The European Commission has published a report providing an overview of the enforcement of EU antitrust and merger rules by the Commission and the national competition authorities (‘NCAs’) in the pharmaceutical sector between 2018 and 2022.
The report shows that active enforcement of antitrust and merger rules continues to play an important role in delivering European patients access to a wider choice of affordable and innovative medicines. In particular, it helped to achieve this goal during the challenging period of the coronavirus pandemic.
The Commission drafted the report covering medicines and certain medical products in cooperation with the NCAs of the 27 EU Member States, with which the Commission works in the European Competition Network (‘ECN’). It follows a previous report covering the years 2009-2017 that was published in January 2019.
The authorities will continue their enforcement efforts in the pharmaceutical sector as a matter of high priority given its economic relevance and its impact on people’s well-being and lives.
Main findings of the report
Antitrust enforcement has contributed to fairer prices for medicines
Concerning anti-competitive agreements and cases of abuse of a dominant position, since 2018 the Commission and national competition authorities have:
- adopted 26 decisions against anti-competitive practices in the supply of medicines, by imposing fines totaling over €780 million or making legally binding commitments offered by companies to remedy their anti-competitive behavior; and
- investigated more than 70 other cases, 40 of which were ultimately closed and 30 of which are currently ongoing.
The anti-competitive practices concerned harmed innovation and prices, and ranged from: (i) the misuse of the patent system and abusive litigation to prolong patent exclusivity; (ii) the disparagement of a competitor’s products to protect the dominant company’s sales; (iii) pay for-delay agreements, where originator and generic companies colluded to keep generics off the market and share the originator’s profits from doing so; and (iv) excessive prices charged for off-patent medicines.
Merger control has kept medicines’ prices lower and markets competitive
Higher prices, concentrated markets, and reduced choice or research and development may also result from mergers between pharmaceutical companies. The Commission reviewed more than 30 mergers in the pharmaceutical sector and found concerns in five cases, where mergers could have led to price increases, patients and national health systems being deprived of some medicines, or a reduction in innovative efforts to develop new medicines. The Commission cleared four of these mergers only after the companies offered remedies to address the Commission’s concerns and preserve the existing degree of competition. One case was abandoned after the Commission raised initial competition concerns.
Proactive monitoring helped guide market operators
The competition authorities undertook 60 market monitoring and advocacy activities that (i) offered insight into the functioning of the markets; (ii) informed a more pro-competitive design of regulation and legislation; and (iii) provided guidance to market participants, and even triggered antitrust investigations in certain individual cases.
The report also describes the guidance and coordination initiatives undertaken by the ECN to respond to the coronavirus pandemic, in particular the joint Statement on the application of the EU antitrust rules in the context of the coronavirus outbreak, which was issued by the ECN and the EFTA Surveillance Authority. Such a statement was aimed at providing a common ECN response as to how EU competition law was to be applied during the crisis.