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Brussels, 1 July 2010
Antitrust: Commission welcomes Court judgment in AstraZeneca case
The European Commission welcomes the judgment of the General Court (Case T-321/05) which largely dismisses the appeal by the pharmaceutical companies AstraZeneca AB of Sweden and AstraZeneca Plc of the UK. The General Court's ruling concerns the Commission decision of June 2005 that imposed a fine of €60 million on AstraZeneca for misusing the patent system and the procedures for marketing pharmaceutical products to prevent or delay the market entry of competing generic medicinal products (see IP/05/737).
Today’s judgment is significant for several reasons. It upholds the Commission's first decision on abuse of dominance in the pharmaceutical markets. The judgment also lays down that the misuse of regulatory procedures, including the patent system, may constitute an infringement of EU competition rules. This is significant not least for the follow up to the Commission's final report on its competition inquiry into the pharmaceutical sector, published on 8 July 2009 (see IP/09/1098)
"This case is about the misuse of regulatory procedures which has the effect of blocking or delaying entry to the market of cheaper medicines, mainly by creating hurdles for generic products well beyond the period of protection granted by the legislator. Pharmaceutical companies are afforded legal protection for the innovative drugs they bring to the market. This is justified as it rewards innovation and generates revenues for further research in the sector. But companies should not misuse the patent system and the system for authorisation of medicines to extend the protection of their blockbuster products and delay the entry of generics into the market. Generic drugs benefit patients and governments that pay for medicines. I am determined to use competition rules whenever appropriate to fight such unfair and anticompetitive practices," said Joaquín Almunia, Commission Vice President in charge of Competition Policy.
The General Court confirmed that Article 102 of the Treaty on the Functioning of the EU, which prohibits abuses by dominant companies, applies to the pharmaceutical sector.
In determining the relevant market and AstraZeneca's dominance, the Court upheld the Commission's findings, which were based on an overall assessment of all relevant factors such as the products' characteristics and use as well as price and sales trends.
In relation to the first abuse, the Court confirmed that AstraZeneca's conduct amounted to "a consistent and linear course of conduct, characterised by the communication to the patent offices of misleading representations for the purpose of obtaining the issue of SPCs (Supplementary Protection Certificates) to which it was not entitled or to which it was entitled for a shorter period"1. Through its conduct, AstraZeneca obtained additional so-called SPC protection in several countries. Such intellectual property protection constitutes a principal entry barrier for generic versions of an original medicine. The Court rejected AstraZeneca's claims that its conduct constituted normal competition and that it could be explained by errors or unauthorised behaviour by AstraZeneca's patent agents.
As regards the second abuse, the Court validated the Commission's conclusion that a key purpose underlying AstraZeneca's deregistration of market authorisations for Losec in selected EEA countries was to exclude competition from generic firms and parallel traders. The Court ruled that the purpose of a market authorisation is to confer the right to market a pharmaceutical product and not to exclude competitors from the market. However, the decision is annulled insofar as it concerns the restrictions on parallel trade in two of the three countries concerned. The Commission will study the judgement carefully for its impact on ongoing and future cases.
The Commission Decision
On 15 June 2005 the Commission adopted a Decision fining the Swedish company AstraZeneca AB and the UK company AstraZeneca Plc €60 million for misusing the patent system and the procedures for marketing pharmaceuticals. In the first abuse AstraZeneca provided misleading information to parent offices in Belgium, Denmark, Germany, the Netherlands, Norway and the United Kingdom) with a view to excluding generic firms from competing against the company's anti-ulcer product Losec (see IP/05/737) The second concerned the use of rules and procedures applied by national medicines agencies which issue market authorisations for drugs.
Paragraph 598 of the judgment