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European Commission Focuses New Report on Pharma Competition Enforcement

Posted 28 January 2019 | By Michael Mezher 

European Commission Focuses New Report on Pharma Competition Enforcement

The European Commission (EC) on Monday released a report on pharmaceutical competition enforcement activities by the Commission and EU member states' national competition authorities from 2009 to 2017.
 
The 46-page report was put together in response to concerns voiced by the European Council and Parliament in 2016 and 2017 regarding anticompetitive practices within the pharmaceutical sector, such as tactics to delay generic competition, pay-for-delay arrangements, price fixing and excessive pricing.
 
According to the report, the Commission and other authorities investigated more than 100 cases of anticompetitive practices over the period, resulting in 29 decisions against drugmakers resulting in fines or other remedies. Another 20 cases from that time are still undergoing investigation.
 
In total, the Commission says that 21 drugmakers were fined €1.07 billion over the nine-year period.
 
The Commission itself was responsible for €590 million of the fines, followed by the UK and Italy, which levied €199 million and €176 million in fines, respectively.
 
The report also found that abuse of market dominance was the most common anti-competitive practice identified by EU authorities (45%), followed by other types of anti-competitive agreements, including pay-for-delay arrangements (31%). Vertical agreements restricting the distribution, sale or promotion of products and "outright cartels" each accounted for 17% of cases.
 
The report also looked into the Commission's review of more than 80 mergers between drugmakers during that time, 19 of which raised competition concerns that could impact drug prices that had to be resolved before the Commission cleared the mergers.
 
The Commission found that some of the cases it reviewed highlighted anti-competitive practices "that had previously not been addressed under EU competition law," noting that the precedents set by those cases can help other companies ensure that their practices comply.
 
"Giving European patients and healthcare systems access to affordable and innovative medicines is one of Europe's main challenges and objectives. The report published today provides key insights into the valuable work that competition authorities across Europe are doing to ensure that pharmaceutical markets help achieve this goal," said EC Commissioner for Competition Marrethe Vestager.
 
The report also found that anti-competition enforcement "helped maintain the level of innovation" in the pharmaceutical industry and led to increased choice for consumers by pushing drugmakers to focus on new products or ensure that certain products in development were not compromised in mergers.
 
"The antitrust and merger cases cited in the report show that the pharmaceutical sector requires close scrutiny by competition authorities. The enforcement record of the Commission and the national competition authorities provides a solid basis for competition authorities to continue working and focusing their enforcement efforts in the sector," the Commission said.
 
EC, Report

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