European Union: Advocate General Would Reject Astrazeneca's Appeal Against Abuse Of Dominance

Last Updated: 23 May 2012
Article by David Marks, Nick Beckett and John Markham

On 15 May 2012, Advocate General Mazak of the European Court (ECJ) delivered his opinion on AstraZeneca's practices involving anti-ulcer product Losec/omeprazole.

AG Mazak's opinion recommends dismissing the appeal against findings that AstraZeneca abused the patent system and the procedures for marketing pharmaceutical products in order to prevent or delay the arrival of competing generic medicinal products and to impede parallel trade, in breach of the prohibition on abuse of a dominant position (Article 102 TFEU).

Dismissing the appeals would mean upholding the July 2010 findings of the General Court (see our earlier law-now). Such opinions are not binding on the ECJ itself so it remains to be seen whether the ECJ will follow AG Mazak.

The case concerns the anti-ulcer drug Losec/omeprazole. AstraZeneca was found to have been dominant in the market for proton pump inhibitors (PPIs), a particular form of anti-ulcer medicine. The Commission fined AstraZeneca for these infringements in 2005 and the fine was lowered from €60m to €52.5m on appeal to the General Court.

AG Mazak took the view that it was correct to have regard to the narrower PPI market rather than to a wider anti-ulcer market comprising other forms of medicinal product in addition to PPIs, such as H2 blockers, even though sales of PPIs were increasing at the expense of H2 blockers. AG Mazak stated that "the mere fact that there were significant sales of H2 blockers at the end of the relevant period does not mean ... that H2 blockers and PPIs were part of the same relevant product market. It is possible for a 'new' and 'old' product to coexist in two separate markets." AG Mazak also rejected arguments raised regarding doctors' inertia in prescribing in prescribing PPIs rather than H2 blockers and regarding the overall cost of treatment.

As regards abuse of dominance, AG Mazak rejected arguments that deliberate fraud or deceit should be a requirement for a finding of abuse in relation to misleading patent offices about marketing dates relevant for the issue of supplementary protection certificates (SPCs). AG Mazak's view was that in abuse of dominance cases, when assessing whether a particular course of behaviour is misleading, it is not necessary to assess a party's alleged subjective beliefs on an interpretation of law, but rather to examine its actual conduct. He continued that "the appellants' submission regarding a requirement of proof that AZ knew that it was not entitled to an SPC [for Losec] and was thus acting fraudulently, in my view, radically departs from the principle that abuse of dominance is an objective concept."

AG Mazak's opinion noted that applications for SPCs "had the potential to detrimentally affect or hinder competition due to the exclusionary effect of SPCs."

As regards the withdrawal of marketing authorisations thereby impeding parallel trade and generics, AG Mazak's view was that compliance with other regulatory requirements "in no way causes that conduct to escape the prohibition laid down in Article 102 TFEU ... the illegality of abusive conduct under Article 102 TFEU is unrelated to the compliance or non-compliance of that conduct with other legal regimes."

The case relates to conduct in the late 1990s, a Commission fine in 2005, a General Court decision in 2010 and perhaps a final ECJ ruling by the end of 2012. The pharmaceutical industry is following this case closely for the ECJ's approach to market definition as well for the aspects around intellectual property rights and loss of exclusivity strategies.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 16/05/2012.

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