  market  position.  Merger  control  seeks  to  ensure  that  consolidation 
does not significantly impede effective competition in the pharmaceutical sector. 

(24)  This  was,  for  instance,  the  case  in  two  Commission’s  investigations.  In  the  case  AT.40731  Quidel: 
diagnostic  testing  kits,  a  long-lasting  non-compete  obligation  concerning  cardiovascular  disease 
testing kits was removed. In the case AT.40576 Lonza, alleged exclusionary practices in the contract 
development and manufacturing of biological medicines were discontinued during the investigation. 

13 

 
 
 
The Commission is entrusted with reviewing mergers with an EU dimension, i.e. where 
the  merging  companies’  turnovers  meet  the  thresholds  laid  out  in  the  EU  Merger 
Regulation.  This  means  that  companies  active  in  several  EU  Member  States  can  have 
their  transaction  reviewed  by  the  Commission,  rather  than  separately  in  each  relevant 
Member State (the "one stop shop" principle). If these thresholds are not met, a merger 
can be caught by national jurisdictional rules and reviewed by one or several NCAs.(25)  

Moreover,  the  EU  Merger  Regulation  includes  a  system  of  referrals  from  NCAs  to  the 
Commission  and  vice  versa  to  ensure  that  the  best  placed  authority  is  in  charge  of 
reviewing any transaction. (26) This includes the ability for one or more NCAs to request 
that the Commission reviews a merger which is not caught by the national jurisdictional 
thresholds,  but  that  affects  trade  between  Member  States  and  threatens  to  significantly 
affect competition within the territory of the Member State or States making the request.  

Box 4: Commission’s revised approach to referrals by Member States 

Recently, the Commission revised its approach to requests for case referrals by NCAs that do not 
have jurisdiction over a merger. In the past, NCAs were discouraged from requesting referrals in 
such  cases,  as  it  was  considered  based  on  experience  at  the  time  that  the  turnover-based 
thresholds captured all transactions that could materially impact the internal market. However, in 
2016,  the  Commission  launched  a  public  consultation  on  the  functioning  of  certain  procedural 
and  jurisdictional  aspects  of  EU  merger  control,  for  example  in  relation  to  the  notification 
thresholds  in  the  pharmaceutical  sector.  The  Commission  found  that  while,  on  the  whole,  the 
existing  thresholds  work  well,  there  is  an  increasing  phenomenon  of  concentrations  involving 
firms that generate little or no turnover at the time of the transaction but that already play or may 
develop into a significant competitive role on the market. These mergers would not be captured 
by the existing thresholds but could have a significant impact on competition. This is particularly 
relevant for the pharmaceutical sector, where innovation is a key parameter of competition and so 
targets  with  promising  drug  pipelines  can  have  high  valuations  and  significant  competitive 
potential, even if they do not generate turnover yet and therefore fall below the relevant merger 
control thresholds. (27)  

The Commission considers that referrals by NCAs is the most appropriate tool and a necessary 
safety  net  to  capture  such  below-threshold  transactions  that  could  give  rise  to  competition 
concerns. On 26 March 2021, the Commission adopted a Communication providing Guidance on 
the application of the referral mechanism set out in Article 22 of the EU Merger Regulation to 
certain categories of cases. The Commission clarified that it intends, in certain circumstances, to 
encourage  and  accept referrals in cases  where  the referring  Member  State  does not  have  initial 
jurisdiction over the case, where the criteria of Article 22(1) the EU Merger Regulation are met. 
(28)  

(25)  On  11  September  2020,  the  Commission  announced  a  revised  approach  to  the  use  of  referrals  for 

merger cases which are not notifiable at EU- or Member State-level, as described in Box 4.  

(26)  For example, merging companies as well as one or more Member States can ask for the Commission 
to  review  a  merger  falling  below  the  EU  turnover  thresholds  in  specific  circumstances  (e.g.  such  a 
request may come from the merging companies provided that the merger would be reviewed in at least 
three  Member  States  and  these  agree  to  the  referral).  Similarly,  merging  companies  as  well  as  a 
Member State can ask for a merger meeting the EU turnover thresholds to be reviewed by a NCA if 
the impact of the merger will be in that specific Member State. 

(27)  See Communication from the Commission - Guidance on the application of the referral mechanism set 
out in Article 22 of the Merger Regulation to certain categories of cases (OJ C 113, 31.3.2021, p. 1), 
paragraphs 9-12.  

(28)  Communication from the Commission - Guidance on the application of the referral mechanism set out 

in Article 22 of the EU Merger Regulation to certain categories of cases (OJ C 113, 31.3.2021, p. 1).  

14 

 
 
The  first  application  of  this  revised  approach  to  referrals  took  place  in  the  biotech  sector  (the 
Illumina/GRAIL  case,  see  Box  16  below),  and  in  that  case  the  EU  General  Court  upheld  the 
Commission’s  approach  to  these  referrals. (29)  The  Commission  now  actively  monitors 
pharmaceutical  transactions  to  identify  concentrations  that  fall  below  the  EU’s  and  Member 
States’  notification  thresholds  but  nonetheless  merit  review  by  the  Commission  to  ensure  that 
they  do  not  harm  effective  competition.  This  report  focuses  only  on  those  merger  control 
proceedings in which EU merger control law is applied, i.e. mergers that were investigated by the 
Commission. 

The  legal  framework  for  the  assessment  of  mergers  by  the  Commission consists  of  the 
EU  Merger  Regulation  and  the  Implementing  Regulation (30).  In  addition,  there  are  a 
number  of  notices  and  guidelines  which  serve  as  guidance  on  how  the  Commission 
would carry out its merger review in various circumstances (31).  

When reviewing a merger, the Commission makes a prospective analysis of whether the 
transaction would significantly impede effective competition in the EU, in particular  by 
creating  or  strengthening  a  dominant  position.  In  its  assessment,  the  Commission 
considers  in  particular  (i)  what  behaviour  the  merged  entity  could  adopt  post-merger 
(‘unilateral effects’); (ii) whether other companies would retain the incentives to compete 
or would instead align their commercial strategy with the merged company (‘coordinated 
effects’); and (iii) whether access to suppliers or to customers could be denied (‘vertical 
and conglomerate effects’). 

A merger review is initiated when the Commission receives notice from the companies 
involved  of  their  intention  to  merge,  often  in  advance  of  a  formal  notification.  Parties 
have  an  obligation  to  notify  their  merger  and  to  refrain  from  implementing  it  until  the 
Commission has authorised it. The practice of implementing a merger before a clearance 
decision is commonly known as “gun-jumping”. 

2.2.2. What can the Commission do if a merger is problematic? 

If a deal raises competition concerns, for example due to the risk of a price increase for 
medicines  or  harm  to  innovation,  and  the  merging  companies  do  not  propose  suitable 
modifications, the Commission may prohibit the transaction. 

To  avoid  this,  companies  can  propose  modifying  the  concentration  to  eliminate  the 
competition  concerns.  Such  modifications  are  commonly  referred  to  as  remedies  or 
commitments. If proposed remedies appear fit for purpose, the Commission carries out a 
so-called market test by soliciting views, in particular, from competitors and customers, 
on whether the  commitments would effectively  eliminate the competition  concerns. On 
this  basis,  the  Commission  decides  whether  to  approve  the  transaction  subject  to  the 
conditions  and  obligations  of  implementing  the  remedies  either  before  or  after  the 
companies merge, depending on the specific circumstances of the case.  

(29)  Case T-227/21 – Illumina v Commission. This case is currently under appeal before the EU Court of 

Justice (Case C-611/22 – Illumina v Commission and C-625/22 Grail v Commission.). 

(30)  Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between 
undertakings (the EU Merger Regulation) (OJ L24, 29.1.2004, p. 1) and Commission Regulation (EC) 
No 802/2004 of 7 April 2004 implementing Council Regulation (EC) No 139/2004 on the control of 
concentrations between undertakings (OJ L133, 30.4.2004, p. 1). 

(31)  An overview of the applicable rules is available at: 

 https://competition-policy.ec.europa.eu/mergers/legislation_en . 

15 

 
 
 
The  Commission  considers  structural  remedies,  in  particular  divestitures,  to  be  the 
preferred way to solve competition issues in merger cases. Accordingly, the remedies in 
the  pharmaceutical  sector  often  consist  of  a  divestiture  of  marketing  authorisations  for 
the products for which concerns have been identified in the relevant Member State. This 
is usually accompanied by intellectual property and technology transfer of manufacturing 
and  sales  know-how,  the  transitional  supply  or  other  agreements  and,  where  relevant, 
product facilities and personnel. 

Box 5: Examples of structural remedies 

Divestment  of  marketed  drugs  (Case  M.9274  –  GSK/Pfizer  Consumer  Healthcare  Business 
(2019)) 

GSK and Pfizer's Consumer Healthcare Business overlapped in a number of “over-the-counter” 
pharmaceutical  product  categories,  including  notably  topical  pain  management  (creams,  gels, 
spays  and  patches  to  treat  pain  locally).  The  Commission  was  concerned  that  the  acquisition 
would reduce competition for topical pain management products by creating or strengthening a 
dominant position, possibly leading to price increases  in a number of EEA countries, including 
Austria, Germany, Ireland, Italy and the Netherlands.  

To address these concerns, the parties offered to divest Pfizer's topical pain management business 
(carried  out  under  the  ThermaCare  brand)  globally.  The  divestment  business  encompassed  all 
relevant  assets  contributing  to  the  current  operation  or  necessary  to  ensure  the  viability  and 
competitiveness thereof, including (i) a Pfizer manufacturing facility located in the US (dedicated 
to the production of ThermaCare products), (ii) all IP rights relating to the ThermaCare products 
and  brand,  as  well  as  (iii)  products  under  development. (32)  The  divestment  business  was 
ultimately sold to Angelini, an Italian pharmaceutical group. 

Divestment of a pipeline drug (Case M.9461 – AbbVie/Allergan (2020))  

In  this  case,  the  parties’  activities  mainly  overlapped  with  respect  to  biologic  treatments  for 
ulcerative  colitis  and  Crohn's  disease.  As  described  further  in  box  15  below,  AbbVie  and 
Allergan were two of the few companies developing promising drugs to target these diseases, and 
the  Commission  was  concerned  that  the  merged  entity  would  discontinue  Allergan’s  pipeline 
drug  to  avoid  duplication  of  development  efforts  and  the  cannibalisation  of  sales  of  AbbVie’s 
product. The transaction would have, thus, prevented a promising drug from reaching the market, 
leading to a loss of innovation, potentially less choice and higher prices for patients and health 
systems. 

The Commission approved the transaction subject to the divestment of Allergan’s pipeline drug. 
The divestment included notably (i) the rights to develop, manufacture and sell the pipeline drug 
worldwide; (ii) all IP rights, data, licences/permits, and contracts related to the drug; (iii) certain 
key  employees  of  Allergan  working  on  the  pipeline;  as  well  as  (iv)  a  number  of  transitional 
supply arrangements to ensure a smooth transfer of the business. (33) The pipeline was ultimately 
divested to AstraZeneca. 

(32)  Other  examples  of  cases  involving  the  divestment  of  marketed  drugs  include  e.g.  M.9517  – 

Mylan/Upjohn (2020). 

(33)  Other  examples  of  cases  involving  the  divestment  of  pipeline  drugs  include  e.g.  M.8955  – 
Takeda/Shire  (2018);  M.8401  –  J&J/Actelion  (2017);  M.7275  –  Novartis/GSK  Oncology  Business 
(2015). 

16 

 
 
2.2.3. Commission merger control in the pharmaceutical sector in numbers 

the  Commission  analysed  more 

During  2018-2022, 
the 
pharmaceutical  sector. (34)  Out  of  these,  5  were  problematic  from  a  competition 
standpoint. (35) The potential competition concerns identified related mainly to the risk of 
(i)  price  increases  for  some  medicines  in  one  or  several  Member  States;  (ii)  depriving 
patients  and  national  healthcare  systems  of  some  medicinal  products;  and  (iii) 
diminishing  innovation  in  relation  to  certain  treatments  developed  at  European  or  even 
global level. The issues identified by the Commission typically involved a small number 
of medicines compared to the overall size of the companies’ portfolio. 

than  30  mergers 

in 

Taking  into  account  the  remedies  offered  by  the  merging  companies,  the  Commission 
was  able  to  clear  4  of  the  mergers  that  raised  these  targeted  concerns,  allowing  the 
merger  to  go  ahead  and  protecting  competition  and  consumers  in  Europe.  One  merger 
was abandoned as a result of the Commission having raised initial competition concerns. 

As  a  result,  the  intervention  rate  in  the  pharmaceutical  sector  was  around  17 % (36).  In 
comparison, the total intervention rate across all sectors during the period was 5 %.  

2.3.  Market monitoring and advocacy regarding pharmaceuticals  

In  addition  to  their  direct  enforcement  activities  –  decisions  and  investigations  on 
(potential)  anti-competitive  practices  in  the  pharmaceutical  and  healthcare  sectors  –  in 
2018-2022,  the  competition  authorities  also  undertook  60  market  monitoring  and 
advocacy  activities.  Monitoring  activities  include  sector  inquiries,  market  studies  and 
surveys to identify obstacles to the proper functioning of competition that may exist in a 
sector. Advocacy activities are also  an important (albeit  sometimes less  visible) part of 
the work of competition authorities and include consultative opinions, ad hoc advice and 
other measures that promote – for instance vis-a-vis legislative and administrative bodies 
– approaches and solutions that are conducive to effective and fair competition in a given 
sector  or  market.  In  the  pharmaceutical  sector,  such  initiatives  are  of  particular 
importance  given  the  specific  challenges  for  competition  enforcement  in  this  area  (see 
Section 3). 

Competition authorities may conduct market monitoring where, for example, ‘the rigidity 
of  prices  or  other  circumstances  suggest  that  competition  may  be  restricted  or 

(34)  The Commission has in addition investigated a number of mergers in the fields of biotechnology and 
animal  health,  notably  prohibiting  one  transaction  (M.10188  Illumina/GRAIL  (2022))  and  requiring 
interoperability commitments in another (M.9945 Siemens/Varian (2021)). Moreover, in 2021-2022, 
the Commission considered more than 10 mergers in the pharmaceutical, biotech and medical devices 
sectors from the perspective of possibly inviting NCAs to request a case referral to the Commission 
under its revised approach to referrals. 

(35)  M.8955 – Takeda/Shire (2018, conditional clearance with remedies), M.9274 – GSK/Pfizer Consumer 
Health  Business  (2019,  conditional  clearance  with  remedies),  M.9461  –  AbbVie/Allergan  (2020, 
conditional  clearance  with  remedies),  M.9517  –  Mylan/Upjohn  (2020,  conditional  clearance  with 
remedies),  M.9547  –  J&J/Tachosil  (2020,  abandoned  after  the  Commission  opened  an  in-depth 
investigation). 

(36)  The  intervention  rate  is  calculated  comparing  the  number  of  merger  prohibitions,  merger  approvals 
subject to remedies and withdrawals of a merger notification  (during a Phase II investigation) to the 
overall number of cases notified to the Commission. 

17 

 
 
distorted’ (37).  Generally,  sector  inquiries  and  other  monitoring  and  advocacy  activities 
also  provide  guidance  to  the  market  participants  and  may  lead  to  a  follow-on  antitrust 
enforcement. Some NCAs even have far-reaching powers, allowing them for instance to 
conduct  inquiries  so  they  can  prepare  opinions  on  legislative  projects  or  even  impose 
regulatory  measures  that  may  have  an  impact  on  competition  conditions  in  a  specific 
sector. 

Almost  two  thirds  of  the  monitoring  and  advocacy  initiatives  undertaken  by  the  NCAs 
are  opinions  –  from  a  competition  policy  perspective  -  on  draft  legislation  related  to 
pharmaceuticals,  pharmacies,  medical  devices  or  health  services.  The  remainder  are 
mainly market monitoring actions such as sector inquiries or studies, often coupled with 
recommendations or proposals. 

Similarly,  as  in  the  period  covered  by  the  previous  ECN  Pharma  report  (2009-2017), 
more than one fourth of the 60 monitoring and advocacy actions focus explicitly on retail 
distribution of medicines and competition between pharmacies. One report – concerning 
online  pharmacy  markets  –  is  the  result  of  a  joint  initiative  from  the  Nordic  countries 
Denmark,  Norway,  Finland  and  Sweden.  Compared  to  the  previous  period,  a  new 
important  focus  is  pricing  of  (reimbursed)  medicines  and  excessive  pricing,  a  specific 
theme  in  about  one  fourth  of  the  initiatives.  A  further  new  topic  receiving  special 
attention  is  biological  medicines  and  biosimilars  (a  shift  from  generics  in  the  previous 
period, see Section 3.2.1).  

Complete  lists  of  the  monitoring  and  advocacy  activities  undertaken  by  the  European 
competition authorities in 2018-2022, with links to the relevant reports or documents, is 
available on DG Competition’s website (38). 

3.  COMPETITION  ENFORCEMENT  IS  SHAPED  BY  THE  PARTICULARITIES  OF  THE 

PHARMACEUTICAL SECTOR 

For competition policy and its enforcement activities in the pharmaceutical sector to be 
effective,  they  need  to  take  account  of  the  particularities  and  the  resulting  competitive 
dynamics of this sector. These particularities include, for instance, the specific structure 
of  demand  and  supply  involving  a  variety  of  stakeholders  (Section  3.1)  and  the 
comprehensive  legislative  and  regulatory  framework  in  the  different  Member  States 
(Section 3.2). 

3.1.  Specific structure of demand and supply in pharmaceutical markets 

Each  analysis  of  how  a  market  functions  and  each  assessment  of  conduct  under 
competition  law  must  take  due  account  of  the  structure  of  supply  and  of  demand.  A 
variety  of  stakeholders  pursue  different  interests  in  the  pharmaceutical  markets.  The 

(37)  Article 17 of Council Regulation (EC) No 1/2003, with respect to the Commission’s power to conduct 

a sector inquiry. 

(38)  https://competition-policy.ec.europa.eu/document/34141778-9e31-4cc4-ac9e-5b8c64f798bb_en  .  The 

list includes links to public information and/or the reports itself. 

18 

 
 
demand side is characterised by consumers (patients), prescribers, pharmacies, as well as 
health insurance schemes and national reimbursement bodies (39): 

−  Patients are the final users of medicines. They generally only pay – if at all – a small 
portion of the price of prescribed medicines, the rest being covered by the healthcare 
system. 

−  Prescribers, namely medical doctors, decide which prescription medicine the patient 
will  use.  They  may  also  advise  patients  about  which  over-the-counter  medicine  to 
use. However, they do not bear the cost of the treatment they have prescribed. 

−  Pharmacies  may  also  impact  the  demand  for  medicine.  In  many  Member  States, 
pharmacists are obliged or incentivised to dispense the cheapest available version of a 
given  medicine  (such  as  a  generic  version  or  a  parallel-imported  product). 
Pharmacists are often also the main source of advice for patients on over-the-counter 
medicines. 

−  The  costs  of  prescription  drugs  are,  fully  or  to  a  large  part,  covered  by  national 
reimbursement bodies or by health insurance companies, which are funded through 
taxes and/or insurance  fees.  In either  case, they  have a strong interest  in containing 
the  costs  of  healthcare,  while  ensuring  through  cost-efficient  treatments  the  best 
overall  health  care  for  patients.  Health  authorities  and  insurers  are  not  (directly) 
involved in the treatment choice made by prescribers and patients but can influence 
demand through price-control mechanisms. 

On  the  supply  side,  there  are  manufacturers  with  distinct  business  models  (supplying 
originator  medicines,  generic/hybrid/biosimilar  medicines,  or  different 
types  of 
products), wholesalers and different types of pharmacies: online pharmacies, mail order 
pharmacies, traditional ‘brick and mortar’ pharmacies and hospital pharmacies: 

−  Originators  are  active  in  research,  development,  manufacturing,  marketing,  and  the 
supply of innovative medicines. They typically compete ‘for the market’ by trying to 
be the first to discover, patent and bring to the market a new medicine, but originator 
drugs  of  different  active  ingredients  may  also  compete  against  each  other  ‘in  the 
market’ on price, quality and choice.  

−  Manufacturers  of  generic  products  supply  non-innovative  generic  versions  of  the 
originator medicine after the originators lose exclusivity, often at significantly lower 
prices.  A  generic  product  has  the  same  qualitative  and  quantitative  composition  in 
active  substance  and  the  same  pharmaceutical  form  (e.g.  tablet,  injectable)  as  an 
originator product that has already been authorised (the ‘reference medicine’), and its 
bioequivalence with the reference medicine has been demonstrated by bioavailability 
studies. (40).  Since  they  treat  the  same  disease  as  the  reference  medicine,  generic 
medicines  compete  to  win  market  shares  from  originator  drugs  (or  from  other 
generics already on the market), mainly through price competition. In cases where the 

(39)  In  some  Member  States,  hospitals  also  procure  medicine  that  is  then  dispensed  in  the  hospital 

pharmacy. 

(40)   Article  10(2)(b)  of  Directive  2001/83/EC  of  the  European  Parliament  and  of  the  Council  of  6 
November  2001  on  the  community  code  relating  to  medicinal  products  for  human  use  (OJ  L  311, 
28.11.2004, p.67).  

19 

 
 
medicinal product does not fall within the definition of a generic medicinal product 
(e.g.  because  it  has  a  different  strength,  a  different  route  of  administration  or  a 
slightly  different  therapeutic  indication  compared  to  the  reference  medicine)  and 
bioequivalence cannot be demonstrated through bioavailability studies, authorisation 
will depend partly on the results of tests on the reference medicine and partly on new 
data from clinical tests. Such medicines are called ‘hybrid medicines’ (41). 

Biosimilars (42)  are  medicines  highly  similar  to  another  biological  medicine  already 
marketed in the EU (the ‘reference medicine’), but unlike the molecules of classical 
medicines,  which  are  smaller  and  chemically  synthesised,  the  much  more  complex 
biological medicines (43) are extracted or synthesised from biological sources (such as 
living cells or organisms) in conditions that do not allow the reference product to be 
fully replicated (due to  different cell  cultures, secret  process  know-how,  etc.).   In  a 
joint statement authorities of the Member States confirmed that the experience with 
approved  biosimilar  medicinal  products  over  the  past  15  years  has  shown  that  in 
terms of efficacy, safety and immunogenicity they are comparable to their reference 
medicinal  product  and  are  therefore  interchangeable  and  can  be  used  instead  of  its 
reference  product  (or  vice  versa)  or  replaced  by  another  biosimilar  of  the  same 
reference product (44). 

Some  manufacturers  supply  originator  as  well  as  generic,  hybrid  or  biosimilar 
products.  These  companies  develop  distinct  business  strategies  for  each  type  of 
product. 

−  Wholesalers  organise 

the  distribution  of  pharmaceuticals  by  purchasing 
pharmaceutical  products  from  manufacturers  and  selling  them  to  pharmacies  and 
hospitals. 

−  The  different  types  of  pharmacies  fulfil  the  dual  role  of  advising  patients  and 

dispensing them the required medicines. 

Member States play a significant role in this highly regulated sector – depending on the 
national  system,  various  agencies  may  administer  the  granting  of  the  marketing 
authorisation, pricing, procurement, reimbursement and substitution of pharmaceuticals. 
By setting regulations, governments aim to achieve several goals such as (i) ensuring the 
quality,  safety,  efficiency  and  efficacy  of  pharmaceuticals;  (ii)  making  pharmaceuticals 
affordable  to  everyone  by  negotiating  prices  and  setting  up  public  health  insurance 

(41)  Art. 10(3) of Directive 2001/83/EC. 

(42)  Biosimilars in the EU: Information Guide for Healthcare professionals, European Medicines Agency, 

2019 (Prepared jointly by the European Medicines Agency and the European Commission). 

(43)  Biological  drugs  are  among  the  most  expensive  therapies,  and  their  uptake  is  steadily  increasing 
(biologics  represented  35 %  of  medicine  spending  in  2022).  In  turn,  as  patent  protection  for  some 
major  biologicals  is  coming  to  an  end,  increased  uptake  of  biosimilar  medicines  is  expected  to 
generate cost savings for national healthcare systems. However, for various reasons – such as inferior 
degree of  substitution  compared  to  generics  –  these  cost  savings  seem  more  difficult  to achieve  via 
traditional  competition  mechanisms.  Nevertheless,  by  2022,  the  number  of  new  biologic  molecules 
with a biosimilar had doubled in five years compared to the ten years prior, and in 2022 a total of 18 
molecules  had  direct  biosimilar  competition  and  had  an  average  of  3.8  competitors  authorised. 
(Source: The Impact of Biosimilar Competition in Europe, December 2022, IQVIA). 

(44)  Statement on the scientific rationale supporting interchangeability of biosimilar medicines in the EU, 

21 April 2023, EMA/627319/2022. 

20 

 
 
schemes;  (iii)  promoting  innovation  and  medical  research,  including  improving  the 
security of supplies and prevention of shortages. 

Figure 4 below illustrates the complex system of demand and supply in  pharmaceutical 
markets. 

Figure 4: Demand and supply in pharmaceutical markets 

3.2.  The legislative and regulatory framework shapes competitive dynamics 

Competition  in  pharmaceutical  markets  depends  on  multiple  factors,  including  R&D 
activity, marketing authorisation requirements, access to capital (45), intellectual property 
rights,  pricing  regulation,  promotional  efforts,  commercial  risks  etc.  A  thorough 
understanding of these factors is necessary to assess whether certain conduct or a specific 
transaction  is  anti-competitive.  It  is  also  key  to  understanding  what  constitutes  the 
relevant market – a key concept in competition law analysis.  

Box 6: Definition of relevant markets for pharmaceuticals 

The  definition  of  the  relevant market (46)  serves to identify the  sources  of  competitive  pressure 
that  can  constrain  the  investigated  parties.  The  relevant  market  comprises  both  the  product 
dimension  (which  other  products  exert  effective  and  immediate  competitive  pressure  on  the 
investigated  product)  and  the  geographic  dimension  (the  area  in  which  the  conditions  of 

(45)  The  European  Investment  Bank  has  provided  total  financing  of  more  than  EUR  42  billion  for 
healthcare-related projects since it started investing in the sector in 1997. Due to Covid-19, financing 
has been considerably higher in recent years than it was before the pandemic. In 2022, for instance, 
the EIB provided EUR 5.1 billion for health and life sciences projects. The European Investment Fund 
(EIF), a subsidiary of the EIB Group that specialises in providing risk finance to small and medium-
sized businesses, committed some EUR 400 million to funds that are expected to support the health 
sector. 
2023, 
https://www.eib.org/attachments/lucalli/20220314_health_overview_2023_en.pdf). 

publication: 

Investment 

(European 

Overview 

Health 

Bank 

(46)  Commission  notice  on  the  definition  of  the  relevant  market  (OJ  C  372,  9.12.1997,  p.  5-13).  The 
https://competition-
being 

Commission 
policy.ec.europa.eu/public-consultations/2022-market-definition-notice_en). 

currently 

revised 

notice 

also: 

(see 

is 

21 

 
 
 
competition  are  sufficiently  similar  for  the  effects  of  the  conduct  or  concentration  under 
investigation  to  be  able  to  be  assessed).  To  understand  which  medicines  belong  to  the  same 
market, authorities may  need to assess both demand side substitution (e.g. whether prescribers, 
patients  and  payers  would  readily  switch  from  one  product  to  another)  and  supply  side 
substitution  (the  existence,  or  not,  of  suppliers that could and  would  have the  incentive  to  also 
start producing the medicine(s) at issue in the short term and with insignificant additional sunk 
costs), where appropriate). 

The  market  definition,  i.e.  identifying  the  sources  of  effective  and  immediate  competitive 
pressure,  enables  competition  authorities  to  assess,  at  a  second  stage,  whether  the  investigated 
company enjoys market power, or dominance, and whether the conduct being investigated would 
be likely to harm competition rather than being offset by offers from the remaining competitors. 

With  regard  to  identifying sources  of  competitive  pressure  that  constrain  a  marketed medicine, 
understanding  which  other  products  are  therapeutically  substitutable  is  a  necessary  first  step  in 
identifying relevant competing medicines. However, it is settled case-law of the Court of Justice 
that  “interchangeability  or  substitutability  is  not  assessed  solely  in  relation  to  the  objective 
characteristics of the products and services at issue. There must also be taken into consideration 
the conditions of competition and the structure of supply and demand on the market”. (47) Only 
medicines  that  are  actually  able  to  constrain  the  investigated  product  can  be  considered  as 
belonging  to  the  same  product  market.  For  example,  if  the  positioning  of  a  medicine  (price, 
quality, innovation value, promotion through marketing) is geared against losing prescriptions to 
another medicine with a different molecule, this  would be an indication that the products based 
on two different molecules are likely in the same market. However, if the main competitive threat 
comes  from  generic  versions  of  a  certain  molecule,  which  contain  the  same  molecule,  and  the 
pressure  from  medicines  containing  other  molecules  is  significantly  weaker,  this  may  indicate 
that  the  market  is  narrower  and  limited  to  the  investigated  molecule  alone.  The  degree  of 
competitive pressure faced by a medicine is naturally dynamic and may change with the entry of 
new products, e.g. the entry or imminent entry of a generic version of a medicine may change the 
competitive  landscape  for the  originator  drug. (48)  The  competitive  landscape  not  only  depends 
on  the  availability  of  substitutable  medicines,  but  is  to  a  large  extent  affected  by  pricing  and 
reimbursement regulation (49). 

3.2.1. Product life-cycle and the evolving nature of competition driven by regulation 

The  focus  of  competition  law  scrutiny,  whether  in  merger  control  or  in  antitrust 
investigations, will vary depending on the stage of the product life-cycle. Life-cycles of 
medicines are relatively long and comprise three main phases as shown in Figure 5. 

(47)  Judgment  of  the  Court  of  Justice  of  30  January  2020,  Generics  (UK)  and  Others,  C-307/18, 

EU:C:2020:52, paragraph 129 and the case law cited. 

(48)  See Case C-307/18, Generics (UK) and Others, paragraphs 130-131. 

(49)  See section 3.2.2. 

22 

 
 
Figure 5: Pharmaceutical product life-cycle 

The  life-cycle  of  a  new  drug  begins  with  a  new  compound  (either  small  or  large 
molecule,  such  as  biologics),  which  is  usually  discovered  through  basic  research 
conducted  by  originator  manufacturers  or  independent  research  facilities  (universities, 
specialised  laboratories),  often  supported  by  public  funding.  Originator  manufacturers 
then test whether a pharmaceutical product containing the candidate compound would be 
safe  and  effective.  During  the  development  stage,  the  candidate  medicines  are  first 
assessed  in  laboratory  tests  (including  on  animals)  in  the  so-called  pre-clinical  stage, 
followed by the clinical trials (on humans) which comprise three phases. 

Once studies have shown that a new medicine is effective and safe, the company applies 
for a marketing authorisation (‘MA’) to the regulatory agency. This could be either the 
European Medicines Agency (‘EMA’) or a national authority. 

Following  approval  of  a  medicine,  further  trials  (phase  4  trials  or  ‘post  marketing 
surveillance’)  often  continue  to  generate  data  to  further  increase  understanding  of  the 
performance of the medicine. If a medicine goes on to demonstrate an unacceptable level 
of risks for the benefits it provides, regulatory authorities can issue warnings leading to 
changes in the patient leaflet or can still remove the medicine's license at this stage. 

The  development  cycles  for  innovative  drugs  are  usually  risky  and  lengthy  and  entail 
high  development  costs (50).  Moreover,  only  a  small  minority  of  candidate  molecules 
survive the development stage and finally make it to the market.  

In pre-launch phases – both pre-clinical and clinical – developing new medicines may be 
a source of competitive pressure for existing medicines as well as for other medicines in 

(50)  Estimates  suggest  that  the  costs  of  bringing  a  medicine  from  the  lab  to  the  market  are  between 
EUR 0.5  billion  and  EUR  2.2  billion.  Copenhagen  Economics,  Study  on  the  economic  impact  of 
supplementary  protection  certificates,  pharmaceutical  incentives  and  rewards  in  Europe,  Final 
Report,  May 
https://ec.europa.eu/health/sites/health/files/human-
use/docs/pharmaceuticals_incentives_study_en.pdf. 

available 

2018, 

at: 

23 

 
 
 
development. Once on the market, new medicines strive to secure prescriptions by either 
diverting  demand  from  other  medicines  or  by  creating  new  demand  from  patients  and 
health  care  professionals  for  that  type  of  medicine,  for  example  by  addressing  a 
previously unmet medical need. At this stage, competitive pressure comes primarily from 
other  similar  medicines.  When  the  original  medicine  is  close  to  losing  exclusivity  (e.g. 
loss  of  patent  protection),  pressure  from  generic,  hybrid  or  biosimilar  versions  of  the 
same  medicine  starts  to  build  up.  Upon  their  entry,  the  originator  may  lose  significant 
sales volumes and average market prices may drop dramatically.  

Developing new medicines – competition on innovation 

The pharmaceutical industry is one of the most R&D-intensive industries in the EU and 
worldwide (51). Innovation is driven by the demand for new, more effective and/or safer 
treatments  for  patients,  the  life-cycles  of  medicines,  and  the  threat  of  competition, 
especially  generic  competition  after  loss  of  exclusivity. (52)  As  patients  are  gradually 
switched  to  newer  alternative  treatments,  or  cheaper  generic  versions,  the  originator 
companies cannot indefinitely appropriate profits from past innovative products but need 
to  invest  in  new  innovative  products  so  that  they  are  not  outcompeted  by  rival 
innovation. The continued process of investment in R&D, to which competition makes a 
vital contribution, therefore leads to the discovery of new or improved medicines to the 
benefit of both patients and society as a whole.  

Market exclusivity for new medicines is limited in time 

Given  the  high  development  costs  and  the  fact  that,  once  a  new  medicine  has  been 
developed,  it  is  relatively  easy  for  rivals  to  copy  it,  legislation  grants  originator 
companies  various  exclusivity  mechanisms  that  are  designed  to  provide  them  with 
incentives  to  invest  in  new  R&D  projects.  A  common  feature  of  these  exclusivities  is 
however that they are limited in time, and thus allow the entry of generic medicines at the 
end of the exclusivity. 

The  substance  (active  ingredient)  in  an  originator  medicine  may  be  patented  and  such 
patents  are  often  referred  to  as  ‘compound’  or  ‘primary’  patents.  If  this  is  the  case,  no 
competitor  can  sell  a  medicine  containing  the  same  active  ingredient  which  is  patent 
protected without the consent of the patent owner. Patent protection can be extended by 
supplementary protection certificates (‘SPCs’) which aim to compensate for the period of 
patent  protection  lost  by  the  pharmaceutical  innovator  due  to  the  lenghty  regulatory 
procedures needed to obtain MA for the new medicinal product. There can also be other 
protection instruments granting exclusivity (see Box 7 below).  

While the medicine is on the market, manufacturers  may carry out further research and 
clinical studies to develop new medical uses for the medicine. Furthermore, they usually 
continue  to  improve  their  manufacturing  processes,  pharmaceutical  form,  and/or 
composition  (different  salts,  esters,  crystalline  forms  etc).  Manufacturers  may  seek  to 
protect  these  improvements  by  patenting  them.  Such  patents,  often  called  ‘secondary 

(51)  In  2017,  the  spend  on  new  R&D  equalled  13.7 %  of  sales  in  pharmaceuticals  and  24 %  in 
biotechnology  (European  Commission,  Industrial  Research  and  Innovation,  The  2017  EU  Industrial 
R&D 
) 
https://iri.jrc.ec.europa.eu/sites/default/files/contentype/scoreboard/2022-
12/EU%20RD%20Scoreboard%202022%20FINAL%20online_0.pdf. 

Scoreboard, 

Investment 

edition, 

Table 

2022 

page 

(e.g. 

11) 

1.2 

(52)  On exclusivities see Box 7 and the following Section. 

24 

 
 
patents’, may make it more difficult for generics to enter the market soon after the active 
ingredient  has  lost  its  market  exclusivity,  as  other  characteristics  of  the  originator 
medicine are still patented. 

Box 7: Patents and other exclusivities provide a period of protection 

Patents provide the innovator (originator) with an exclusive right to prevent any third party from 
using  an  invention  for  up  to  20  years  from  the  date  of  filing  of  a  patent  application.  A 
manufacturer usually  applies  for the  patent  on  a  novel medicine  very early in the  development 
process so that the 20-year patent protection period starts long before the drug enters the market. 
SPCs can then extend the period of patent protection for a novel medicine by up to 5 years. 

Originator  medicines  can  also  benefit  from  market  and  data  exclusivity.  During  this  data 
exclusivity  period,  generic  or  biosimilar  producers  cannot  apply  for  an  MA  for  the  generic  or 
biosimilar version of the same medicine by way of a MA procedure, which relies in part on the 
data submitted for the originator medicine.  

To  encourage research, development and commercialisation  of treatments  for rare  diseases, the 
pharmaceutical regulations provide for market exclusivity for so called orphan medicines, which 
means that similar medicines for the same therapeutic indication cannot apply for nor be granted 
a marketing authorisation, for a specified period (and as a result enter the market), which may run 
either in parallel or not with a patent protection. When medicines are adapted to meet the medical 
needs  of  children  (paediatric  medicines),  this may  also  be  rewarded  by  an  additional  period  of 
exclusivity (SPC, data or market exclusivity). 

Loss of protection and generic or biosimilar competition 

The  limitation  in  time  of  all  protection  instruments  is  fundamental  for  dynamic 
competition,  as  it  balances  the  incentives  to  innovate  from  market  exclusivity  and  the 
subsequent threat of generic or biosimilar  competition with increased access to cheaper 
medicines  after  loss  of  exclusivity.  Competitive  pressure  from  generics  or  biosimilars 
may be significantly different and stronger than pressure from other originator medicines.  

Most  Member  States  have  regulatory  mechanisms  to  encourage  the  prescription  and/or 
dispensing  of  generic  or  biosimilar  medicines  instead  of  the  more  expensive  originator 
medicine.  Once  a  generic  or  biosimilar  medicine  enters  the  market,  these  mechanisms 
lead to stronger price competition from generics or biosimilars and to important shifts in 
volumes  of  product  sold  from  the  originator  to  the  generic/biosimilar,  potentially  even 
threatening  the  entire  patient  population  of  the  originator.  As  a  result,  the  entry  of 
cheaper  generics/biosimilars  tends  to  slash  the  sales  of  the  originator  medicine  and 
average prices, and is a key driver of cost savings for healthcare systems and of greater 
access  to  medicines  for  patients.  For  various  reasons  as  explained  below,  such  cost 
savings seem more difficult to achieve for biosimilars than for generics. Nevertheless, by 
2022, the number of new biologic molecules with a biosimilar had doubled in five years 
compared to the ten years prior. (53) 

Unlike competition between medicines based on different molecules, a generic medicine 
contains the same active ingredient, is marketed in the same dosages, and treats the same 
indications  as  the  originator  medicine,  and  thus  competition  is  between  homogeneous 
products.  

(53)  In  2022  a  total  of  18  molecules  had  direct  biosimilar  competition  and  had  an  average  of  3.8 
competitors  authorised.  (Source:  The  Impact  of  Biosimilar  Competition  in  Europe,  December  2022, 
IQVIA). 

25 

 
 
While the competitive dynamics between original biological medicines and biosimilars is 
similar to that between originator medicines and generic medicines, biological products 
have a number of distinctive features which may lead to a more limited uptake or lesser 
price reductions compared to generics. As explained above in Section 3.1, biosimilars are 
not exact copies of reference medicines. Due to the inherent differences in all biological 
medicines,  there  is  also  room  for  differentiation  strategies  and  non-price  competition 
between  distinct  biosimilars  of  the  same  molecule.  This  complexity  leads  to  higher 
barriers  to  entry  for  biosimilars  compared  to  classical  generics.  In  2023,  the  EMA 
emitted a general statement on the scientific principle highlighting that biosimilars can be 
used interchangeably and detailing the scientific references supporting this position. 

Box 8: Interchangeability of biosimilar medicines in the EU 

The  EMA  and  the  national  Heads  of  Medicines  Agencies  (‘HMA’)  have  emphasised  that 
biosimilars approved in the EU are interchangeable from a scientific viewpoint, meaning that a 
biosimilar can be used instead of its reference  biologic product, or vice versa. (54) A biosimilar 
can  likewise  be  used  in  place  of  another  biosimilar  of  the  same  reference  product.  Any 
interchange  should,  however,  only  take  place  after  careful  consideration  of  the  product 
information. 

EU  experts  consider  that  when  approval  for  a  biosimilar  is  granted  in  the  EU,  additional 
systematic  switch  studies  are  not  required  to  support  the  interchangeability.  Considering  the 
available  scientific  evidence  and  the  successful  experience  with  biosimilars  in  clinical  practice 
over the years, the HMA and the EU experts Working Party on biosimilar medicines support that 
medicines approved as biosimilars in the EU may be prescribed interchangeably. This will allow 
more  patients  to  have  access  to  biological  medicines  necessary  for  treating  diseases  such  as 
cancer, diabetes and rheumatic diseases. Member States will continue to decide which biological 
medicines  are  available  for  prescribing  in  each  territory  and  whether  automatic  substitution  is 
allowed at pharmacy level. 

In  addition  to  stimulating  price  competition,  generic  and  biosimilar  entry  also  helps  to 
foster  innovation.  First,  after  the  expiry  of  various  exclusivities  (such  as  patents,  SPC, 
market  and  data  exclusivity),  the  knowledge  behind  the  innovation  (disclosed  in  patent 
applications  and  MA  files)  can  be  freely  used  by  other  innovators  to  develop  and 
commercialise new products. Second, the entry of cheaper generic or biosimilar products 
disrupts the innovators’ ability to benefit from high revenues owing to market exclusivity 
and  will  therefore  encourage  the  originator  company  to  continue  investing  in  R&D  for 
pipeline  products  in  order  to  secure  future  revenue  streams.  Generic/biosimilar 
competition therefore not only results in lower prices for older medicines, but also acts as 
a disciplining force that compels originator companies to continue to innovate. 

Companies  may  occasionally  attempt  to  misuse  the  regulatory  system  which  grants 
patent  or  exclusivity  protection  to  gain  additional  time  before  competing  products  can 
enter  the  market.  In  addition  to  judicial  and  regulatory  control,  competition  authorities 
also  have  a  role  to  play  in  such  scenarios  to  ensure  that  incentives  to  innovate  are  not 
distorted and that healthcare systems are not worse off as a result of companies unduly 
obstructing competition to protect their revenues. Finally, it is important for generics and 
biosimilars  manufacturers  to  be  able  to  anticipate  when  patents  and  other  exclusivities 
protecting  an  originator  drug  expire  in  order  to  viably  enter  and  compete  on  a  given 
market.  

(54)  Statement on the scientific rationale supporting interchangeability of biosimilar medicines in the EU, 

21 April 2023, EMA/627319/2022. 

26 

 
 
3.2.2. Pricing  and  reimbursement  rules  strongly  impact  competition  between 

medicines  

In  most  Member  States,  the  manufacturers  must  undergo  pricing  and  reimbursement 
procedures  before  marketing  prescription  medicines.  Pricing  and  reimbursement  rules 
and  policies  remain  an  exclusive  competence  of  Member  States.  Regulation,  public 
procurement  and  related  negotiations  influence  the  price  of  a  medicine.  This  goes  both 
for originator, generic or biosimilar medicines. 

Member  States  have  opted  for  different  pricing  schemes  that  are  typically  based  on 
negotiations between healthcare bodies of the Member States and manufacturers. These 
in turn may be coupled with (i) references to the price of the medicine in other Member 
States; (ii) considering the additional benefit brought about by the medicine as assessed 
following  a  ‘health  technology  assessment’;  or  (iii)  a  combination  of  the  above.  Even 
where  initial  prices  are  not  subject  to  specific  mechanisms,  medicines  will  in  general 
only be reimbursed up to a certain amount. 

To  tap  into  the  potential  for  cost  savings,  most  Member  States  introduce  measures  to 
encourage  price  competition  between  equivalent  medicines.  For  instance,  dispensing 
cheaper  generic  or  biosimilar  products  can  be  stimulated  by  rules  that  require  generic 
prescriptions  by physicians (prescribing a molecule rather than a specific  brand) and/or 
by authorising pharmacists to dispense the cheapest (generic) version of the medicine. In 
genericised  markets,  health  insurers  may  also  organise  tenders  to  select  the  cheapest 
supplier for a given medicine. 

The  regulator  can  facilitate  price  competition  between  therapeutically  substitutable 
medicines,  for  example  by  only  reimbursing  the  costs  of  the  cheapest  product  in  a 
therapeutic class (i.e., groups of medicines which have different active ingredients but are 
used  to  treat  the  same  condition)  and  thereby  spark  a  higher  degree  of  economic 
substitution  (switching  patients  to  interchangeable  but  less  costly  medicines).  Such 
measures  may  profoundly  transform  the  nature  and  intensity  of  competition  for 
alternative medicines, as suppliers are no longer protected from price-driven competition 
from therapeutic alternatives. 

3.2.3. The reform of the EU pharmaceutical legislation and Pharmaceutical Strategy 

for Europe 

On  26  April  2023,  the  European  Commission  adopted  a  'pharmaceutical  package'(55) 
proposing to the Council and the European Parliament to revise the EU's pharmaceutical 
legislation,  based  on  preparatory  work  in  the  period  since  the  adoption  of  the 
Pharmaceutical Strategy for Europe in 2020(56) . The package is composed of proposals 
for  a  new  directive  and  a  new  regulation,  which  would  replace  the  existing 
pharmaceutical  legislation,  including  the  legislation  on  medicines  for  children  and  for 

(55)  https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12963-Revision-of-the-EU-

general-pharmaceuticals-legislation_en 

(56)  Communication from the Commission, Pharmaceutical Strategy for Europe (COM/2020/761 final). 

27 

 
 
rare diseases. The package also contains a Council recommendation to step up the fight 
against antimicrobial resistance (57) and a communication (58). 

The proposed revision of the pharmaceutical legislation aims at making medicines more 
accessible (in all Member States), available (to address risks of shortages), and affordable 
(to  national  health  systems  and  patients),  while  supporting  competitiveness  of  the  EU 
pharmaceutical  industry,  combatting  antimicrobial  resistance,  and  ensuring  higher 
environmental standards of medicines.  

The proposals include measures that promote patient access to medicines in all Member 
States, a long-standing request from the Council. This would notably be done through a 
system  of  modulation  of  incentives.  The  reform  aims  to  support  the  development  of 
medicines  by  incentivising  all  innovative  medicines  with  a  set  of  standard  incentives 
(data  and  market  protection  for  all  innovative  medicines  and  data  exclusivity  for 
medicines for rare diseases) that remain internationally competitive. In addition, it would 
reward  companies  with  additional  periods  of  data  protection  when  the  medicine  is 
supplied  in  all  Member  States  in  which  the  marketing  authorisation  is  valid.  The 
proposed  reform  does  not  affect  the  EU’s  system  of  intellectual  property  rights  or 
supplementary protection certificates which remain an essential element of protection of 
innovation in the EU. 

The proposals also include measures to promote innovation in the areas of unmet medical 
need. Medicines addressing an unmet medical need would receive an additional period of 
data  protection  and  EMA  would  also  provide  early  regulatory  and  scientific  support  to 
companies  for  promising  medicines  under  development  addressing  an  unmet  medical 
need.  

The revision also addresses medicines shortages and enhances security of supply, at all 
times, building on and strengthening the systems and processes that were established in 
the EMA’s extended mandate Regulation.  

Affordability for healthcare systems and patients in the EU would be enhanced through 
different measures. First, the reform would facilitate earlier market entry of generics and 
biosimilar medicines by speeding up market entry after the expiry of the patent protection 
of  the  originator  (the  extended  and  harmonised  so-called  Bolar  exemption (59)  and  the 
change  in  orphan  market  exclusivity  rules  making  filing  of  application  possible  before 
market exclusivity expires), which increases competition and reduces prices. It also aims 
to incentivise the generation of comparative clinical data through an additional period of 
data protection to support Member States to take timely and evidence-based decisions on 
pricing and reimbursement. It moreover contains measures on transparency around public 
funding  for  medicine  development,  which  will  support  Member  States  in  their 

(57)  Council  Recommendation  on  stepping  up  EU  actions  to  combat  antimicrobial  resistance  in  a  One 

Health approach 2023/C 220/01 (OJ C 220, 22.6.2023, p. 1). 

(58)  Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions - Reform of the pharmaceutical 
legislation and measures addressing antimicrobial resistance (COM/2023/190 final). 

(59)  The  EU  Bolar  exemption  (laid  down  in  Article  10(6)  of  Directive  2001/83/EC  and  Article  41  of 
Regulation (EU) 2019/6 (formerly Article 13(6) of Directive  2001/82/EC)) states that, under certain 
conditions, procedures such as production of samples which are necessary for regulatory approval do 
not infringe the existing patent right or protection certificate for medicinal products. 

28 

 
 
negotiations  with  pharmaceutical  companies  and  ultimately  make  medicines  more 
affordable.  

The pharmaceutical package is the biggest building block of the Pharmaceutical Strategy 
for  Europe adopted  in  November  2020  and  composed  of  55  action  points.  The 
Pharmaceutical  Strategy  for  Europe  aims  at  creating  a  future-proof  and  patient-centred 
pharmaceutical environment in which the EU industry can innovate. The Pharmaceutical 
Strategy for Europe is also taking non-legislative actions to support cooperation among 
Member  States  on  pricing,  reimbursement,  and  procurement  policies  through  exchange 
of  information  and  best  practices  through  the  group  of  National  Competent  Authorities 
on Pricing and Reimbursement and Healthcare payers. 

Both  the  reform  of  the  EU  pharmaceutical  legislation  and  the  Pharmaceutical  Strategy 
are central  pillars of  a strong  European  Health  Union (60). They  will complement other 
key initiatives, including the reinforcement of the EU health security framework with the 
new  legislation  on  cross-border  threats  to  health  and  stronger  mandates  for  EU  health 
agencies,  the  establishment  of  the  Health  Emergency  Preparedness  and  Response 
Authority  (HERA)  as  well  as  Europe’s  Beating  Cancer  Plan  and  the  European  Health 
Data Space. 

4.  COMPETITION LAW PROTECTS UNDERTAKINGS AND CONSUMERS ALSO IN TIMES OF 

COVID CRISIS 

From March 2020 through to 2022, businesses within the EU faced particular challenges 
due to the consequences of the Covid-19 pandemic. However, many of these businesses 
were  in  a  position  to  play  a  crucial  role  in  mitigating  the  effects  of  the  crisis.  The 
exceptional  circumstances  and  the  related  challenges  sometimes  triggered  a  need  for 
companies to cooperate with each other in order to ensure the supply and fair distribution 
to all consumers of essential and possibly scarce products and services.  

In  response  to  this  need,  the  Commission,  the  NCAs  and  the  EFTA  Surveillance 
Authority  issued  on  23  March  2020  a  joint  statement  on  the  application  of  the  EU 
antitrust  rules  during  the  Covid-19  pandemic,  explaining  how  competition  authorities 
could  help  companies  deal  with  the  crisis. (61)  The  statement  clarified  that  the  ECN 
would  not  actively  intervene  against  necessary  and  temporary  measures  put  in  place  in 
order to avoid a shortage of supply, but that it would, however, not hesitate to take action 
against companies taking advantage of the crisis situation by cartelising or abusing their 
dominant  position.  In  this  context,  the  ECN  pointed  out  that  the  existing  rules  allowed 
manufacturers  to  set  maximum  prices  for  their  products,  which  could  prove  useful  to 
limit unjustified price increases at the distribution level. 

(60)  https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/promoting-our-european-way-

life/european-health-union_en. 

(61)  https://competition-policy.ec.europa.eu/system/files/2021-03/202003_joint-statement_ecn_corona-

crisis.pdf.  A  similar  statement  by  the  International  Competition  Network  was  published  on  8  April 
2020: 
https://www.internationalcompetitionnetwork.org/wp-content/uploads/2020/04/SG-
Covid19Statement-April2020.pdf. 

29 

 
 
4.1.  Commission  guidance  on  antitrust  rules  to  companies  cooperating  in 

response to the Covid-19 outbreak  

During  the  Covid-19  period,  the  Commission  was  available  to  provide  guidance  to 
companies, associations and their legal advisors regarding specific cooperation initiatives 
with  an  EU  dimension  that  needed  to  be  swiftly  implemented  during  the  coronavirus 
pandemic,  and  where  there  was  uncertainty  about  whether  such  initiatives  were 
compatible  with  EU  competition  law.  On  8  April  2020,  the  Commission  adopted  a 
Temporary  Framework  Communication (62),  setting  out  the  main  criteria  for  assessing 
cooperation projects aimed at addressing a shortage of supply of essential products and 
services during the  coronavirus outbreak. The document also  foresaw the possibility of 
providing  companies  with  written  comfort  (via  ad  hoc  “comfort  letters”)  on  specific 
cooperation projects falling within the scope of the Temporary Framework (63).  

During  the  Covid-19,  crisis  two  comfort  letters  were  adopted  under  the  Temporary 
Framework. The comfort letter sent on 8 April 2020 to “Medicines for Europe” (64), an 
association  of  pharmaceutical  manufacturers,  concerned  a  voluntary  cooperation  to 
address  the  risk  of  shortages  of  critical  intensive  care  medicines  for  the  treatment  of 
Covid-19  patients  by  significantly  increasing  the  production  capacity  of  Covid-19 
medicines.  The  temporary  cooperation  appeared  justifiable  under  EU  antitrust  law,  in 
view  of  its  objective  –  jointly  to  increase  rather  than  to  decrease  output  –  and  the 
safeguards put in place to avoid anticompetitive concerns.  

On 25 March 2021, the Commission issued a further comfort letter (65), addressed to co-
organisers of a pan-European matchmaking event, which aimed at addressing bottlenecks 
in  the production of  Covid-19 vaccines  and  accelerating the use of  additional  available 
capacities  across  Europe.  The  comfort  letter  identified  the  conditions  under  which 
exchanges  of  information  between  the  companies,  including  direct  competitors,  could 
take place in compliance with the EU competition rules. 

4.2.  Commission coordination and initiatives of national competition authorities  

In the spirit of the common ECN statement described above, the European competition 
authorities  took  numerous  initiatives  and  provided  guidance  to  businesses  to  safeguard 
access  to  essential  medical  products  and  services  while  ensuring  compliance  with 
competition rules. The initiatives described below are just a few examples of their intense 
activity, frequently in coordination with the Commission, during the challenging Covid-
19 crisis. 

Following media reports, the Dutch NCA in 2020 launched an investigation into Roche 
Diagnostics in connection with expanding test capacity in the Covid-19 crisis. According 
to  the  information  in  the  media  reports,  Roche  withheld  the  recipe  for  its  lysis  buffers 
used  for  its  PCR  Covid-19  tests,  making  it  difficult  for  laboratories  to  make  their  own 

(62)  Commission  Communication  on  Temporary  Framework  for  assessing  antitrust  issues  related  to 
business  cooperation  in  response  to  situations  of  urgency  stemming  from  the  current  COVID-19 
outbreak (OJ C 116I, 8.4.2020, p. 7). 

(63)  https://ec.europa.eu/commission/presscorner/detail/en/IP_20_618.  

(64)  chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://competition-

policy.ec.europa.eu/system/files/2021-03/medicines_for_europe_comfort_letter.pdf. 

(65)   https://competition-policy.ec.europa.eu/document/5cfbb468-decb-4ca5-b583-f3764773209f_en  

30 

 
 
reagent solution to use in Roche’s PCR testing machines. Upon information requests and 
discussion  with  the  NCA,  government  agencies  and  experts,  Roche  committed  to  the 
NCA  to  doing  everything  it  could  to  enable  hospitals  and  laboratories  to  carry  out  as 
many tests as possible and to eliminate any obstacles as much as possible. In this process, 
the NCA worked closely together with the Commission. (66)  

The Greek NCA set up a special Covid Task Force and took action against potential price 
fixing: 

–  In March 2020, the Greek NCA set up a “Covid-19_Competition Task Force” to fight 
anticompetitive  practices. (67)  Its  task  was  to  provide  businesses  and  citizens  with 
information about the application of competition rules and inform the public about the 
investigations  and  procedural  matters  carried  out  by  the  NCA.  One  of  the  primary 
objectives  of  this  Task  Force  was  to  create  a  hub  collecting  questions  raised  by 
different institutions and businesses, concerning the initiatives they intend to take and 
their  compatibility  with  competition  law,  as  well  as  to  ensure  immediate  response 
thereto. 

–  In  September  2021,  the  Government  set  price  caps  for  Covid-19  diagnostic  tests 
carried  out  in  private  diagnostic  laboratories,  private  clinics,  pharmacies,  and  other 
retail  outlets.  However,  the  Panhellenic  Pharmaceutical  Association  (“PPA”)  issued 
guidelines to its members (i.e. local associations of pharmacists) which suggested that 
the price cap for rapid tests set by the Government at EUR 10 was a fixed price, thus 
possibly removing competition to offer the tests  at a lower price. Instead of opening 
an investigation, the Greek NCA sent a warning letter to the PPA which reiterated that 
the price caps imposed by the Government should be understood as maximum and not 
as  fixed  prices  and  instructed  the  PPA  to  (a)  publicly  repeal  its  guidelines,  (b) 
distribute the NCA’s letter to  its members and post  it on its website. The  NCA also 
made  a  public  statement  which  clarified  that  the  price  caps  imposed  by  the 
Government  represented the maximum, but  not  a fixed price, and invited citizens to 
report any anti-competitive conduct that would come to their attention. (68) Pursuant to 
the  NCA’s  instructions,  the  PPA  sent  letters  to  its  members  and  published  modified 
guidelines. 

in 

In March 2021, the  German NCA gave the green light  for the participation  of full-line 
pharmaceutical  wholesalers 
the  “VCI  Emergency  Platform  for  Vaccination 
Equipment”.  The  platform  was  launched  with  the  NCA’s  approval  to  better  coordinate 
the supply of vaccination equipment  (syringes,  cannulas, and NaCI solution).  The B2B 
platform  enabled  the  federal  Länder  and  manufacturers  of  vaccination  equipment  to 
exchange  information  on  their  current  supply  situation  and  their  capability  to  deliver. 
This  transparency  was  supposed  to  help  better  coordinate  the  supply  chain  in  order  to 
prevent shortages or misallocation of vaccination equipment. The platform did not allow 
for  the  provision  of  any  details  on  the  prices  and  quantities  of  the  suppliers  and  its 
duration was limited to the emergency situation at that time.  

(66)  https://www.acm.nl/en/publications/acm-has-confidence-commitments-made-roche-help-solve-

problems-test-materials  

(67)  https://www.epant.gr/en/enimerosi/press-releases/item/858-press-release-covid-19-task-force-to-fight-

anticompetitive-practices.html. 

(68)  https://www.epant.gr/en/enimerosi/press-releases/item/1604-press-release-pricing-of-pcr-and-rapid-

tests-in-the-greek-market.html. 

31 

 
 
The  Polish  NCA  conducted  several  Covid-19-related  preliminary  investigations,  which 
did  however  not  result  in  an  infringement  decision.  The  investigations  related  to  (i) 
complaints about shortage and price increase of ethanol used for manufacturing magistral 
drugs (drugs prepared in pharmacy), (ii) shortage of medical oxygen, and shortages in the 
field  of  personal  protective  equipment.  The  Polish  NCA  found  that  the  shortages  were 
not linked to anticompetitive behaviour but were rather the result of a sudden increase in 
demand for the products.  The Polish NCA also  investigated whether Qiagen abused its 
dominant  position  as  a  distributor  of  diagnostic  reagents  but  found  no  evidence  of  the 
alleged refusal to deal, tying or exclusive contracts, and found that delays in fulfilment of 
orders were again due to demand-driven shortages arising from the Covid-19 pandemic. 

5.  COMPETITION PROMOTES ACCESS TO AFFORDABLE MEDICINES 

Competition  law  enforcement  activities  that  contribute  to  continuous  efforts  to  deliver 
affordable medicines to European patients and healthcare systems include, in particular, 
actions  against  practices  that  hinder  or  delay  the  market  entry  of  medicines  and  the 
resulting  price  competition  (Section  5.1),  and  against  excessively  high  prices  of 
medicines  when  they  amount  to  an  abuse  of  dominant  position  by  a  pharmaceutical 
company (‘unfair’ prices) (Section 5.2). In addition, the European competition authorities 
have  also  addressed  a  number  of  other  anti-competitive  practices  capable  of  hindering 
price  competition  (e.g.  refusal  to  supply,  resale  price  maintenance,  bid  rigging,  market 
sharing  and  exchange  of  commercially  sensitive  information)  that  either  directly  or 
indirectly  lead  to  higher  prices  of  medicines  (Section  5.3).  Finally,  the  Commission’s 
merger  control  in  the  pharmaceutical  sector  has  concentrated  on  facilitating  and 
protecting market entry of generic and biosimilar medicines, especially through remedies 
(Section 5.4). 

5.1.  Antitrust enforcement supports swift market entry of cheaper medicines 

Effective  generic  or  biosimilar  competition  typically  represents  an  important  source  of 
price  competition  on  pharmaceutical  markets  and  drives  prices  down  significantly.  For 
example,  an  economic  study  prepared  for  the  Commission (69)  found  that  prices  of 
innovator  medicinal  products  drop  by  40 %  on  average  in  the  period  after  generic 
products enter the market. It also showed that when generic medicinal products enter the 
market,  their price is  on average 50 % lower than the initial  price of the corresponding 
originator  product. (70)  On  the  one  hand  generic  and  biosimilar  entry  brings  benefits  to 
patients  and  national  healthcare  systems  while  on  the  other  it  significantly  reduces  the 
originator  companies’  profits  from  their  product,  which  no  longer  enjoys  patent 
protection or another form of exclusivity.  

To mitigate the impact of generic or biosimilar entry, originator companies often devise 
and  implement  a  variety  of  strategies  to  artificially  extend  the  commercial  life  of  their 
innovative  medicines  and  hinder  market  entry  of  competitor  products.  Examples  of 

(69)  Copenhagen Economics, see footnote 45. 

(70)  Examples from the Commission’s enforcement practice show that price reductions can be even more 
drastic in the case of blockbuster medicines. For instance, in the Lundbeck case the Commission found 
that  prices  of  generic  citalopram  dropped  on  average  by  90 %  in  the  United  Kingdom  compared  to 
Lundbeck’s  previous price  level  within  13  months  of  the  generic  products  entering  the  market on  a 
wide scale (Commission Decision of 19 June 2013 in case COMP/AT.39226 – Lundbeck, paragraph 
726). 

32 

 
 
illegitimate  practices  such  as  patent  misuse  and  vexatious  litigation,  anti-competitive 
agreements to delay market entry, disparagement of competitor products, abusive rebates 
and  predatory  pricing,  as  well  other  practices  hindering  market  entry,  are  described 
below. 

5.1.1. Patent misuse and vexatious litigation 

Given the regulatory framework characterising the pharmaceutical sector and the key role 
played  by  patents,  the  use  of  certain  rights  and  privileges  conferred  on  dominant 
undertakings may in certain cases be qualified as falling outside the scope of competition 
on  the  merits  and  may  have  an  anticompetitive  effect,  thereby  constituting  a  potential 
violation  of  Article  102  TFEU.  Indeed,  the  abusive  nature  of  a  certain  conduct  under 
Article 102 TFEU is in  general unrelated to that conduct’s compliance with other legal 
rules (71), 
the  pharmaceutical 
the  regulatory  framework  characterising 
sector. (72)  An  example  of  when  otherwise  legitimate  patent  conduct  by  a  dominant 
undertaking  could  be  considered  as  an  abuse  of  dominant  position  is  provided  by  the 
preliminary findings in the ongoing Teva Copaxone case.  

including 

Box 9: The Teva Copaxone case 

On  10  October  2022,  the  Commission  adopted  a  Statement  of  Objections  reaching  the 
preliminary  conclusion  that  Teva  may  have  abused  its  dominant  position  in  the  markets  for 
glatiramer  acetate,  a  treatment  for  multiple  sclerosis,  in  Belgium,  Czechia,  Germany,  Italy,  the 
Netherlands,  Poland  and  Spain.  According  to  the  Commission’s  preliminary  findings,  Teva 
engaged  in  two  types  of  conduct,  with  an  overall  objective  of  artificially  prolonging  the 
exclusivity  of  Teva’s  blockbuster  drug  Copaxone  by  hindering  the  market  entry  and  uptake  of 
competing glatiramer acetate medicines. (73) 

In  particular,  one  of  the  two  potentially  abusive  conducts  identified  in  the  Commission’s 
Statement  of  Objections  consists  in  the  misuse  of  patent  procedures. (74)  In  essence,  in  the 
Commission’s  preliminary view,  Teva’s  potentially abusive  behaviour  would  have  consisted in 
the staggered filing before the European Patent Office of applications for divisional patents (75) 
with largely overlapping content. Teva would have then subsequently obstructed the legal review 
of its patents by withdrawing the parent patent applications (but leaving pending the divisional 
patent applications) once legally challenged by competitors who were trying to “clear the way” 
for  their  market  entry.  As  a  result,  Teva’s  competitors  could  have  been  forced  to  legally 
challenge essentially similar Teva patent claims multiple times (one for each divisional patent), 
with the result that legal uncertainty was artificially prolonged to the benefit of Teva, and market 
entry  of  generic  or  generic-like  medicines  was  effectively  blocked  or  delayed,  amongst  others 
due to interim injunctions. 

The  Commission's  preliminary  views  as  to  the  potential  qualification  of  Teva’s  conduct  as 
abusive  under  Article  102  TFEU  are  yet  to  be  confirmed,  and  the  issuance  of  a  Statement  of 
Objections addressed to Teva does not prejudge the outcome of the Commission’s investigation. 

(71)  Judgment of  12  May  2022, Servizio  Elettrico  Nazionale  et  al.  v  AGCM,  C‑377/20,  EU:C:2022:379, 

paragraph 67. 

(72)  Judgment of 6 December 2012,  AstraZeneca v Commission, C‑457/10 P, EU:C:2012:770, paragraph 

132. 

(73)  Press release: https://ec.europa.eu/commission/presscorner/detail/en/IP_22_6062. 

(74)  See  Section  5.1.3  for  the  other  type  of  potentially  abusive  conduct  identified  in  the  Commission’s 

Statement of Objections. 

(75)  Divisional  patents  are  patents  derived  from  earlier  patent  applications  (so-called  “parent  patents”), 

and whose subject matter is already contained therein.  

33 

 
 
In some instances, companies may file claims before a Court not to assert their rights but 
merely  to  harass  the  opposing  party  as  part  of  a plan  to  eliminate  competition.  In  such 
exceptional circumstances, where it can be established that the legal action by a dominant 
company is objectively baseless, the practice of “vexatious litigation” may constitute an 
abuse  of  dominance.  The  practice  can  also  be  relevant  in  the  pharmaceutical  sector, 
where  a company may for example request  preliminary injunction from  courts not  as a 
means  to  protect  its  proprietary  rights  but  with  the  sole  objective  to  halt  a  competitor 
from launching a product and thereby eliminate competition. 

In a case investigated by the Spanish NCA, the pharmaceutical company Merck Sharp & 
Dohme GmbH (‘MSD’) enjoyed patent protection for the first vaginal contraceptive ring, 
Nuvaring  from  2002  to  2018.  Meanwhile,  the  competitor  Insud  Pharma  developed  an 
alternative (also patent protected) vaginal ring with different characteristics. The product 
was  launched  in  June  2017  under  the  name  Ornibel.  MSD  filed  legal  action  claiming 
patent  infringement  and  requested  a  Spanish  court  to  order  fact-finding  to  support  its 
claims, and subsequently to adopt interim measures in proceedings without hearing Insud 
Pharma  (so  called  ex  parte  proceedings).  The  court  issued  interim  measures  which 
effectively halted the manufacture and sale of the Ornibel ring in Spain from September 
until  December  2017,  when  the  court  annulled  the  interim  measures  following  Insud 
Pharma’s appeal. 

The Spanish NCA considered that when alleging patent infringement and requesting fact-
finding and interim measures, MSD deployed a strategy to mislead the court in order to 
hinder  the  market  entry  of  a  competitor,  withholding  relevant  factual  and  technical 
information  and  providing  misleading  information  to  the  court.  The  Spanish  NCA 
established  that  the  real  purpose  of  MSD’s  legal  actions  was  to  foreclose  competition 
rather  than  to  enforce  their  patents  reasonably  and  legitimately.  As  the  only  factory 
producing  Insud  Pharma’s  rings  was  located  in  Spain,  the  halt  in  production  affected 
distribution  and  sales  in  all  the  countries  where  the  rings  had  started  to  be  marketed. 
Consequently,  MSD's  conduct  affected  competition  in  several  EU  countries.  The  NCA 
concluded  that  the  lack  of  transparency  of  MSD's  conduct  vis-à-vis  the  court  was 
contrary  to  competition  on  the  merits  and  imposed  a  EUR 38,93  million  fine  on 
MSD. (76) 

5.1.2. Pay-for-delay agreements 

Pay-for-delay  agreements  encompass  a  variety  of  arrangements  between  originator  and 
generic  companies,  whereby  the  generic  company  agrees  to  restrict  or  delay  its 
independent  entry onto  the market  in  exchange for  significant  benefits  transferred from 
the  originator.  In  other  words,  the  originator  company  pays  its  competitor,  the  generic 
company, to stay out of the market for a period of time that may be shorter or longer – 
whereby even short delays may come at a high cost to the society at large. 

A pay-for-delay agreement may be advantageous for both the originator, who reaps extra 
profits  from  extended  market  exclusivity,  and  the  generic  company,  who  can  receive  a 
windfall  profit  from  the  originator.  If  the  profit  that  the  originator  hands  over  to  the 
generic  company  is  significantly  lower  than  the loss  in  originator  profits  in  the  case  of 
independent  entry,  then  the  originator  can  afford  to  pay  off  one  or  several  generic 
companies  to  prevent  their  entry.  A  generic  company  may  also  find  a  pay-for-delay 

(76)  Decision of the Comisión Nacional de los Mercados y la Competencia of 21 October 2022. 

34 

 
 
agreement  attractive  since  it  can  make  significant  earnings  without  even  entering  the 
market, by sharing part of the originator’s profits from exclusivity. 

In such a scenario, these two players (originator and generic would-be entrant) benefit at 
the expense of healthcare systems and taxpayers. Patients and healthcare systems suffer 
as result of pay-for-delay agreements  as they forego the savings that would result from 
the timely independent generic entry, and which instead provide extended profits for the 
originator  and  generic  companies.  Considering  the  scale  of  price  reductions  brought 
about  by  generic  entry,  even  short  delays  can  have  a  significantly  negative  impact  on 
competition. 

Pay-for-delay agreements can also have a detrimental effect on innovation. Competition 
from generics stimulates pharmaceutical companies to focus their efforts on developing 
new drugs rather than on maximising income streams from their old drugs by artificially 
preserving market exclusivity. (77) 

Since pay-for-delay agreements involve coordination between competing companies they 
fall  under  Article 101  TFEU  (and  equivalent  provisions  in  national  competition  laws). 
The anti-competitive nature of pay-for-delay agreements does not depend on the form in 
which  they  are  concluded.  Such  arrangements  are  often  entered  into  in  the  context  of 
disputes  between  originator  and  generic  companies  concerning  the  validity  and/or 
infringement  of  the  originator’s  secondary  patents.  In  such  pay-for-delay  deals  the 
originator induces the generic company to stay out of the market either by cash payments 
or any other commercial arrangement that essentially serves to buy a competitor out of 
the market.  

In January 2020, the Court of Justice issued its first ever ruling concerning pay-for-delay 
agreements (‘Generics UK judgment’) based on a number of questions referred from the 
United Kingdom Competition Appeal Tribunal (‘CAT’). (78) The judgment confirms that 
‘pay for delay’ agreements have the object of restricting competition and may constitute 
an abuse of a dominant position. The CAT then delivered a final judgment in May 2021 
dismissing all of the remaining grounds of appeal but lowered the fine from GBP 44.99 
million  (approximately  EUR 51.8  million) (79)  to  GBP  27.1  million  (EUR  31.9 
million). (80)  

Then,  in  May  2021,  the  CAT  upheld  the  NCA  decision (81)  that  GlaxoSmithKline  and 
some  generic  suppliers  of  the  anti-depressant  paroxetine  broke  competition  law.  In  its 
2016  decision,  the  NCA  had  found  that  GlaxoSmithKline  abused  its  dominant  position 

(77)  See,  mutatis  mutandis,  Judgment  of  the  General  Court  of  1  July  2010,  AstraZeneca  AB  and 
AstraZeneca plc v European Commission, Case T-321/05, EU:T:2010:266, paragraph 367: “misuse of 
the  patent  system  potentially  reduces  the  incentive  to  engage  in  innovation,  since  it  enables  the 
company  in  a  dominant  position  to  maintain  its  exclusivity  beyond  the  period  envisaged  by  the 
legislator.”  

(78)  Judgement of the Court of Justice of 30 January 2020 in Case C‑307/18, paragraph 87. 

(79)  All  EUR  countervalues  in  this  report  are  calculated  against  the  European  Central  Bank  average 

exchange rate in the year of the NCA's decision. 

(80)  Judgment of the Competition Appeal Tribunal of 10 May 2021. The reasoning behind this reduction is 
the question of novelty of the case and the lapse of time between the infringements and the start of the 
investigation. 

(81)  Decision of the Competition and Markets Authority of 12 February 2016.  

35 

 
 
by  inducing,  through  payments  and  other  benefits,  three  potential  generic  competitors 
(IVAX, Generics (UK) and Alpharma) to delay their potential independent entry into the 
paroxetine market in the United Kingdom. In March 2018, the CAT already dismissed a 
number of the companies’ grounds of appeal against the NCA’s decision and referred the 
remaining grounds to the Court of Justice for a preliminary ruling on various questions of 
EU law. (82)  

In  the  Generics  UK  judgment,  the  Court  of  Justice  pointed  to  the  central  role  for  the 
assessment  of  value  transfers.  It  concluded  that  pay-for-delay  agreements  restrict 
competition  by  their  very  object  “when  it  is  plain  from  the  analysis  of  the  settlement 
agreement  concerned  that  the  transfers  of  value  provided  for  by  it  cannot  have  any 
explanation other than the commercial interest of both the holder of the patent and the 
party allegedly infringing the patent not to engage in competition on the merits.” 

In the latest Commission case concerning pay-for-delay agreements, the Cephalon case, 
Cephalon  induced  Teva  not  to  enter  the  market  with  a  cheaper  version  of  its  drug  for 
sleep  disorders  in  exchange  for  a  package  of  commercial  side-deals  and  some  cash 
payments. (83)The  General  Court  confirmed 
its 
entirety (84).  

the  Commission’s  decision 

in 

Box 10: The Cephalon case 

On 26 November 2020, the Commission fined Teva and Cephalon EUR 30 million and EUR 30.5 
million respectively for agreeing to delay for several years the market entry of a cheaper generic 
version  of  Cephalon's  drug  for  sleep  disorders,  modafinil,  after  Cephalon's  main  patents  had 
expired.  The  infringement  lasted,  for  almost  all  EU  Member  States  and  EEA  countries,  from 
December  2005  to  October  2011,  when  Teva  acquired  Cephalon  and  they  became  part  of  the 
same group. 

Modafinil  is  used  to  treat  excessive  daytime  sleepiness  associated  with  narcolepsy.  It  was 
Cephalon's  top-selling  product  under  the  brand  Provigil  for  years,  accounting  for  40 %  of 
Cephalon's worldwide turnover.  

Teva  held  its  own  patents  relating  to  modafinil's  production  process,  was  ready  to  enter  the 
modafinil  market  with  its  own  generic  version,  and  it  had  even  sold  its  generic  in  the  United 
Kingdom  for  a  short  period  in  2005.  Shortly  after  Cephalon  introduced  a  patent  infringement 
action  against  Teva,  Cephalon  and  Teva  signed  a  settlement  agreement.  The  parties  agreed  to 
terminate the litigation, while Teva also committed not to enter the market and not to challenge 
Cephalon's  patents.  Teva  committed  to  stay  out  of  the  modafinil  markets,  not  because  it  was 
convinced of the strength of Cephalon's patents, but because of the substantial value transferred 
to  it  by  Cephalon.  The  value  transfer  was  mainly  embedded  in  a  number  of  commercial  side-
deals,  which  Teva  would  not  have  achieved  without  committing  to  staying  out  of  the  market. 
These included a distribution agreement, the acquisition of a licence on certain Teva modafinil 
patents by Cephalon, a lucrative supply contract, and granting by Cephalon of access to clinical 
data that were highly valuable for another medicine in Teva’s portfolio.  

On  18  October  2023,  the  General  Court  fully  upheld  Commission’s  decision,  accepting  the 
Commission’s reasoning that the side deals would not have been carried out at all or under the 
same  conditions  favourable  to  Teva  had  Teva  not  agreed to  the  non-compete  and  no-challenge 

(82)  C-307/18,  Generics  (UK)  Ltd.,  GlaxoSmithKline  Plc,  Xellia  Pharmaceuticals  APS,  Alpharma  LLC, 

Actavis UK Ltd. and Merck KGaA vs. Competition and Markets Authority. 

(83)  Commission Decision of 26 November 2020 in case COMP/AT.39686 – Cephalon.  

(84)  Judgement of the General Court of 18 October 2023. 

36 

 
 
clauses  in  the  settlement  agreement.  The  Court  also  rejected  all  of  the  appellants’  individual 
claims on the basis of a factual analysis of each of the side deals. Following the principles set out 
in  the  Generics  UK  judgment  the  Court  thus  confirmed  that  the  only  plausible  explanation  for 
each of the commercial transactions was to induce Teva to accept the restrictive clauses and thus 
to refrain from competing with Cephalon on the merits. In addition, the judgment confirmed that 
a  licence  to  Teva  to  enter  the  modafinil  markets  before  the  expected  expiry  of  Cephalon’s 
secondary  patents  (so  called  “early  entry  agreement”)  did  not  fulfil  stringent  criteria  set  in  the 
Generics  UK  judgment  and  could  not be  qualified  as  a  pro-competitive  element  preventing  the 
characterisation of the Settlement Agreement as a “by object” restriction. Finally, the Court fully 
rejected the appellant’s objections to the Commission’s “by effects” analysis. 

Pay-for-delay  agreements  were  found 
in  various  other 
circumstances.  In  the  Lundbeck  decision  of  2013  the  Commission  imposed  fines  on 
pharmaceutical companies for entering into agreements that delayed the market entry of 
generic citalopram. (85).  

to  be  anti-competitive 

The litigation concerning the Commission’s  Servier  decision (86), which concerned  five 
pay-for-delay  agreements,  is  still  pending  before  the  Court  of  Justice.  At  first  instance, 
the General Court confirmed the Commission’s findings concerning four agreements but 
annulled the decision as far as it concerned the agreement between Servier and Krka, as 
well  as  the  Commission’s  findings  concerning  the  relevant  product  market  and 
dominance  and  consequently  the  conclusion  that  Servier  also  abused  its  dominant 
position in violation of Article 102 TFEU. (87) 

5.1.3. Disparagement 

Over  the  last  ten  years,  investigations  of  disparagement  in  the  pharmaceutical  industry 
have  been  on  the  rise.  In  these  cases,  dominant  incumbents  disparage  (denigrate)  their 
competitors - usually new entrants - to hinder the uptake of competing products. 

The Court of Justice already clarified that dissemination of misleading information to the 
authorities, healthcare professionals and the general public can raise concerns under the 
EU  competition  rules.  Specifically,  in  a  judgment  concerning  restrictive  agreements 
under Article 101 TFEU, the Court ruled that companies may not collude to disseminate, 
in a context of scientific uncertainty, misleading information relating to adverse reactions 
resulting from the off-label use of one product with a view to reducing  the competitive 
pressure it exerts on another product. (88) 

The  French  NCA  pioneered  the  enforcement  in  this  space  with  a  series  of  decisions 
against  companies  engaged  in  disparagement  practices (89),  three  of  which  have  been 

(85)  Commission  decision  of  19  June  2013.  See  also  2019  Report  on  competition  enforcement  in  the 

pharmaceutical sector. 

(86)  Commission Decision of 9 July 2014. 

(87)  Judgment of the General Court of 12 December 2018. See also Opinion of Advocate General Kokott 

of 14 July 2022. 

(88)  Judgment  of  the  Court  of  Justice  of  23 January  2018,  F.  Hoffmann-La  Roche  Ltd  and  Others  v 

Autorità Garante della Concorrenza e del Mercato, C‑179/16. 

(89)  See  also  the  2019  Report  on  Competition  enforcement  in  the  pharmaceutical  sector:  the  Plavix 
decision (Decision of the Autorité de la concurrence of 14 May 2013), the Subutex decision (Decision 
of  the  Autorité  de  la  concurrence  of  18  December  2013),  the  Durogesic  decision  (Decision  of  the 
Autorité de la concurrence of 20 December 2017), and the Avastin Lucentis decision (see Box 11). 

37 

 
 
confirmed by the French highest courts. In the Durogesic case, by way of a judgment of 
11 July  2019, the Paris Court of Appeal, while rejecting the appellants’  claims seeking 
the annulment of the decision, lowered the fine from EUR 25 million to 21 million. (90) 
This  was  confirmed  on  1  June  2022  by  the  Court  of  Cassation. (91)  In  the  Avastin-
Lucentis case, the appeal procedure is pending before the Court of Cassation. 

Box 11: The Avastin-Lucentis cases: misleading information about use of pharmaceutical 

Several  NCAs  investigated  a  case  related  to  an  agreement  between  Hoffmann-La  Roche  and 
Novartis  aiming  at  discouraging  and  limiting  off-label  use  of  Hoffmann-La  Roche’s  oncology 
medicine Avastin for treatment of Age-related Macular Degeneration (‘AMD’). AMD is the main 
cause  of  age-related  blindness  in  developed  countries.  Avastin  (authorised  for  the  treatment  of 
tumorous  diseases)  and  Lucentis  (authorised  for  the  treatment  of  eye  diseases)  are  medicines 
developed  by  Genentech,  a  company  which  belongs  to  the  Hoffmann-La  Roche  group. 
Genentech transferred the commercial exploitation of Lucentis to the Novartis group by way of a 
licensing  agreement,  whereas  Hoffmann-La  Roche  markets  Avastin  for  cancer  treatments. 
Nonetheless, the active ingredient in both medicines being similar (though developed in different 
ways), Avastin was frequently used off-label (i.e. without authorisation by a medicines agency) 
to treat eye diseases instead of Lucentis because of its significantly lower price. 

The  Italian  NCA  found  in  2014  that  Novartis  and  Hoffmann-La  Roche  had  colluded  to 
artificially  differentiate  Avastin  from  Lucentis  and  disseminate  alarmist  messages. (92)  The 
arrangement sought to disseminate information raising concerns about the safety of Avastin used 
in ophthalmology to shift demand towards the more expensive Lucentis. According to the NCA, 
this illicit collusion was capable of hindering access to treatment for many patients and caused 
the Italian healthcare system additional expenses estimated at EUR 45 million in 2012 alone. In 
the second-instance appeal procedure against the NCA’s decision, the Italian State Council sent a 
preliminary reference to the Court of Justice on several questions concerning the interpretation of 
Article 101  TFEU.  In  its  answers  the  Court  of  Justice  clarified,  amongst  others,  that  (i)  in 
principle,  a medicine  used  off-label can be considered  as  competing  with medicines  authorised 
for that use and that (ii) communication of misleading information regarding the safety of an off-
label  medicine  to  the  authorities,  medical  professionals  and  general  public  may  constitute  a 
restriction of competition by object (93). Following this referral, the Italian State Council in 2019 
upheld the NCA’s decision 94 with a judgment confirmed both by the Italian Supreme Court  of 
Cassation in 2021 (95) and by the same Italian State Council in 2023 during a review proceeding 
that called for an additional preliminary ruling of the Court of Justice (96). 

Regarding the same medicines, the French NCA fined Novartis, Roche and Genentech for a total 
of  EUR  444  million  in  2020. (97)  However,  the  French  NCA  did  not  find  an  anticompetitive 
agreement in this case but an abuse of collective dominant position of these three undertakings 
aiming  at  preserving  the  position  and  the  price  of  Lucentis  by  curbing  the  off-label  use  of 
Avastin.  The  NCA  established  that  Novartis  disparaged  Avastin,  since  it  unjustifiably 

(90)  Judgment of the Cour d’appel de Paris of 11 July 2019. 

(91)  Judgment of the Chambre commerciale de la Cour de cassation of 1 June 2022. 

(92)  Decision of the Autorità Garante della Concorrenza e del Mercato of 27 February 2014. 

(93)  Judgment  of  the  Court  of  Justice  of  23 January  2018,  F.  Hoffmann-La  Roche  Ltd  and  Others  v 

Autorità Garante della Concorrenza e del Mercato, C‑179/16. 

(94)  Judgment of the Italian State Council of 15 July 2019.  

(95)  Judgment of the Italian State Council of 8 May 2023. 

(96)  Judgment  of  the  Court of  Justice  of 7  July  2022,  F.  Hoffmann-La  Roche  Ltd  and  Others  v  Autorità 

Garante della Concorrenza e del Mercato, C‑261/21.  

(97)  Decision of the Autorité de la concurrence of 9 September 2020. 

38 

 
 
exaggerated the risks associated with its off-label use in comparison with Lucentis for the same 
purpose.  This  communication  campaign  targeted  ophthalmologists,  patient  associations  and  the 
general  public  in  order  to  discredit  the  off-label  use.  Moreover,  the  NCA  found  that  Novartis, 
Roche  and  Genentech  unduly  interfered  with  the  French  healthcare  authority's  initiatives  to 
encourage this off-label use by engaging in obstructive behaviour and disseminating alarmist or 
misleading  information  in  this  regard.  In  2023,  the  Paris  Court  of  Appeal  annulled  the  NCA’s 
decision,  ruling  that  no  anti-competitive  practice  had  been  established  against  the  three 
undertakings. (98) An appeal against this judgment is pending before the Court of Cassation. 

The  Belgian  NCA  followed  the  same  reasoning  and  imposed  a  fine  of  EUR  2.78  million  on 
Novartis for abusing its collective dominant position held together with the Roche group. (99)  

In  its  Statement  of  Objections  addressed  to  Teva  in  the  Copaxone  case  (see  Box  9 
above), the Commission expressed preliminary concerns about a possible anticompetitive 
and  systematic  disparagement  campaign  targeting  healthcare  professionals  and  casting 
doubts about the safety and efficacy of a competing glatiramer acetate medicine and its 
therapeutic equivalence with Teva’s Copaxone.  

5.1.4. Abusive rebates and predatory pricing 

Dominant  pharmaceutical  suppliers  must  ensure  that  the  discounts  they  give  do  not 
amount to an abuse of their dominant position. Even if, at first sight, such discounts may 
seem to benefit society through decreasing overall costs for medicines, they may in the 
medium-term lead to negative effects if, for example, they hinder competitors to grow or 
even exclude competitors from the market.  

In  2019,  the  Dutch  NCA  launched  an  investigation  into  the  discounts  that  AbbVie  had 
offered hospitals for its drug Humira (prescribed for rheumatism, psoriasis, and Crohn’s 
disease  among  other  conditions).  The  patent  on  the  active  ingredient  of  Humira  had 
expired  and  other  drug  manufacturers  produced  and  marketed  biosimilars  of  Humira. 
Under the AbbVie discount scheme, hospitals could only get a significant discount if all 
existing patients continued to use Humira and did not switch to a biosimilar.  

Based  on  its  investigation,  the  NCA  concluded  that  AbbVie,  as  former  patent  owner, 
sought to make it harder for biosimilar manufacturers to enter the market. Following this, 
AbbVie  dropped  the  conditions  of  its  discounts  and  indicated  that  it  would  not  oblige 
hospitals  to  purchase  exclusively  or  to  a  large  extent  from  AbbVie  through  discount 
schemes  or  rebate  programs.  In  light  of  these  assurances,  ,  the  NCA  closed  its 
investigation. (100) 

In  another  case,  also  concerning  anti-rheumatic  biologics,  the  Dutch  NCA  received 
information  in  autumn  2021  that  Pfizer  was  using  a  discount  scheme  for  its  anti-
rheumatic drug Enbrel that could discourage hospitals from switching to other competing 
biosimilar  drugs.  The  NCA’s  investigation  revealed  that,  in  various  contracts  with 
hospitals,  Pfizer  had  included  a  clause  that  enabled  Pfizer  to  significantly  reduce  the 
discount applied to future volumes if the purchased quantities decreased by more than a 

(98)  Decision of the Cour d’appel de Paris of 16 February 2023. 

(99)  Decision  of  the  Autorité  belge  de  la  concurrence  /  Belgische  Mededingingsautoriteit  of  23  January 

2023. 

(100) https://www.acm.nl/en/publications/acm-closes-investigation-drug-manufacturer-abbvie-competitors-

get-more-room-now. 

39 

 
 
 
pre-specified percentage. This created the risk of a substantial financial barrier emerging 
for hospitals to switch drugs.  

On the basis of its preliminary investigation, the NCA informed Pfizer of its findings that 
the  pricing  structure  that  Pfizer  used  seemed  to  be  at  odds  with  competition  rules.  In 
reaction,  Pfizer  removed  the  discount  clauses  from  its  Enbrel  contracts.  Consequently, 
the NCA decided not to further investigate the case. (101) 

Continuation  of  the  above  conduct  could  have  been  particularly  harmful  to  drug 
affordability,  since  despite  rebates  offering  lower  prices  for  hospital  in  the  short  term, 
they  can  result  in  foreclosure  of  cheaper  generic  drugs,  and  in  reduced  investment 
incentives  for  biosimilar  manufacturers.  Both  cases  show  that  the  NCA’s  intervention, 
although not resulting in a final decision, could enable hospitals, patients, and insurance 
systems to benefit from the improved market-entry opportunities for biosimilars. 

Another  example  of  abusive  discounting  is  the  predatory  pricing  in  the  Austrian 
temozolomide case. 

Box 12: The Austrian temozolomide case 

In 2016 the Commission conducted inspections in Merck Sharp & Dohme’s (‘MSD’) premises in 
Vienna,  for  a  suspected  abuse  of  a  dominant  position  through  predatory  pricing  in  relation  to 
Temodal.  The  drug  with  the  active  ingredient  temozolomide  is  used  in  oncology  to  treat  brain 
tumours such as glioblastoma (the most frequent type of brain tumour in adults). Following the 
Commission’s  inspection,  the  case  was  transferred  to  the  Austrian  NCA  which  started  an 
investigation  in  2018,  and  concluded  it  in  2021  after  receiving  commitments  from  MSD  that 
dispelled its competition concerns. (102) 

Patients were usually given their first dose of Temodal as in-patients at the hospital where they 
were being treated. For subsequent doses, treatment continued on an out-patient basis, with the 
medicine being prescribed by specialist doctors in their practices. These doctors are usually the 
same doctors that treated the patients at the hospital.  

After  the  expiry  of  patent  protection  for  Temodal,  MSD  followed  a  strategy  of  foreclosing 
generic manufacturers’  access to  hospitals.  This  was a  key  point  for competitive  entry  because 
the prescription made in the hospital would also determine the prescription once the patient left 
the  hospital.  MSD’s  prices  to  hospitals  were  allegedly  set  below  cost,  with  free  samples  made 
available.  In  some  cases,  hospitals  were  at  times  only  given  free  samples  for  the  initial 
dispensing. This allegedly barred generics not only from supplying the hospitals, but also from 
competing  in  pharmacies,  as  out-of-hospital  patients  had  prescriptions  only  allowing  the 
pharmacists  to  dispense  branded  Temodal.  This  precluded  generic  drug  manufacturers  from 
entering  the  market  during  the  period  of  the  alleged  infringement,  effectively  harming 
competition through predatory foreclosure measures. 

Hospitals benefited from lower costs when prescribing the medicine for the first time. However, 
when  the more  expensive drug continues to  be  prescribed  by  doctors in their practices,  society 
will  pay  more in  the medium-term.  This  ultimately means  less  price  competition  and  therefore 
overall higher costs for the healthcare system.  

Due to the structure of this system, the NCA assumed strong lock-in effects in favour of the first 
prescription.  Lock-in  effects  mean  that  customers  remain  loyal  to  a  particular  product  and  are 

(101) https://www.acm.nl/en/publications/drug-manufacturer-pfizer-discontinue-its-steering-pricing-

structure-enbrel-following-discussions-acm.  

(102) Decision of the Bundeswettbewerbsbehörde of 2 April 2021. 

40 

 
 
unlikely to switch to another one. In this case, hospital doctors had no incentive to prescribe other 
products containing temozolomide.  

MSD agreed to stop its aggressive pricing strategy vis-à-vis hospitals and to set up a compliance 
program including commitments (i.e. not to distribute below costs any longer). 

5.1.5. Other practices hindering market entry 

In  addition  to  the  cases  described  above,  the  European  competition  authorities  also 
detected  and  pursued  a  number  of  other  anti-competitive  practices  carried  out  by 
originator  companies  designed  to  prevent  or  delay  generic  or  biosimilar  entry.  All  of 
these practices prevented price reductions from generic or biosimilar entry and therefore 
directly harmed patients and healthcare systems. 

In  December  2019 (103),  the  Romanian  NCA  found  that,  in  the  period  from  2017  until 
2019, Roche Romania SRL had implemented a strategy to prevent the sales of competing 
cheaper  generic  medicines  to  protect  its  medicine  Tarceva  (a  medicine  used  for  the 
treatment  of  lung  cancer  and  pancreatic  cancer).  Roche’s  strategy  included  directing 
patients  to  their  most  expensive  product,  Tarceva,  through  the  Roche  Patient  Card  and 
the Roche Call Center and covering the price difference that patients would have had to 
pay when purchasing Tarceva, in order for them not to buy another similar medicine This 
type  of  behaviour  can  lead  to  exclusion  of  competitors  in  the  medium  term.  For  this 
practice, Roche Romania SRL was fined RON 15,799,839 (EUR 3.34 million).  

In a separate case, the Romanian NCA also fined Roche Romania SRL RON 59,967,944 
(approx.  EUR  12.8  million)  for  adopting  a  commercial  strategy  aimed  at  eliminating 
competition  and  at  delaying  the  entry  of  competing  biosimilar  medicines  for  several 
oncological  treatments. (104)  To  avoid  monopolisation  of  medicines  distribution, 
Romanian legislation obliged market authorisation holders to wholesale their medicines 
to  at  least  three  distributors  (which  could  therefore  independently  participate  in  public 
procurement  procedures).  Roche  participated 
in  a  Romanian  centralised  public 
procurement procedure within the Romanian National Oncology Program and in several 
tenders organized at hospital level. However, Roche supplied its rituximab, trastuzumab 
and bevacizumab medicines to the wholesalers with whom it was competing in tenders at 
prices higher than its own bid. This way, Roche squeezed the wholesalers’ margins and 
eliminated the competition in the auction. Roche thus also limited the wholesalers’ ability 
to  replace,  under  a  tender  that  they  would  have  possibly  won,  Roche’s  products  with 
cheaper  soon-to-be-authorised  or  already  available  biosimilar  alternatives.  As  a  result, 
Roche's actions  strengthened its  dominant  position  and harmed competition by creating 
barriers to market entry and delaying the uptake of cheaper biosimilars. 

5.2.  Enforcement against dominant firms charging unfairly high prices (excessive 

prices) 

European competition authorities have been investigating several cases where a company 
imposed  excessive  prices  on  patients  and  healthcare  systems  by  abusing  its  dominant 
position.  Exploitative  conduct  by  way  of  unfair  pricing  (sometimes  referred  to  as 
‘excessive pricing’) is prohibited under EU competition rules (Article 102(a) TFEU). The 

(103) Decision 91 of the Consiliul Concurentei of 16 December 2019. 

(104) Decision 92 of the Consiliul Concurentei of 16 December 2019. 

41 

 
 
Court  of  Justice  has  laid  out  a  set  of  conditions  under  which  a  dominant  company’s 
prices  can  be  found  as  unfair,  and  thus  in  breach  of  Article 102  TFEU  which  prohibits 
abuses of a dominant position. (105) 

In  investigating  potentially  unfair  high  prices,  competition  authorities  need  to  carefully 
balance rewards for possible dynamic efficiencies and innovation against the burden such 
prices inflict on consumers and society. Moreover, they consider whether high prices and 
profits may result from excellence, risk taking and innovation and whether prices can be 
kept in check by market forces, namely the threat of new entry or expansion attracted by 
high prices. 

That  said,  competition  authorities  have  not  hesitated  to  intervene  where  necessary  to 
ensure effective competition.  Recent  investigations  and enforcement  in  the EU, leading 
to  several  decisions  concerning  excessive  pricing,  show  that  a  heightened  degree  of 
vigilance  under  competition  law  is  merited  with  respect  to  possible  excessive  pricing 
practices by dominant companies in the pharmaceutical sector. 

Box 13: Commitments to significantly reduce prices in the Commission’s Aspen case 

In  2021,  the  Commission  adopted  a  commitments  decision  in  its  first  excessive  pricing 
investigation in the pharmaceutical sector. (106) The decision set out the Commission’s concerns 
about  the  pricing  practices  of  Aspen  Pharmacare,  a  South  African  pharmaceutical  company, 
regarding  six  of  its  off-patent  cancer medicines  mainly  used  in  the  treatment  of  leukaemia  and 
other haematological cancers in several EU Member States (excluding Italy) and EEA countries.  

The Commission’s assessment followed the framework of analysis set out by the Court of Justice 
in the United Brands judgment. (107) In particular, Aspen’s accounting data on revenues and costs 
revealed that, after the price increases, Aspen consistently earned very high profits from the sales 
of these cancer medicines in Europe, when compared to the profit levels of similar companies in 
the industry. In certain cases, high profit margins can be explained by, for example, the need to 
reward  significant  innovation  and  commercial  risk-taking.  However,  the  Commission’s 
assessment did not reveal any such justifications for Aspen’s very high profit levels.  

By  accepting  and  declaring  Aspen’s  final  commitments  binding,  the  Commission  was  satisfied 
that  these  commitments  removed  its  concerns  of  excessive  pricing.  In  particular,  the 
commitments  ensured  that:  (a)  Aspen  reduced  its  prices  across  Europe  for  all  six  cancer 
medicines under investigation by, on average, approximately 73 %; (b) these new prices (which 
started  taking  effect  retroactively,  as  of  October  2019,  when  Aspen  first  approached  the 
Commission  with  a  commitment  proposal)  were  the  maximum  that  Aspen  can  charge  for  the 
coming ten years; and (c) Aspen guaranteed the supply of these medicines for the next five years, 
and,  for  an  additional  five-year  period,  would  either  continue  to  supply  itself  or  make  its 
marketing authorisation available to other suppliers. 

These commitments have delivered to patients and national health systems concrete and tangible 
benefits  at  a  moment  when  there  were  and  still  are  widespread  concerns  about  companies 
withdrawing  from  supplying  some  Member  States  (a  concern  also  highlighted  in  the 
Commission’s Pharmaceutical Strategy for Europe, see Section 3.2.3 above). 

(105) Case 27/76 - United Brands v Commission, judgment of the Court of Justice of 14 February 1978; and 

Case 177/16 – AKAA/LAA, judgment of the Court of Justice of 14 September 2017. 

(106) Commission decision of 10 February 2021. 

(107) Judgment of the Court of Justice of 14 February 1978. 

42 

 
 
The Italian Aspen case 

Before the  conclusion of the  Commission’s  Aspen case (see Box  13  above), the  Italian 
NCA  imposed  in  September  2016  a  EUR 5.2  million  fine  on  Aspen  for  abusing  its 
dominant  position  by  setting  unfair  prices  in  Italy  for  four  cancer  medicines. (108)  The 
NCA also ordered Aspen to put in place measures aimed at, among other things, setting 
new  fair  prices  for  the  medicines  concerned.  Following  the  NCA’s  order  and  after 
protracted  negotiations,  Aspen  reached  an  agreement  on  pricing  with  the  Italian 
Medicines  Agency.  On 13 June  2018  the  NCA  determined  that  Aspen  was  compliant 
with its order and estimated that the concluded agreement would save the Italian National 
Health  Service  EUR 8  million  annually.  The  NCA  decision  was  upheld  by  the 
Administrative  Regional  Court (109)  in  2017  and  an  appeal  by  Aspen  against  this 
judgment was rejected by the Italian State Council in 2020. (110) 

The Danish CD Pharma case 

By  its  decision  of  January  2018 (111),  the  Danish  NCA  found  that  CD  Pharma  (a 
pharmaceutical  distributor)  abused  its  dominant  position  in  Denmark  by  charging 
Amgros  (a  wholesale  buyer  for  public  hospitals)  unfair  prices  for  Syntocinon.  This 
medicine  contains  the  active  ingredient  oxytocin,  which  is  given  to  pregnant  women 
during childbirth. From April 2014 until October 2014 CD Pharma increased the price of 
Syntocinon  by  2,000 %  from  DKK 45  (EUR 6)  to  DKK 945  (EUR 127).  The  NCA 
established that the difference between the costs actually incurred and the price charged 
by CD Pharma was excessive. In addition, the NCA compared CD Pharma’s price with 
the  economic  value  of  Syntocinon,  historical  prices  for  Syntocinon,  prices  charged  by 
CD Pharma’s competitors and the prices charged outside Denmark. As a result, the NCA 
found that prices for Syntocinon were unfair and, therefore,  CD Pharma had abused its 
dominant position. On 29 November 2018 (112), the Danish Competition Appeal Tribunal 
upheld  the  Danish  NCA’s  finding  that  CD  Pharma  held  a  dominant  position  on  the 
Danish market for the sale of oxytocin on the basis of its very high market share and an 
exclusive distribution agreement, which guaranteed supply of Syntocinon and provided a 
competitive advantage in comparison to its competitor Orifarm. As regards the nature of 
the abuse, the Tribunal further upheld the Danish NCA’s finding that CD Pharma abused 
its  dominant  position  by  charging  excessive  prices  on  the  basis  of  CD  Pharma’s  profit 
margin amounting to 80-90 %.  In addition, the Danish NCA reported CD Pharma to the 
Public Prosecutor for Serious Economic and International Crime (SØIK) for the purpose 
of criminal prosecution and fine. 

The  Competition  Appeal  Tribunal  decision  was  subsequently  brought  before  the 
Maritime  and  Commercial  High  Court,  which  in  March  2020  upheld  the  rulings  of  the 
NCA and the Competition Appeal Tribunal. (113)  

(108) Decision of the Autorità Garante della Concorrenza e del Mercato of 29 September 2016.  

(109) Judgment of the Tribunale Amministrativo Regionale per il Lazio of 26 July 2017.  

(110) Judgment of the Consiglio di Stato of 13 March 2020. 

(111) Decision of Konkurrence- og Forbrugerstyrelsen of 31 January 2018.  

(112) Judgment of Konkurrenceankenævnet of 29 November 2018.  

(113) Judgment of Sø- og Handelsretten of 2 March 2020. 

43 

 
 
The Leadiant cases 

Leadiant’s pricing policy for a rare disease treatment has led to a series of decisions by 
NCAs(114).  The  Dutch,  Italian  and  Spanish  NCAs  in  2021-2022  adopted  decisions 
finding  that  Leadiant  abused  its  dominant  position  by  charging  excessive  prices  for  its 
prescription  medicine  Chenodeoxycholic  Acid  Leadiant  (‘CDCA’).  CDCA  treats  an 
extremely  rare  disease  (cerebrotendinous  xanthomatosis,  ‘CTX’)  that,  if  untreated,  can 
lead  to  dementia  and  death.  It  has  been  used  “off  label”  for  the  treatment  of  CTX  for 
several decades. Leadiant acquired CDCA and relaunched it as an orphan drug (see Box 
7) in 2017 after the Commission granted Leadiant an orphan designation and a marketing 
authorisation  on  a  recommendation  from  the  EMA.  This  gave  Leadiant  market 
exclusivity  for  ten  years  in  the  EU  for  CDCA-based  drugs  for  the  treatment  of  CTX. 
Leadiant then imposed huge price increases for CDCA (up to 20 times).  

Leadiant  was  also  found  to  have  imposed  an  exclusivity  clause  on  the  only  authorised 
supplier  of  the  active  pharmaceutical  ingredient  able  to  supply  CDCA  in  sufficient 
quantities and quality (preventing the emergence of alternative medicines, both industrial 
and  in  the  form  of  magistral  formulations).  Free  of  constraints  from  competition  or 
customers,  this  in  turn  enabled  Leadiant  to  charge  or  maintain  excessive  prices.  The 
decisions  of  all  three  NCAs  consider  the  price  charged  by  Leadiant  in  their  respective 
national markets to amount to an abuse of dominance. The decision of the Spanish NCA, 
in addition, also considers the exclusivity agreements with the supplier to amount to an 
abuse of dominance. 

In  the  Netherlands,  Leadiant  offered  since  2008  a  CDCA-based  drug  Chenofalk  (not 
developed  by  Leadiant  itself  but  acquired  from  another  manufacturer).  The  maximum 
price at the time was EUR 46 per pack. In late 2009, Leadiant changed the name of the 
drug into Xenbilox, and raised the price up to almost 20 times the original price. In 2014, 
Leadiant  again  increased  the  price  of  Xenbilox  (to  up  to  EUR  3,103).  In  June  2017, 
Leadiant released CDCA on the Dutch market under the trade name CDCA-Leadiant and 
stopped  selling  CDCA  under  the  old  name  Xenbilox.  As  from  then,  Leadiant  charged 
EUR 14,000 per pack. Based on the aforementioned criteria, the Dutch NCA found that 
the prices were abusive and imposed a fine of 19.6 million Euro. (115) 

In Italy, Leadiant (at that time Sigma-Tau) started selling Xenbilox at the beginning of 
2016 at the price of EUR 2,900 per pack (until then patients were administered CDCA-
based  magistral  preparations  at  the  final  price  of  around  EUR  70  per  pack).  When 
Leadiant  obtained  the  orphan  drug  designation  and  market  authorisation  in  2017,  it 
launched  the  CDCA-Leadiant  at  the  price  of  EUR  15,507  per  pack.  At  the  same  time 
Xenbilox  became  unavailable.  In  December  2019,  Leadiant  and  Agenzia  Italiana  del 
Farmaco  (AIFA)  agreed  on  a  price  of  EUR  (between  5,000-7,000)  per  pack,  which 
entered  into  effect  as  of  March  2020.  The  Italian  NCA  found  that  the  investigated 
conduct constituted an abuse of a dominant position and decided to impose a fine of EUR 
3.5 million on Leadiant.  

(114)  Decision of the Autoriteit Consument en Markt of 1 July 2021, decision of the Autorità Garante della 
Concorrenza e del Mercato of 31 May 2022, and decision of the Comisión Nacional de los Mercados 
y la Competencia of 10 November 2022. These decisions are still subject to appeals with the relevant 
national courts. In first instance, the decision of the Italian NCA was confirmed in appeal by the TAR 
Lazio on 20 July 2023. The Belgian NCA initiated proceedings but decided not to  grant priority to 
pursuing this case. 

(115)  Decision on administrative appeal on 22 June 2023 in which it reduced the fine to EUR 17 million. 

44 

 
 
In  Spain,  Leadiant  withdrew  the  CDCA-based  drug  it  had  been  marketing  since  2010 
(Xenbilox)  from  the  Spanish  market,  and  reformulated  it  in  order  to  launch  it  on  the 
market as an orphan drug under a different brand name (CDCA-Leadiant) at a price 14 
times  higher.  The  only  drug  available  in  Spain  for  the  treatment  of  CTX  went  from 
costing EUR 984 per pack in September 2010 to EUR 14,618 per pack in June 2017. In 
November 2022, the Spanish NCA imposed a fine of EUR 10.25 million on Leadiant.  

the  assessment  of  excessive  pricing, 

Concerning 
their 
methodology and based their assessment on the two-step legal test as established by the 
Court of Justice in the case United Brands. (116)  

the  NCAs  coordinated 

In the first step, they established that Leadiant’s CDCA prices were excessive. The NCAs 
found that the internal rate of return on investment, based on the costs and internal risk 
estimates  of  Leadiant,  was  vastly  superior  to  the  weighted  average  of  cost  of  capital 
considered reasonable for this investment.  

In the second step, the NCAs also established that Leadiant’s CDCA prices were unfair 
in  themselves.  The  NCAs  examined  mainly  qualitative  criteria,  such  as:  nature  of  the 
product (CDCA-Leadiant , the product with the orphan drug designation, is equivalent to 
Leadiant’s predecessor product, Xenbilox, also CDCA-based and used off label to treat 
CTX, which did not have an orphan drug designation); low investments in research and 
development and low commercial risks entailed by Leadiant.  

Importantly, the NCAs took into account the context of the orphan drug designation and 
marketing authorisation  (Leadiant  registered CDCA for CTX but  did  not  introduce any 
innovative product, since the Leadiant product had no therapeutic added value compared 
to  the  previous  CDCA-based  drugs).  The  NCAs  found  that  the  unfairness  of  CDCA-
Leadiant’s prices was also apparent from the fact that this price was far higher than the 
prices of Chenofalk and Xenbilox a few years earlier, even though they were chemically 
identical. 

The Pfizer Flynn case 

In  2016,  the  United  Kingdom  NCA  found  that  Pfizer  and  Flynn  had  each  abused  their 
respective  dominant  position  by  imposing  unfair  prices  for  phenytoin  sodium  capsules 
(an  epilepsy  medicine)  manufactured  by  Pfizer  in  the  United  Kingdom (117).  Pfizer  and 
Flynn  had  entered  into  agreements  under  which  Pfizer  transferred  its  marketing 
authorisations for Epanutin to Flynn but continued to manufacture and supply the product 
to  Flynn  for  distribution  in  the  United  Kingdom.  However,  Pfizer’s  supply  prices  to 
Flynn were between 780 % and 1,600 % higher than what Pfizer had previously charged 
distributors. In turn, Flynn hiked up prices to distributors by up to 2,600 %, compared to 
previous  price  levels  when  the  medicine  was  sold  branded.  This  was  possible  because 
Flynn  started  selling  Epanutin  under  its  generic  name  phenytoin  sodium  (without  the 
brand name) taking advantage of a loophole in the law at the time which did not subject 
generic  medicines  to  any  price  limits  (contrary  to  branded  medicines).  The  NCA  fined 
Pfizer  GBP 84.2  million  (EUR 99.2  million)  and  Flynn  GBP 5.16  million  (EUR 6.08 
million).  

(116) Case 27/76 - United Brands v Commission, judgment of the Court of Justice of 14 February 1978. 

(117) Decision of the Competition and Markets Authority of 7 December 2016.  

45 

 
 
In  2018,  the  United  Kingdom  Competition  Appeal  Tribunal  (‘CAT’)  upheld  several 
findings  of  the  NCA  (i.e.  the  narrow  market  definition  and  that  Pfizer  and  Flynn  each 
held  dominant  positions),  but  found  that  the  NCA  conclusions  on  abuse  of  dominance 
were  in  error,  ultimately  deciding  to  remit  the  case  back  to  the  NCA  for  further 
consideration. (118)  Both  the  NCA  and  Flynn  appealed  this  ruling  through  proceedings 
where  the  Commission  intervened  as  amicus  curiae. (119)  The  Court  of  Appeal  handed 
down  its  judgment  in  March  2020,  partially  upholding  the  NCA’s  appeal  and  entirely 
dismissing  Flynn’s  appeal. (120)  Following  this  judgment,  the  NCA  adopted  a  new 
infringement decision in 2022, imposing a fine on Pfizer amounting to GBP 63.3 million 
(EUR 73.2  million)  and  a  fine  on  Flynn  amounting  to  GBP 6.7  million  (EUR 7.7 
million). (121). Pfizer and Flynn have appealed that decision to the CAT and the hearing 
was scheduled to take place in November and December 2023. 

5.3.  Other anti-competitive practices capable of hindering price competition 

European  competition  authorities  also  intervened  against  various  other  anti-competitive 
practices that  hinder price  competition  amongst  medicines. Some of these practices are 
specific to the pharmaceutical sector and driven by its economic and regulatory features, 
while  others  are  known  from  other  sectors  as  well,  but  can  nonetheless  have  strong 
effects on prices of medicines.  

In  some  instances,  companies  have  artificially  reduced  the  competitive  pressures  that 
normally  restrain  their  pricing  power.  The  practices  concerned  range  from  cartel  or 
cartel-like  infringements  of  competition  law  (e.g.  bid  rigging,  price  fixing  and  market 
sharing), to abuses of a dominant position, and restrictions in relations between suppliers 
and  their  customers.  What  these  practices,  illustrated  by  examples  below,  have  in 
common is that they have a direct impact on the prices of medicines paid by European 
patients and healthcare systems. 

Collusion  in  tenders,  price  fixing  and  other  types  of  coordination  between  competitors 
belong  to  the  well-known,  and  at  the  same  time  the  most  reprehensible,  violations  of 
competition law.  

A  series  of  decisions  by  European  competition  authorities  sanctioned  conduct  aimed  at 
excluding  competitors  or  limiting  their  ability  to  compete,  typically  by  shutting  out 
pharmaceutical suppliers’ access to either customers or production inputs, thus affecting 
their long-term ability to sell cheaper medicines. 

Limiting or interrupting supply of immunoglobulin 

In December 2021, the Romanian NCA sanctioned five suppliers of immunoglobulin and 
other  medicines  derived  from  human  plasma  –  Baxalta  Gmbh,  CSL  Behring  Gmbh, 

(118) Judgment of the Competition Appeal Tribunal of 7 June 2018. 

(119) Pursuant  to  Article  15(3)  of  Regulation  1/2003,  the  Commission,  acting  on  its  own  initiative,  may 
submit written observations ("amicus curiae" observations) to courts of the Member States where the 
coherent  application  of  Article  101  or  102  TFEU  so  requires.  With  the  permission  of  the  court  in 
question, it may also make oral observations. 

(120) Judgment of the Competition Appeal Tribunal of 10 March 2020. 

(121) Decision of the Competition and Markets Authority of 21 July 2022. This decision is currently again 

under appeal before the Competition Appeal Tribunal. 

46 

 
 
Biotest AG, Kedrion Spa and Octapharma AG – as well as the representative association 
of the producers of plasma protein therapies (‘PPTA’), with fines amounting to a total of 
RON  353,393,694  (approx.  EUR  71  million). (122)  Immunoglobulins  are  medical 
products that treat severe inflammatory and autoimmune diseases. 

The  Romanian  competition  authority  found  that,  in  the  period  2015-2018,  the  five 
undertakings,  which  gathered  in  a  task  force  organised  by  the  PPTA,  coordinated  their 
actions to limit and even disrupt the supply of immunoglobulin to the Romanian market. 
Companies  colluded  to  put  pressure  on  the  authorities  to  suspend  the  clawback  tariff 
(taxation  to  be  paid  by  producers/suppliers  of  reimbursed  medicines)  on  medicines 
derived  from  human  blood  or  human  plasma.  In  this  way,  the  undertakings  aimed  to 
improve their profit margins.  

During  the infringement  period, the immunoglobulin producers gradually decreased the 
volume of immunoglobulin supplied in Romania and then completely stopped the supply, 
endangering the lives of some patients.  

Following  the  investigation  by  the  NCA  initiated  in  2018  and  governmental  measures, 
almost all producers resumed the supply with immunoglobulins in Romania, and in 2019, 
the  total  volume  of  immunoglobulin  supplied  increased  with  about  130 %  compared  to 
2018, and further increased in 2020. 

Resale price maintenance (‘RPM’) 

The  Portuguese  NCA  sanctioned  Farmodiética  –  Cosmética,  Dietética  e  Produtos 
Farmacêuticos, S.A. for fixing the resale prices of its products in Portugal, both through 
direct and indirect means, implementing a monitoring system and creating incentives for 
the  implementation  of  such  fixed  prices. (123)  The  NCA  found  that  such  behavior  is 
amounted to a serious breach of Article 101(1) TFEU, and sanctioned Farmodiética with 
a  fine  of  EUR  1,258,900  (after  a  30 %  reduction  as  the  company  agreed  to  settle  the 
case).  

In  May  2021,  the  Italian  NCA  opened  an  investigation  upon  a  complaint  that  SOFAR 
S.p.A.,  a  producer  of  probiotics,  would  have  required  online  retailers  to  charge  to  its 
customers fixed resale prices for the product Enterolactis Plus, and would have admitted 
only  a  few  dealers  to  its  distribution  network  to  sell  the  product  on  e-commerce 
platforms. To address the concerns expressed by the NCA, SOFAR offered commitments 
which the NCA considered  suitable to  restore  competition  and made binding through a 
commitment  decision (124).  The  company  committed  to  not  apply  any  minimum  resale 
prices, to not restrict the freedom of its dealers to sell the SOFAR products on any trade 
channels and to communicate this in a memorandum to its dealers.  

Coordination between pharmacies and pharmaceutical companies  

In 2017, the Lithuanian Ministry of Health decided to assess the need to change the retail 
and wholesale margins of pharmaceuticals  laid down in  Lithuanian law  and thus  asked 
the  Lithuanian  Pharmacy  Association  (‘LPA’)  to  submit  proposed  margins  based  on 

(122) Decision of the Consiliul Concurentei of 20 December 2021. 

(123) Decision of the Autoridade da Concorrência of 15 November 2022.  

(124) Decision of the Autorità Garante della Concorrenza e del Mercato of 3 December 2021. 

47 

 
 
reimbursable  pharmaceuticals  were  coordinated  between 

economic calculations. However, the Lithuanian NCA found that the  proposed margins 
the  LPA  and  8 
of 
pharmaceutical companies, and covered not only the costs incurred by the companies, but 
also ensured additional profits to the competitors. In the NCA’s view, a coordination of 
undertakings’  proposals  and  data  with  a  view  of  distorting  the  market  infringes 
competition  law,  as  in  the  absence  of  that  collusion,  the  Ministry  could  have  taken  its 
decision based on a set of different submissions. The competitors were fined more than 
EUR 72 million. (125) The NCA invited the Ministry and the Government to re-evaluate 
and,  if  appropriate,  to  amend  the  established  legal  framework,  as  well  as  to  set  new 
wholesale and retail margins for reimbursable pharmaceuticals.  

Vaccine cartel 

In February 2022, the Belgian NCA adopted a settlement decision by which it sanctioned 
two  pharmaceutical  wholesalers,  Febelco  CV  and  Pharma  Belgium-Belmedis  SA,  for 
having  participated in  a  cartel  involving  direct  sales from  pharmaceutical  companies  to 
pharmacists  and  flu  vaccines. (126)  The  wholesalers  had  agreed  to  apply  the  same 
commercial conditions for the distribution of pharmaceutical products via a ‘direct sales 
to pharmacists’ system and for sales of flu vaccines to pharmacists during the pre-sales 
periods. In particular, the companies agreed not to grant discounts to pharmacists and not 
to  accept  returns  of  unsold  vaccines  ordered  during  the  pre-sale  period.  The  NCA 
imposed  a  total  fine  of  EUR  29,8  million  on  Pharma  Belgium-Belmedis.  Febelco  was 
granted immunity from fines for having disclosed the existence of the cartel.  

Bid rigging, market sharing and exchange of commercially sensitive information 

The Spanish NCA fined the two main suppliers of PET radiopharmaceuticals, Advanced 
Accelerator  Applications  Ibérica  (AAA)  and  Curium  Pharma  Spain  for  sharing  the 
market  for  supply  contracts  for  this  drug  for  at  least  four  years.  AAA  and  Curium 
adopted a two-fold strategy. Instead of competing, they agreed on bid rigging in tenders 
(e.g. not submitting an offer or making errors in the tender process in order to not win the 
tender) and afterwards to subcontract the service to each other at lower prices. The NCA 
imposed a fine of EUR 5.76 million on the two pharmaceutical companies and also fines 
of EUR 46,000 fines on two of their managers, after finding them directly responsible for 
the infringements. (127)  

The United Kingdom NCA fined King, Lexon (UK) Ltd and Alissa Healthcare Research 
Ltd  for  illegally  sharing  commercially  sensitive  information  in  an  attempt  to  keep 
nortriptyline prices up. Between 2015 and 2017, when the cost of the drug was falling, 
the three suppliers exchanged information about prices, the volumes they were supplying, 
and  Alissa’s  plans  to  enter  the  market.  The  NCA  imposed  fines  totalling  GBP  1,47 
million (EUR 1.73 million). (128) 

(125) Decision of the Konkurencijos taryba of 9 December 2022. 

(126) Decision of the Autorité  belge  de la concurrence  / Belgische Mededingingsautoriteit of 18 February 

2022. 

(127) Decision of the Comisión Nacional de los Mercados y la Competencia of 2 February 2021. 

(128) Decision  of  the  Competition  and  Markets  Authority  of  4  March  2020  (information  exchange).  This 

decision was appealed to the Competition Appeal Tribunal and upheld on appeal. 

48 

 
 
In  a  separate  decision,  the  NCA  also  found  that  King  Pharmaceuticals  Ltd  and  Auden 
Mckenzie (Pharma Division) Ltd shared out between them the supply of nortriptyline to a 
large pharmaceutical wholesaler. From September 2014 to May 2015, the two companies 
agreed that King would supply only 25mg and Auden Mckenzie only 10mg tablets. The 
firms  also  colluded  to  fix  quantities  and  prices.  As  a  result,  the  NCA  fined  King  and 
Accord-UK  GBP  75,573  (EUR  88,915)  and  GBP  1,882,238  (EUR  2.2  million) 
respectively.  On  top  of  this,  Accord-UK  and  Auden  Mckenzie  have  agreed  to  make  a 
GBP 1 million (EUR 1.17 million) payment to the British National Health Service (NHS) 
in connection with the case. (129) 

The United Kingdom NCA further fined three pharmaceutical companies for taking part 
in an illegal arrangement in relation to the supply of life-saving medicine fludrocortisone, 
a prescription-only medicine mainly used to treat adrenal insufficiency. The NCA found 
that  the  companies  Amilco  and  Tiofarma  had  agreed  to  stay  out  of  the  fludrocortisone 
market  so  that  Aspen  could  maintain  its  position  as  the  sole  supplier  in  the  UK.  In 
exchange, Amilco received a 30 % share of the increased prices that Aspen was able to 
charge,  and  Tiofarma  was  given  the  right  to  be  the  sole  manufacturer  of  the  drug  for 
direct sale in the UK. Following the agreement, and as a result of this collusion, the price 
of  fludrocortisone  supplied  to  the  NHS  increased  by  up  to  1800 %.  The  investigation 
resulted in  fines  totalling almost  GBP  2.3 million (EUR  2.5 million) and a payment of 
GBP 8 million (EUR 8.7 million) directly to the NHS. (130) 

Other practices aimed at excluding competitors 

A  series  of  decisions  by  European  competition  authorities  sanctioned  conduct  aimed  at 
excluding  competitors  or  limiting  their  ability  to  compete,  typically  by  shutting  out 
pharmaceutical suppliers’ access to either customers or production inputs, thus affecting 
their long-term ability to sell cheaper medicines. 

In 2019, the Belgian NCA adopted a decision condemning the Order of Pharmacists for 
attempting  to  hinder  the  MediCare-Market  group’s  uptake  and  development  using 
disciplinary  proceedings  against  pharmacists  belonging  to  the  group.  According  to  the 
Ordre  des  Pharmaciens,  MediCare-Market's  business  model  would  create  confusion 
between  pharmacy  and  parapharmacy  goods,  both  of  which  are  found  in  MediCare-
Market  stores  (although  there  is  a  physical  separation  between  the  two).  In  2020,  the 
Court of Appeal annulled the decision insofar as it set the amount of the fine at EUR 1 
million, while confirming the infringement and the very principle of imposing a fine. (131) 

In  a  separate  case,  the  Belgian  Order  of  Pharmacists  was  also  fined  EUR  225,000  for 
some  of  its  decisions  limiting  the  ability  of  pharmacists  to  advertise.  (132)  The  NCA 
reached  a  settlement  with  the  Order  of  Pharmacies  which  committed  among  others  to 
adapt its Code of Ethics and to regularly review the explanatory code on advertising and 

(129) Decision of the Competition and Markets Authority of 4 March 2020 (market sharing). 

(130) Settlement Decision of the Competition and Markets Authority  of 3 October 2019 and infringement 

Decision of 9 July 2020. 

(131) Decision  of  the  Autorité  belge  de  la  concurrence  /  Belgische  Mededingingsautoriteit  of  26  March 

2021. In 2021 the Belgian NCA adopted a final decision lowering the fine to EUR 245,000. 

(132) Decision  of  the  Autorité  belge  de  la  concurrence  /  Belgische  Mededingingsautoriteit  of  16  October 

2019. 

49 

 
 
commercial practices in view of avoiding restrictive interpretations of competition by the 
disciplinary bodies. 

The  Greek  NCA  fined  the  Karditsa  Pharmaceutical  Association  EUR  2,096  for 
preventing  a  number  of  pharmacies  of  Karditsa  from  operating  during  the  extended 
opening hours of pharmacies regulation that was applicable at that time. (133) 

In  2020,  the  United  Kingdom  NCA  launched  an  investigation  upon  concerns  that 
Essential  Pharma  would  discontinue  supply  of  its  drug  Priadel  -  used  to  treat  bipolar 
disorder - in circumstances where the potential alternative drugs for patients were more 
expensive and where the process of switching may have resulted in significant harm to 
patients.  Immediately  following  the  opening  of  the  investigation,  Essential  Pharma 
paused  the  withdrawal  of  Priadel  and  entered  into  price  negotiations  with  the  British 
Department  for  Health  and  Social  Care,  resulting  in  a  new  price  being  agreed.  It  then 
offered  binding  commitments  to  the  NCA  for  a  period  of  5  years  to  ensure  continued 
supply of Priadel, which were accepted by the NCA. (134) 

5.4.  Merger control and affordable medicines 

Competition  law enforcement against abuses of dominant  position and anti-competitive 
coordination  is  complemented  by  the  review  of  mergers  that  could  result  in  market 
structures that free companies from competitive constraints and may thus result in higher 
prices for medicines. 

5.4.1. How do mergers affect the pricing of medicines? 

Mergers  of  pharmaceutical  companies  can  create  or  increase  the  market  power  of  the 
merged  entity  by  eliminating  competitive  pressure  between  the  merging  parties  and 
reducing competitive pressure in the market. The greater the market power arising from a 
merger,  the  more  likely  it  is  that  it  results  in  higher  prices  and  harm  to  patients  and 
healthcare systems. 

A  key  objective  of  merger  control  in  the  pharmaceutical  sector  is  to  ensure  that  the 
changes in the market structure due to a merger do not result in higher prices. This leads 
to  scrutiny  irrespective  of  whether  a  merger  concerns  originator,  generic  or  biosimilar 
competition.  For example, a merger between an originator and a generic  company may 
significantly  impede  price  competition  between  the  originator’s  products  and  their 
cheaper generic versions. Generics are normally full substitutes of the originator product 
and competition takes place mostly on price (135). 

The negative price  effects  of  mergers  can be significant. Reduced  competitive pressure 
may enable the merged company to raise its own prices (directly or by reducing rebates, 
discounts,  by  renegotiating  increased  prices  with  national  healthcare  authorities,  by 
withholding  the  launch  of  a  cheaper  generic  etc.)  but  can  also  lead  to  an  increase  of 
prices in the market as a whole (136).  

(133) Decision of the Επιτροπή Ανταγωνισμού of 2 December 2020. 

(134) Decision of the Competition and Markets Authority of 18 December 2020. 

(135) The Commission refers to the homogeneous nature of generic in a number of decisions, for example 

in M.7559 - Pfizer/Hospira. 

(136) These are the so-called ‘non-coordinated or unilateral effects’ on price.  

50 

 
 
5.4.2. How does merger control prevent price increases from mergers? 

EU merger control rules mandate the Commission to intervene where the merger is likely 
to adversely affect competition. An illustrative example is the Mylan/Upjohn case, where 
the combination of Mylan, one of the top five generic suppliers in the EEA, with Upjohn, 
which  marketed  Pfizer’s  off-patent  branded  and  generic  medicines,  threatened  to 
eliminate competition in a number of markets. 

Box 14: The Mylan/Upjohn case (April 2020) 

The  transaction  related  to  a  merger  between  the  global  pharmaceutical  company  Mylan  and 
Upjohn,  a  business  division  of  Pfizer,  which  operated  Pfizer’s  off-patent  branded  and  generic 
medicines, including well known products under the brands Viagra, Xanax and Lipitor. Already 
prior to the merger, Mylan was one of the five largest suppliers of generic medicines in the EEA. 

The  Commission investigated the market impact  of  the  transaction  by  gathering  evidence  from 
the parties, including a detailed review of their business documents, and from their customers and 
competitors.  This  process  revealed  that  there  was  direct  competition  on  prices  between  all 
versions of a given off-patent molecule (including generics and the off-patent originator product). 
The Commission found that the merger would harm competition for 12 molecules by giving the 
merged entity a strong position in several Member States and removing a source of competitive 
pressure. 

These areas of concern related to various areas such as cardiovascular, musculoskeletal, nervous 
system and urinary tract diseases. For example, the Commission found that in Greece, Iceland, 
Ireland, Italy and Portugal the deal would harm competition for alprazolam, which is used to treat 
anxiety and panic  disorders (it was sold by Upjohn under the brand name Xanax, while Mylan 
supplied  an  unbranded  version).  Prior  to  the  merger,  Upjohn  was  in  most  cases  already  the 
leading supplier, and the deal would strengthen its market power, in some cases leading to a near-
monopoly with few credible alternatives to put pressure on prices. 

To  address  the  Commission’s  concerns,  including  the  risk  of  price  increases,  the  companies 
offered  remedies.  Specifically,  they  committed  to  selling  Mylan’s  business  for  those  products 
where  a  concern  was  identified,  including  marketing  authorisations,  contracts  and  brands.  This 
resulted in various medicines in over 20 countries throughout the EEA and the United Kingdom 
being sold to four different purchasers, who could actively develop these businesses in a way that 
competes with and puts pricing pressure on with Mylan/Upjohn.  

The Mylan/Upjohn case is one instance where, thanks to the Commission’s investigation, 
concerns, including over  possible price increases, were identified and addressed through 
proposed  divestitures.  In  recent  years,  the  Commission  has  tackled  this  risk  in  a  broad 
range  of  markets,  spanning  from  over-the-counter  pharmaceutical  products  for  pain 
management  (GlaxoSmithKline/Pfizer’s  consumer  health  business)  to  irritable  bowel 
disease  (AbbVie/Allergan,  Takeda/Shire).  In  one  case  involving  haemostatic  patches  to 
manage  bleeding  during  surgery,  the  parties  decided  to  terminate  the  merger  after  the 
Commission identified concerns that the deal could keep prices high (or reduce choice or 
innovation)  by  preventing  the  entry  of  a  new  product  in  Europe  (Johnson  & 
Johnson/Tachosil). 

In cases where the Commission intervenes and the companies offer a commitment to fix 
the identified concerns (conditional clearance), the Commission’s role does not end with 
its  decision.  The  Commission  remains  active  to  ensure  that  the  remedies  are  properly 
implemented  in  practice.  In  particular,  the  Commission,  with  the  help  of  monitoring 
trustees,  vets  the  process  of  selecting  a  suitable  buyer  for  the  divested  business  and 
ensures  that  the  viability  and  competitiveness  of  the  entire  divested  business  is  not 
compromised  until  its  transfer  to  the  buyer.  Also,  once  the  divested  business  has  been 
sold to the purchaser, the Commission may continue to monitor transitional agreements 

51 

 
up until the business becomes fully independent of the merged entity (i.e. transfer of the 
marketing  authorisations,  production  transfer  to  the  buyer’s  own  manufacturing  plant 
etc.). 

6.  COMPETITION DRIVES INNOVATION AND INCREASES THE CHOICE OF MEDICINES 

As  described  in  Section  3.2.1,  innovation  is  of  key  importance  in  the  pharmaceutical 
sector  with  the  most  prominent  healthcare  benefits  flowing  from  R&D  into  novel 
treatments. This R&D may lead to new medicines for previously untreated conditions or 
to  medicines which may treat  given conditions  more effectively  and/or  with  fewer side 
effects. It can also lead to the discovery that an existing medicine can be used for other 
conditions for which it has not previously been prescribed. 

In  addition,  innovation  may  also  reduce  the  cost  of  treatments,  for  example,  by 
developing  production  processes  that  make  it  viable  for  cheaper  medicines  to  be 
commercially produced. Innovation may also create new, more efficient technologies that 
lead to higher quality medicines being produced. Therefore, while innovation remains a 
particularly  significant  competitive  force  in  pharmaceutical  markets,  the  companies 
active  in  these  markets  may  use  various  practices  to  ease  the  pressure  of  having  to 
constantly  innovate  (e.g.  defensive  patenting  which  aims  to  interfere  with  a  competing 
R&D project). Such practices may in specific circumstances be anti-competitive and be 
particularly harmful for patients and national healthcare systems. 

6.1.  Antitrust enforcement fosters innovation and choice 

This  Section  6.1  describes  how  enforcement  contributes  to  improving  patients’  choice 
and  access  to  innovative  medicines  by  intervening  where  companies,  unilaterally  or 
jointly, relax competitive pressures that force them to innovate further or prevent others 
from  innovating,  Section  6.2  then  explains  how  the  Commission,  under merger  control 
rules,  may  prevent  mergers  that  are  likely  to  reduce  or  harm  innovation,  and,  in  its 
assessment, take into account possible positive effects of mergers on innovation (137).  

6.1.1. Enforcement  against  practices  preventing  innovation  or  limiting  patient 

choice 

Market  participants  do  not  always  welcome  innovation.  It  can  disrupt  or  even  entirely 
undermine  their  markets.  There  might  not  be  much  they  can  do  to  stop  innovation  by 
competitors. However, they can make it hard for innovative products to reach consumers. 
Antitrust enforcement can help ensure that companies do not abuse their power or enter 
into arrangements that hold back innovation. 

In 2022 the Commission opened a formal antitrust investigation to assess whether Vifor 
Pharma has restricted competition by illegally disparaging one of its closest competitors 
for  the  provision  of  intravenous  iron  treatment,  Pharmacosmos. (138)  Vifor  Pharma’s 
conduct  appears to  be aimed at  hindering  competition  against its blockbuster high-dose 
intravenous  iron  treatment  medicine,  Ferinject,  from  another  innovator  medicine, 

(137) The  Commission  has  commissioned  a  study  to  analyse  the  impacts  of  mergers  and  acquisitions  on 

innovation in the pharmaceutical sector. Publication of the results is due in 2019. 

(138) https://ec.europa.eu/commission/presscorner/detail/en/ip_22_3882.  

52 

 
 
Monofer. Approximately 1.8 million patients suffering from iron deficiency are currently 
being  treated  with  high-dose  intravenous  iron  products  annually  in  the  EEA.  The 
Commission is concerned that Vifor Pharma may have been disparaging Pharmacosmos’ 
product  Monofer  by  spreading  misleading  information  regarding  its  safety,  primarily 
targeting  healthcare  professionals.  If  the  Commission's  concerns  are  proven,  Vifor 
Pharma's  behaviour  may  amount  to  an  abuse  of  dominant  position  and  infringe  Article 
102  of  the  TFEU  and  Article  54  of  the  EEA  Agreement.  The  opening  of  formal 
proceedings does not in any way prejudge the outcome of the investigation. 

6.1.2. Competition rules support procompetitive co-operation on innovation 

Competition  authorities  need  to  be  mindful  not  only  of  the  potentially  negative  effects 
that  a  practice  under  investigation  may  have  on  the  market,  but  also  of  the  possible 
positive  effects  competition  law  enforcement  should  preserve,  and  ideally  improve. 
Numerous  competition  rules  acknowledge  that  companies’  behaviour  may  result  in 
synergies  that  could  further  encourage  innovation  (for  example  from  combining 
complementary assets required to engage in R&D or from technology licensing). These 
rules also help companies to design their co-operation projects so that they comply with 
competition  law  and  avoid  enforcement  from  the  competition  authorities.  In  2019,  the 
Commission started an evaluation of the EU 2010 Block Exemption Regulation on R&D 
agreements (139)  and  adopted  on  1  June  2023  the  revised  Horizontal  Block  Exemption 
Regulations  on  R&D  and  Specialisation  agreements  (‘HBERs') (140),  accompanied  by 
revised  Horizontal  Guidelines (141).  The  HBERs  exempt  R&D  and  specialisation 
agreements  from  the  prohibition  in  Article  101(1)  of  the  TFEU,  subject  to  certain 
conditions. The rules thus provide for a safe harbour where certain agreements are block-
exempted from the competition rules.  

6.2.  Merger control preserves competition on innovation for medicines 

The Commission’s control of pharmaceutical mergers ensures not only that healthy price 
competition is maintained for the benefit of patients and national healthcare systems, but 
also  that  R&D  efforts  to  launch  new  medicines,  or  to  extend  the  therapeutic  use  of 
existing medicines, are not diminished as a result of a merger.  

Several  recent  pharmaceutical  mergers  investigated  by  the  Commission  show  the 
possible impact  of mergers on the incentives  for pharmaceutical  companies to  continue 
developing  parallel  R&D  programmes  after  a  merger.  In  some  of  these  cases,  the 
Commission  required  appropriate  remedies  to  approve  a  proposed  merger  that  would 
have  otherwise  threatened  to  halt  or  hinder  the  development  of  a  promising  new 
medicine.  

(139) Commission  Regulation  (EU)  No  1217/2010  of  14  December  2010  on  the  application  of  Article 
101(3) of the Treaty on the Functioning of the European Union to certain categories of research and 
development agreements (OJ L335, 18.12.2010, p. 36). 

(140) Commission Regulation (EU) 2023/1066 of 1 June  2023 on the application of Article 101(3) of the 
Treaty on the Functioning of the European Union to certain categories of research and development 
agreements (OJ L 143, 2.6.2023). 

(141) Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union 

to horizontal co-operation agreements (OJ C 259, 21.7.2023). 

53 

 
 
6.2.1. How can mergers harm innovation in the pharmaceutical sector? 

Consolidation in an industry may have a neutral impact on competition, or may even be 
pro-competitive if it combines the complementary activities of the merging firms, and as 
a result strengthens the ability and incentive to bring innovation to the market. This can 
be true even of large acquisitions: for instance, during its the 2019 investigation into the 
acquisition by BMS of Celgene, one of the largest pharmaceutical acquisitions in history 
with  a  value  of  USD  74  billion,  the  Commission  carefully  assessed  the  competitive 
landscape to ultimately conclude that transaction could be cleared as it would not result 
in any loss of competition within the EEA. 

Conversely,  mergers  may  also  curb  the  scale  or  scope  of  innovation,  and  patients  and 
physicians may have a more limited choice of future innovative treatments. For example, 
this  may  be  the  case  where  one  merging  company's  pipeline  product  would  be  in 
competition  with  another  company's  marketed  product,  and  thus  be  likely  to  capture 
significant revenues from the other company's competing product. If this is the case, the 
merged company may be inclined to discontinue, delay or redirect the competing pipeline 
project in order to increase the profits of the merged entity. Similarly, merging firms may 
be working on competing R&D programmes, which would divert profitable future sales 
from each other in the absence of the merger. By bringing two competing firms under a 
single ownership, a merger may reduce the incentives to engage in parallel R&D efforts. 

Reducing  competition  on  innovation  means  that  patients  and  healthcare  systems  would 
forego  future  benefits  from  innovative  and  affordable  medicines.  Harmful  effects  may 
include a loss of potentially better treatments, reduced future variety of medicines on the 
market,  delayed  access  to  medicines  needed  for  the  treatment  of  their  conditions,  and 
higher prices.  

6.2.2. How can merger control preserve conditions for innovation? 

Merger  control  seeks  to  ensure  that  the  transaction  does  not  significantly  impede 
competition,  including  on  innovation (142),  ultimately  leading  to  higher  prices  or  less 
choice  for  patients.  Where  innovation  concerns  are  detected,  the  Commission  can 
prohibit  the  transaction  unless  the  companies  offer  appropriate  remedies  designed  to 
preserve  the  ability  and  incentives  to  innovate  and  restore  effective  competition  in 
innovation. Such remedies may include a divestment of pipeline products, or underlying 
R&D capabilities.  

Innovative medicines were the focus of several recent merger investigations, highlighting 
the  Commission’s  efforts  in  preserving  innovation  in  relation  to  originator  chemical 
drugs and biological and biosimilar medicines. In some instances, the Commission acted 
to  preserve  competition  from  medicines  in  the  early  stages  of  product  development.  It 
can also act to ensure that a merger does not result in a company having a monopoly of 
R&D resources and capabilities in a given pharmaceutical field. (143)  

(142) On the possible impact of a merger on innovation, see in particular Guidelines on the assessment of 
horizontal  mergers  under  the  Council  Regulation  on  the  control  of  concentrations  between 
undertakings, 2004/C 31/03, paragraph 38. 

(143)  The Commission’s practice is to investigate four ‘layers’ of competitive overlap between the merging 
parties’ activities: (i) whether their marketed products compete, (ii) whether the marketed products of 
one  player  compete  with  the  pipeline  drugs  in  development  of  the  other,  (iii)  whether  the  parties’ 
pipeline drugs compete, and (iv) the extent of overlap in R&D capabilities more generally. Recently, 

54 

 
 
 
In 2022, the Commission launched an ex-post evaluation study (144) into the phenomenon 
of “killer acquisitions” in the pharmaceutical sector – that is, transactions that likely had 
as  their  object  or  effect  the  discontinuation  of  overlapping  drug  research  and 
development  projects  (including  both  pipeline-to-pipeline  overlaps  and  marketed-to-
pipeline  overlaps)  to  the  detriment  of  competition.  The  study  assesses  transactions, 
whether  in  the  form  of  concentrations  or  of  agreements  such  as  IP  acquisitions  and 
licensing,  occurring  in  the  period  2014-2018  and  will  devise  both  a  typology  of  the 
phenomenon’s manifestations in practice and a workable methodology that will help the 
Commission to better identify such transactions in the future. 

The  Commission  intervenes  where  a  merger  between  two  originator  companies  would 
result  in  less  competition  to  innovate  and  bring  new  or  improved  treatments  onto  the 
market. For example, the drive to develop effective treatments for irritable bowel disease 
has led to consolidation in the industry, which required the Commission to intervene in 
two  recent  cases  which  were  both  resolved  with  a  remedy  (AbbVie/Allergan  and 
Takeda/Shire). In AbbVie/Allergan, for instance, the Commission’s concerns came from 
the fact that one company already marketed a treatment for a particular condition, while 
the other was developing a drug for the same purpose. 

Box 15: The AbbVie/Allergan case (January 2020) 

AbbVie  is  a  global  pharmaceutical  company  with  a  broad  portfolio,  which  was  developing 
several biologic drugs for ulcerative colitis and Crohn’s diseases (together referred to as irritable 
bowel diseases (“IBD”)). IBD are lifelong autoimmune diseases that involve inflammation of the 
digestive tract and for which there is no cure.  

At the time of the transaction, Allergan was  also developing a treatment for IBD. Both parties’ 
drugs belonged to a promising class of biologics called “IL-23 inhibitors”, and the Commission 
found that these two pipelines were expected to be close competitors, facing limited competition 
as  there  were  only  two  other  competing  pipelines  being  developed  worldwide.  As  a  result,  the 
acquisition would lead to duplicate clinical programmes in AbbVie’s portfolio.  

The  Commission  was  concerned  that  AbbVie  would  not  have  continued  to  develop  Allergan’s 
product,  as  it  could  have  taken  sales  away  from  the  alternative  product  that  AbbVie  was 
developing. In its assessment, the Commission took into account the expected benefits of having 
both of these two innovative drugs available for patients and healthcare systems, especially given 
that there were few close alternatives being developed. 

To  restore  the  conditions  needed  for  continued  innovation  concerning  this  pipeline  project, 
AbbVie offered to sell Allergan’s pipeline product, including the rights to develop, manufacture 
and  sell  the  product  worldwide,  to  a  suitable  purchaser.  This  purchaser  would  ensure  that  the 
development  of  this  drug  is  continued,  removing  the  Commission’s  concerns.  Ultimately, 
AbbVie proposed to sell this drug to AstraZeneca, which the Commission approved. 

Without  this  remedy,  Allergan’s  drug  would  probably  have  been  discontinued  to  avoid  a 
duplication in pipelines. Therefore, it is likely that the remedy has helped to maintain innovation 
and competition in the treatment of IBD. These conditions are important, so as to deliver a wider 
choice of innovative treatments and better care for patients. 

the Commission has investigated cases looking at pipelines at an early stage of development or even 
in appropriate instances at pre-clinical stage (see, for example, cases M.9294 BMS/Celgene, M.10165 
AstraZeneca/Alexion, M.10629 CSL/Vifor). 

(144) COMP/2021/OP/0002  –  Ex  post  evaluation:  EU  competition  enforcement  and  acquisitions  of 
innovative  competitors  in  the  pharma  sector  leading  to  the  discontinuation  of  overlapping  drug 
research and development projects. The Final Report of the study is due 30 January 2024. 

55 

 
 
Merger control also involves making sure that M&A does not lead to a situation where an 
important  supplier  harms  its  customers  in  order  to  benefit  the  part  of  its  own  business 
that  competes  with  those  customers.  This  was  the  reason  why  the  Commission 
investigated the Illumina/GRAIL case and ultimately decided to block the proposed deal. 
While this case is not a pharmaceutical case, rather involving novel diagnostic tests for 
cancer, it illustrates the importance of the Commission’s actions to protect innovation so 
that  patients  and  healthcare  systems  ultimately  have  access  to  a  range  of  cutting-edge 
tools in the fight against cancer.  

Box 16: The Illumina/GRAIL case (September 2022) 

This  case  was  the  first  instance  in  which  the  Commission  applied  its  revised  approach  to  case 
referrals,  inviting  NCAs  to  refer  the  case  to  it  even  though  the  transaction  did  not  meet  either 
national or EU-wide notification thresholds. This was appropriate, as the target had virtually no 
revenue  but  was  developing  a  highly  promising  product  and  had  very  significant  competitive 
potential. 

The case involved the development of early cancer detection tests, which may revolutionise the 
ways in which cancer can be spotted in currently asymptomatic patients. Illumina supplies next 
generation sequencing (“NGS”) systems, which are diagnostic instruments used for a broad range 
of applications. One of the most prominent applications under development is to use Illumina’s 
sequencing  systems  to  develop  and  sell  tests  to  detect  cancer.  GRAIL  is  a  biotech  company 
relying  on  Illumina’s  NGS  systems  to  develop  a  test  which  it  claims  could  detect  around  50 
cancers at an early stage in patients without symptoms from a blood sample. Illumina proposed to 
acquire GRAIL for approximately USD 8 billion, though GRAIL had almost no turnover at the 
time as it was primarily a development company.  

The  Commission  investigated  the  deal  and  found  that  there  was  a  vibrant  and  active  race  to 
develop cancer detection tests and bring to market tests capable of detecting cancers at an early 
stage.  A  number  of  developers  were  investing  significant  capital  and  efforts  to  develop  cancer 
detection tests with a view to commercialising them worldwide, including in Europe and in the 
Member States whose NCAs had referred the case to the Commission. Illumina’s NGS systems 
are  at  the  core  of  this  process,  as  there  is  no  credible  alternative  to  its  systems,  which  are 
necessary to develop these tests and to offer them to patients. As a result, if it were allowed to 
buy GRAIL, Illumina would find it profitable to stop or slow down GRAIL’s rivals developing 
these  tests,  for  instance  by  stopping  supplies  to  rivals,  delaying  or  reducing  the  quality  of 
technical support or development collaboration, or increasing prices to raise rivals’ costs, so that 
GRAIL’s test is the first and most attractive on the market. This would give GRAIL a head-start 
over its rivals and reduce the competition it faces (including on prices), meaning that consumers 
and  health  systems  would  have  less  choice  and  would  need  to  pay  more  to  access  these  life-
saving  tests.  As  the  owner  of  GRAIL,  Illumina  would  be  able  to  gain  a  large  share  of  a  very 
profitable market expected to be worth more than EUR 40 billion annually by 2035. 

Although Illumina tried to offer remedies to resolve this concern, the Commission found them to 
be  insufficient  to  avoid  significant  harm  to  rival  test  developers  and,  ultimately,  to  consumers. 
Therefore,  the  Commission  prohibited  the  transaction,  making  sure  that  innovative  efforts  to 
develop  cancer  detection  tests,  a  vital  tool  in  the  fight  against  cancer,  can  continue  on  a  level 
playing field. To give effect to this prohibition decision, the Commission has ordered Illumina to 
divest GRAIL (and fined the parties for unlawfully closing the deal pending the investigation) – 
this divestment process is ongoing at the time of writing. (145) 

(145) Case M.10939 – Illumina/GRAIL (Restorative Measures under Article 8(4)(a)). 

56 

 
 
7.  CONCLUSION  

The  above  overview  and  examples  of  competition  cases  investigated  and  decided  upon 
by European competition authorities between 2018 and 2022 clearly show that enforcing 
antitrust  and  merger  control  rules  helps  to  ensure  that  patients  and  healthcare  systems 
have better access to affordable and innovative medicines and treatments. 

Compared to the period 2009-2017 (9 years) covered in the previous report, the average 
number of pharma antitrust decisions adopted per year in the period 2018-2022 (5 years) 
increased from around 3 to 5. There is a constant if not increasing inflow of antitrust and 
merger cases in the pharmaceutical sector. Also, in light of the Covid-19 pandemic, this 
sector and healthcare in general have been a high priority across the EU.  

The  report  presents  a  broad  variety  of  anti-competitive  practices,  some  of  which 
investigated  for  the  first  time.  European  competition  authorities  have  tackled  these  and 
have set a number of ground-breaking precedents which clarified the application of EU 
competition  law  in  pharmaceutical  markets.  Effective  enforcement  of  EU  competition 
rules in the pharmaceutical sector remains a matter of high priority and the competition 
authorities  will  continue  to  monitor  and  be  pro-active  in  investigating  potential  anti-
competitive situations.  

While  it  significantly  contributes  to  improve  competition  in  pricing  and  innovation  by 
guidance  and  deterrence  through  precedents,  competition  law  enforcement  remains 
complementary  to  legislative  and  regulatory  action,  such  as  the  reform  of  the  EU 
pharmaceutical legislation and the Pharmaceutical Strategy. 

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