Excessive Pharmaceutical Pricing as an Abuse of Dominant Position – The Case of CD Pharma (Denmark)

2021 ◽  
Author(s):  
Behrang Kianzad
Keyword(s):  
Public Procurement ◽  
Economic Value ◽  
Pharmaceutical Market ◽  
Market Definition ◽  
Competition Authority ◽  
The European Union ◽  
Pharmaceutical Pricing ◽  
Relevant Market ◽  
Dominant Position ◽  
Abuse Of Dominant Position

Abstract On 31 January 2018, the Danish Competition and Consumer Authority adopted a decision1 finding the Swedish company generic distributor CD Pharma in breach of Art. 102(a) Treaty on the Functioning of the European Union (TFEU) by abusing its dominant position and having imposed excessive and unfair prices for the drug Syntocinon. The company increased the price of the drug by 2000% in the period April-October 2014 in the Danish pharmaceutical market. CD Pharma appealed to the Danish Competition Appeals Board,2 which on 29 November 2018 upheld the decision by the Authority. On subsequent appeal to the Danish Maritime and Commercial Court,3 the judgment by the previous court was upheld in a 3-2 decision on 2 March 2020, thus finding CD Pharma liable for infringement of Danish competition law as well as Art. 102(a) TFEU. The decision is final and not subject to further appeal. The case raises outstanding legal-economic issues regarding excessive pricing such as relevant market definition in pharmaceutical cases, the length of abuse, competitive price benchmarks, definition of economic value and the matter of dominance in public procurement and tenders. The case is rather unusual in that the alleged abusive period amounted to a six-month period, CD Pharma was the ‘losing’ party in the bidding process for the supply of the medicine in question, and CD Pharma subsequently had reduced prices through negotiations with the Danish central medicine procurer, Amgros. Similar to the Aspen Pharma decision4 by the Italian Competition Authority, where the Italian Medicine Agency (AIFA) reported the case to the Competition Authority, it was the Danish medicine procurer Amgros who had notified the Danish Competition and Consumer Authority about allegedly abusive practices. This subsequently led to an investigation and the adoption of the Decision. Following an introduction describing the Danish pharmaceutical market and specifics of the case, section two of this contribution details the proceedings at Danish Competition Authority. Section three depicts the proceedings at Competition Appeals Tribunal, and section four deals with the proceedings at the Maritime and Commercial Court. Section five concludes.

scholarly journals EU LEGAL REGULATION OF COMPETITION IN INNOVATIVE MARKETS

2018 ◽  
pp. 25-35
Author(s):  
K. Smyrnova
Keyword(s):  
Competition Law ◽  
Legal Regulation ◽  
Evolutionary Development ◽  
Competition Authority ◽  
The European Union ◽  
Relevant Market ◽  
Dominant Position ◽  
Digital World ◽  
National Competition ◽  
Competition Laws

The digital world is highly dynamic. The only way of survival is to keep innovating, in some extend even invent a way (legal or illegal) to secure its position. As this new phenomenon becomes increasingly sophisticated, the need for laws to govern it becomes more poignant. In consequence, the European Union has taken various actions towards realizing this aim of regulating the digital platform horizon. The evolutionary development of active & passive selling through new electronic or other innovative means which is currently erases national borders leads to the comprehensive involvement of different national competition regimes. The competition authority has kept close scrutinizing on those firms in dominant position in their relevant market. Not only this, as the digital market is mostly multiple sided, the interaction between market are also taking care. However, the competition laws should adapt in the proactively to prevent the anti-competitive measures. The competition authority needs to have the anticipation on the dynamic evolution of competition in digital market and act proactively. Thus the most crucial aspect is to balance the innovative progress & the necessity to control on competition. This article examines how the nature and logic of competition law changes as authorities expand the time horizon that they consider in their prospective analysis.

scholarly journals Commitment Decisions: Is the Sky the Limit? - Commentary to Judgment of the General Court (Eighth Chamber) of 15 September 2016, Case T-76/14, Morningstar, Inc. v European Commission

2017 ◽  
Vol 1 (2) ◽  
pp. 195-212
Author(s):  
Rita Leandro Vasconcelos
Keyword(s):  
European Union ◽  
European Commission ◽  
Judicial Review ◽  
Case Law ◽  
The European Union ◽  
Dominant Position ◽  
Court Of Justice ◽  
Article 9 ◽  
Abuse Of Dominant Position ◽  
Limited Scope

In its judgment of 15 September 2016, the General Court ruled on whether the commitments offered by Thompson Reuters to the European Commission during an investigation of a possible abuse of dominant position were sufficient to address the competition concerns identified by the Commission. This is only the second time the Court of Justice of the European Union ruled on Commission decisions rendering binding the commitments offered by an undertaking Article 9 of Regulation 1/2003. With regard to standing, the General Court ruled the appeal lodged by a competitor admissible. As for substance, the General Court generally confirmed the previous case law. It ruled on the commitments meet the competition concerns identified by the institution, the different proportionality standard in Article 9 decisions as compared to Article 7 Regulation 1/2003 decisions (formal decision finding an infringement), and the limited scope of judicial review of the Court of Justice of the European Union in these appeals.

Review of judicial cases involving the competition authority

2021 ◽  
pp. 102-106
Author(s):  
L. V. Vovkivskaya ◽  
E. V. Savostina
Keyword(s):  
Law Enforcement ◽  
Foreign Investor ◽  
Competition Authority ◽  
Dominant Position ◽  
Antitrust Laws ◽  
Abuse Of Dominant Position ◽  
Administrative Responsibility

Analysis of the legal positions of arbitration courts in cases of violation of antitrust laws in terms of consideration of issues: exceptions to the patent monopoly, approaches to proving anticompetitive agreements, establishing the fact of being under the control of a foreign investor, abuse of dominant position, bringing to administrative responsibility in the absence of representatives of the person involved. Target: developing uniform approaches in law enforcement practice in cases of violation of antitrust laws.

scholarly journals Regulating The Pharmaceutical Industry In The European Union: A Dilemma Of Achieving A Single Market

2010 ◽  
Vol 9 (7) ◽  
Author(s):  
Aysegul Timur ◽  
Gabriel Picone
Keyword(s):  
European Union ◽  
European Commission ◽  
Single Market ◽  
Pharmaceutical Market ◽  
Parallel Trade ◽  
Hedonic Price ◽  
The European Union ◽  
Pharmaceutical Pricing ◽  
Price Differences ◽  
The Eu

Pharmaceutical pricing and reimbursement regulations create a dilemma to achieve a single pharmaceutical market in the European Union (EU). Although considerable progress has been made in the past years in harmonization of the pharmaceutical markets, the pricing decisions or systems have continued to be operated on a national basis, which results in price differences across the member states. These price differences create opportunity for parallel trade which, in combination with the EU single market principle calling for the free movement of goods, could lead to reduction in price differences. Among the harmonization efforts by the European Commission, national decisions on pricing and controls, plus parallel trade dilemma, we attempt to analyze the bilateral drug price differences using a sample of countries that represent from strict to relatively less pharmaceutical regulations. Almost all member countries regulate pharmaceutical prices, either directly or indirectly, in the EU, which creates less or more price differences despite market integration. This paper is simply aimed at analyzing price differences in the European pharmaceutical market, employing annual 1994–2003 IMS Health Data from five EU countries (Germany, the United Kingdom, France, Italy and Spain) on prices of molecules used to treat cardiovascular disease. The analysis includes a two step approach. First, we calculate the common use of Laspeyres and Paasche weighted price and quantity indices to make comparisons for both bilaterally matched molecules (considering Spain as the base country) and diffused molecules that are available for five countries. Second, we adopt a hedonic price regression to control observable quality and market characteristics and then re-analyze price differentials. The study concludes that price differences still exist, but are decreasing over time. Even though the results are sensitive to sample and methods used, we found implicit evidence that harmonization efforts by the European Commission may ease reducing price differences in the long run, but it should not be interpreted as moving toward complete elimination of price differences due to complexities in this industry.

Old abuses in new markets? Dealing with excessive pricing by a two-sided platform

2020 ◽  
Author(s):  
Zeynep Ayata
Keyword(s):  
Competition Authority ◽  
Pricing Strategies ◽  
Platform Competition ◽  
New Markets ◽  
Dominant Position ◽  
Traditional Markets ◽  
New Approaches ◽  
Abuse Of Dominant Position ◽  
Competition Enforcement

Abstract Exploitative abuses, especially excessive pricing, have been one of the most debated forms of abuse of dominant position. Unlike exclusionary abuses, they have been prohibited only under certain jurisdictions and on rather rare occasions. In Europe there have been few recent decisions and investigations that have reiterated existing approaches and tests for establishing excessive pricing. The Turkish Competition Authority’s Sahibinden.com decision has come at such a time where the discussion on excessive pricing has been somewhat revived. However, this decision stands out as it is the first one where a competition authority has found prices to be excessive and therefore abusive in the context of a two-sided platform. Competition in platform markets display unique dynamics that may be very different from what may be observed in traditional markets especially in terms of pricing strategies. This article aims to demonstrate, through the Turkish Competition Authority’s recent decision, the difficulties in applying existing tests and criteria on excessive pricing to a two-sided platform. A thorough analysis of this decision demonstrates that competition enforcement in what may be called ‘new’ platform markets necessitates new approaches or adjustments of existing ones.

scholarly journals Effectiveness of Judicial Review in the Polish Competition Law System and the Place for Judicial Deference

2016 ◽  
Vol 9 (14) ◽  
pp. 97-124
Author(s):  
Maciej Bernatt
Keyword(s):  
Decision Making ◽  
Supreme Court ◽  
Judicial Review ◽  
Due Process ◽  
Competition Law ◽  
Market Definition ◽  
Competition Authority ◽  
Relevant Market ◽  
Law System ◽  
The Supreme Court

The article discusses the effectiveness and the intensity of judicial review in the Polish competition law system. First, it studies whether the judicial review offered by the 1st instance Court of Competition and Consumer Protection in Warsaw (SOKiK) is effective in practice. Next, the article analyzes whether Polish courts tend to defer to the findings of the Polish competition authority, UOKiK. Judgments of the Supreme Court concerning relevant market definition serve as case studies. Finally, the article discusses whether proceedings before the Polish competition authority ensure sufficient due process guarantees, the impartiality of decisionmakers, and the overall expert character of UOKiK’s decision-making process. On this basis the article examines whether there are grounds for the reviewing courts to defer to UOKiK’s findings. The article concludes that currently the review undertaken by SOKiK happens to be superficial and thus ineffective. At the same time, the Supreme Court’s review of the determination of the relevant market is not deferential towards UOKiK’s findings. The Supreme Court substitutes its own definition of the relevant market for that of UOKiK and that of the lower courts. However, the article shows that there are no grounds at the moment for arguing for greater judicial deference. Proceedings held before UOKiK, despite recently introduced improvements, still do not offer sufficient due process guarantees or a division between investigatory and decision-making functions. In addition, UOKiK’s expertise is not sufficient for both institutional and practical reasons

scholarly journals Alignment with EU Regulations in the Field of the Competition Policy and System of State Aid in Western Balkan Countries

2021 ◽  
Vol 59 (2) ◽  
pp. 173-191
Author(s):  
Boban Stojanović ◽  
Zorana Kostić ◽  
Vladan Vučić
Keyword(s):  
European Union ◽  
Competition Policy ◽  
Efficient Frontier ◽  
Current Debate ◽  
Competition Authority ◽  
The European Union ◽  
Western Balkans ◽  
Regulatory Frameworks ◽  
Balkan Countries ◽  
Abuse Of Dominant Position

Abstract The underying idea behand the foundation of the European Union is a single, integrated and competitive market. The future of the entire Western Balkans region (Albania, Bosnia and Herzegovina, Kosovo*, Montenegro, North Macedonia and Serbia) lies within the European Union. The main purpose of this paper is to explore the multiplicative effects of the alignment of European Union regulations with the competition policy in Western Balkan countries. In addition, the paper is designed to highlight the specific issues, challenges in this field, and provides an overview of empirical trends. A combination of qualitative and quantitative approach proposes methodological framework which recognizes different economic environments and regulatory frameworks. By comparing selected economic indicators related to competiton authorities (number of staff in the national authorities, annual budget of the national authorities, number of prohibited agreements, abuse of dominant position, notification of concentrations, opinions), the authors give a reliable basis for comparative progress analysis in this filed. Using multi-criteria optimization as a key method, as well as network and input-output display, the obtained results suggest country whose competition authority is efficient frontier. The significance of this research stems from the current debate whether the harmonized competition policy should speed up and facilitate the process of the accession of new member states to the European Union.

scholarly journals Nullity and ineffectiveness of contracts as a consequence of violation of EU competition and public procurement rules

2020 ◽  
pp. 69-83
Author(s):  
Ondrej Blažo
Keyword(s):  
Public Procurement ◽  
Market Competition ◽  
Competition Law ◽  
State Aid ◽  
Merger Control ◽  
Eu Law ◽  
Dominant Position ◽  
Abuse Of Dominant Position ◽  
The Right ◽  
Control Regime

The presented paper will focus on the extent of requirements of EU law for nullity or ineffectiveness of contracts in specific areas linked to functioning internal market: competition law, including agreements restricting competition, abuse of dominant position, merger control and state aid, and rules of public procurement. The scope of EU-law-based nullity is quite limited and only Art. 101(2) TFEU provides expressed nullity of agreements restricting competition. In the case of abuse of dominance, nullity of contract constituting abuse of dominant position can be drawn from the principle of effectiveness of EU law. Validity or nullity of contracts violating suspension clause in merger control regime are assessed in two periods - before decision on merger and after decision of the Commission. State aid regime cannot rely on EU-law-based nullity of contracts that violate EU state aid rules. Finally, public procurement rules appear the most complex in this context since they operate with the "right" of the contracting authority to terminate contract and power of revision authority to declare "ineffectiveness" of illegally awarded contract, and therefore revision of directives is suggested.

Sign in / Sign up

Export Citation Format

Share Document