Pharmaceutical companies kept on their toes by the European Commission

The General Court of the European Union has confirmed the decision of the European Commission’s Directorate General for Competition to fine AstraZeneca under EU competition law for using its dominant position to delay the market entry of generic versions of its blockbuster drug Losec (omeprazole), which is used in the treatment of reflux disease.

AstraZeneca was fined €60 million by the Commission in 2005 on the basis that the pharmaceutical company had intentionally abused its dominant position contrary to Article 102 of the Treaty on the Functioning of the European Union.  Specifically, the Commission found that AstraZeneca had made misleading representations to various national patent offices to obtain extended patent protection for Losec through the Supplementary Protection Certificate regime.  The information provided by AstraZeneca did not allow the patent offices to correctly calculate the period of additional patent protection, thereby allowing AstraZeneca to obtain additional exclusivity for Losec and compelling generic companies to commence proceedings to invalidate the Supplementary Protection Certificates.  The Commission also found that AstraZeneca had selectively withdrawn capsule formulations of Losec so that generic companies could not rely on the Losec capsule as a reference product to support their marketing authorisation, thereby making it more onerous for the generic competitors to obtain marketing authorisation.

AstraZeneca unsuccessfully appealed the Commission’s decision to the General Court, which confirmed the Commission’s findings.  However, the Court did find that the Commission had failed to establish that deregistration of the Losec capsule products was capable of preventing parallel imports, and the fine imposed on AstraZeneca was reduced to €52.5 million accordingly.

This case is significant because it is the first time where abuse of regulatory process was held to be an abuse of a dominant position under EU competition law.  However there are still a number of issues surrounding the relationship between competition law, patent law and pharmaceutical regulation left unanswered by the Court. It is still unclear, for example, when a company may properly withdraw a pharmaceutical product’s marketing authorisation.

A copy of the Court’s decision can be accessed here.  The decision has, not surprisingly, been welcomed by the Commission.

About the Author

James Ellsmore
James is a senior associate with King & Wood Mallesons' Intellectual Property team in Sydney. James assists clients to resolve intellectual property disputes, with a particular focus on patents, pharmaceuticals and the life sciences. He has acted for a variety of clients in matters concerning patent infringement and revocation proceedings in the Federal Court of Australia, patent opposition proceedings before the Commissioner of Patents, and matters arising from patent licence and technology agreements. James also has experience in the preparation of commercial, R&D and IP agreements for leading universities, research organisations and pharmaceutical companies. He also advises clients on regulatory issues affecting clients in the industrials, consumer and health sectors.
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