Pharmaceutical Antitrust: Global overview – Lexology

This article is an extract from GTDT Pharmaceutical Antitrust 2023. Click here for the full guide.

In the face of destabilising inflationary effects on consumers around the world, the pharmaceutical sector remains a top priority for governments and antitrust agencies. Global antitrust enforcers continue to carefully scrutinise any behaviour that may undermine patients’ access to innovative and affordable medicines. In 2022, competition law enforcement has been reinvigorated in ways that are outlined in this new edition of Lexology Getting the Deal Through: Pharmaceutical Antitrust. This revised chapter provides a comprehensive overview of the applicable legislation and recent developments across key jurisdictions, including the European Union, the United States and Asia.

In June 2022, the European Commission opened an abuse of dominance investigation into Vifor Pharma for allegedly spreading misinformation about its closest competitor in intravenous iron treatment. This is only the second time the European Commission has launched an exclusionary disparagement probe. 

European enforcement against collusion remains strong. In February 2022, the Belgium Competition Authority issued its first cartel sanction in five years, fining a pharmaceutical wholesaler €29.8 million for collusion. The Belgium Competition Authority settled with the second target of that cartel and is continuing an investigation into a third target for collusive behavior. In the same month, the Romanian Competition Counsel fined five pharmaceutical companies nearly €71 million for colluding to restrict the supply of immunoglobulin medications.

This past year showed that excessive pricing in the pharmaceutical sector remains in the spotlight. The United Kingdom’s Competition and Markets Authority defended its 2021 £100 million fine against pharmaceutical company Advanz and two private equity firms for excessive pricing of Advanz’s thyroid tablets. The Netherlands Authority for Consumers and Markets launched an investigation to see if three unnamed pharmaceutical companies forced healthcare providers to pay excessive prices for certain medicines and agree to unreasonable conditions that required them to purchase a variety of the companies’ services. In November 2022, Spain’s National Commission of Markets and Competition fined Leadiant Biosciences for excessively charging the national health system for an orphan drug that treats a metabolic disease. Earlier in May 2022, Italy’s Competition Authority fined Leadiant Biosciences for the same behavior. 

There are unique matters at play in Europe as well. In February 2023, the Pharmaceutical Accountability Foundation, a non-profit public interest group, filed an excessive pricing claim against AbbVie on behalf of all Dutch citizens with health insurance for allegedly abusing its monopoly on Humira. Dutch law allows non-profits to bring collective claims provided that the organisation has the statutory goal of promoting the common interest. In February 2022, Poland’s Office of Competition and Consumer Protection opened an investigation into eight pharmaceutical wholesalers and two software companies with the allegation that the companies unlawfully obtained access to rivals’ commercially sensitive information such as drug prices, discounts and margins.

In the United States, while there was much rhetoric around federal enforcement in the pharmaceutical sector, private litigation was more prominent. Most recently, Jazz Pharmaceuticals was ordered by an appellate court to de-list its US Food and Drug Administration Orange Book patent on the distribution system for its blockbuster narcolepsy drug, Xyrem, opening the door for a competitor to enter. Avadel CNS Pharmaceuticals (Avadel) initially sued Jazz Pharmaceuticals for using said patent to block Avadel’s generic Xyrem product; the Federal Trade Commission (FTC) filed an amicus brief in support of Avadel. In November 2022, three union pension funds sued Bristol Meyers Squibb for allegedly settling patent lawsuits with generic drug manufacturers in exchange for those competitors’ delayed entry for generic versions of Bristol Meyers Squibb’s blockbuster oncology drug Revlimid – this is the latest chapter in a decade-old pay-for-delay litigation related to Revlimid.

In June 2022, the FTC held a two-day workshop on pharmaceutical mergers that aimed to explore new ways to evaluate pharmaceutical mergers and take action against pharmaceutical benefit managers’ alleged steering practices. The FTC also issued an enforcement policy statement in the same month regarding pharmaceutical benefit managers’ allegedly exclusionary conduct in rebating and formulary placement. These recent actions have culminated in the FTC’s first pharmaceutical merger challenge of the Biden Administration. On 16 May 2023, the FTC sued to block the acquisition of Horizon Therapeutics plc by Amgen Inc on the novel theory of anticompetitive portfolio leveraging to maintain exclusive formulary positions. There are no competitive products between the two companies. The complaint also calls into question pharmaceutical benefit managers’ role in negotiating formulary positions and accepting bundled rebates. This proposed merger was called out specifically by Senator Elizabeth Warren as anticompetitive because of the ‘rampant consolidation in the pharmaceutical industry’ and the company’s ‘long history of corporate price gouging and monopolistic behavior’. 

This follows from the latest development in the Illumina/Grail matter. On 3 April 2023, the Commissioners of the FTC announced their decision to reverse the FTC’s administrative court decision. Illumina, Inc (Illumina) subsequently announced its intent to appeal the Commission’s decision. The FTC originally filed its complaint in March 2021 claiming that the deal would diminish innovation in the market for multi-cancer early detection tests. Illumina continues to fight on both sides of the Atlantic, with the European Commission’s move to unwind the acquisition after a historic Article 22 referral. Illumina seeks to resolve its US appeal in late 2023 or early 2024, at approximately the same time as the European Court of Justice jurisdictional appeal.

The pharmaceutical sector has also been closely scrutinised in Asia. Most recently, in March 2023, Japan’s Fair Trade Commission fined five pharmaceutical wholesalers for rigging bids to supply drugs to Japan’s largest hospital administrator, which contracts for 31 hospitals. China strengthened its enforcement by publishing a set of antitrust guidelines in November 2021 vowing to address anticompetitive behavior in the active pharmaceutical ingredient space. Moreover, China’s State Administration for Market Regulation in 2023 sanctioned and fined two manufacturers for excessive pricing: Tianjin Jinyao Pharmaceutical for charging excessive prices on its cancer drug carmustine; and Northeast Pharmaceutical Group for raising the price of a kidney drug levocarnitine. Additionally, the Philippine Competition Commission prioritised the pharmaceutical sector with the goal of making healthcare accessible and affordable; a laudable mission, as the Philippines lags in generics manufacturing and has some of the highest medicine prices in Asia.

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