ECJ upholds European Commission decision against AstraZeneca

On 1 July 2010, the European Union’s General Court (or “GC”, formerly the Court of First Instance) handed down its judgment against the AstraZeneca Group (“AZ”) for having abused its dominant position by preventing the market entry or the parallel imports of generic medicinal products competing with Losec, its anti-ulcer product. While the GC substantially upheld the European Commission’s decision, however it reduced AZ’s fine from Euro 60 million to Euro 52.5 million, because, according to the GC, the Commission failed to prove restriction of parallel imports in two of the three countries concerned.

In its press release, the Commission stressed that the significance of this judgment goes beyond its decision against AZ (the first abuse of dominance case in the pharmaceutical sector), as it will also have a bearing at least in the follow-up to the Commission’s final report on its competition inquiry into the pharmaceutical sector. Currently, there are two ongoing Commission investigations with respect to patent settlements against Les Laboratoires Servier (see Newsletter 4/2009 p. 7) and Lundbeck.

In fact, the judgment establishes that the misuse of regulatory procedures, including the patent system, which has the effect of blocking or delaying entry to the market of cheaper medicines, mainly by creating hurdles for generic products beyond the period of protection granted by the legislator, may constitute an abuse under Article 102 of the TFEU. In this respect, the GC found that AZ made misleading representations to the national patent offices, notably by adopting “a consistent and linear course of conduct, characterized by the communication to the patent offices of misleading representations for the purposes of obtaining the issue of Supplementary Patent Protection Certificates to which it was not entitled, or to which it was entitled for a shorter period.

As to the second abuse, the GC confirmed that while pharmaceutical companies are normally entitled to request the deregistration of marketing authorizations for their products, the goal AZ wanted to achieve with the deregistration of market authorizations for Losec in selected countries (Sweden, Denmark and Norway) was to exclude competition from generic firms and parallel traders.  (See also the ongoing investigation by the UK Office of Fair Trading investigation into Reckitt Benckiser in Newsletter 2/2010 p. 12.)

The Court ruled that the purpose of a market authorization is to confer the right to market a pharmaceutical product and not to exclude competitors from the market. AZ’s deregistration of the Losec capsule’s marketing authorizations had the effect of preventing the use of that simplified procedure and thus of making the acquisition of marketing authorizations for generic medicinal products more time-consuming and more difficult, thereby delaying their marketing. Yet, the GC held that the Commission failed to prove that the deregistrations of the marketing authorizations were capable of preventing parallel imports of Losec in Denmark and Norway. As a result, the GC reduced the fine imposed on AZ.  [Gabriele Accardo]