Italian competition authority’s decision against Pfizer quashed by court

Last 3 September 2012, the Italian administrative court (“TAR”) quashed (the TAR ruling is available only in Italian) a decision of the Italian Competition Authority (“ICA”) which fined pharmaceutical company Pfizer EURO 10,6 million for an abuse of its dominant position to artificially extend the patent protection of its anti-glaucoma drug Xalatan and keep generic rivals out of the market in breach of Article 102 of the Treaty on the Functioning of the European Union (“TFEU”). The TAR held that Pfizer’s conduct was legitimate.

As it may be recalled (see Newsletter 1/2012 p. 9, Newsletter 3/2011 p. 7 and Newsletter 6/2010 p. 8 for background information), according to the ICA, Pfizer’s conduct to prolong patent protection for its active ingredient latanaprost in order to obstruct or delay the introduction of generic drugs competing with Xalatan, Pfizer’s branded product for the treatment of visual glaucoma, constituted an abuse of its dominant position by blocking or delaying market access to generics. The ICA concluded that Pfizer abused the administrative procedure by obtaining an extension to patent protection in Italy until July 2011, and again until January 2012, in order to align the duration of the patent protection for its product Xalatan with the rest of Europe. The ICA rejected Pfizer’s proposed commitments, because they were considered manifestly incapable of removing the anticompetitive effects of Pfizer’s conduct.

Contrary to the ICA’s findings, the TAR held that Pfizer’s proposed commitments were sound particularly in addressing ICA’s main concern of allowing market entry by generics to whom Pfizer would have granted a non-exclusive, royalty free license in Italy. The set of Pfizer’s commitments, according to the TAR, was likely to diminish the legal uncertainty created by Pfizer’s strategy, following the termination of certain litigation matters.

The TAR did not side with the ICA in respect to the theory of harm either. In essence, the TAR held that Pfizer had done nothing more than exercising its rights, stressing that in order to be regarded as anticompetitive, the practices under scrutiny had to be accompanied by a clear exclusionary intent and an additional anti-competitive element is necessary that goes beyond the existence of a simple set of legitimate actions carried out and brought before the competent administrative and jurisdictional authorities. In other words, the TAR required a clear exclusionary intent and other additional elements for an abuse of dominance to be established. [Gabriele Accardo]