On December 12, 2018, the General Court of the European Union partially annulled the Commission's decision on the existence of restrictive agreements and an abuse of dominant position on the perindopril market by Laboratoires Servier, and reduced the fine imposed by nearly a third, i.e. by €102.67 million.
The Commission had considered that Servier had concluded
agreements with Matrix, Teva, Niche, Unichem and Lupin intended to
delay the entry into the markets of perindopril generics.
It also considered that Servier had committed an abuse of dominant position developing an exclusionary strategy, notably through agreements concluded with generic manufacturers.
The Court recalled that "pay for delay" agreements can be contrary to competition law. Although amicable settlement agreements regarding patents between competitors are not necessarily illegal, this is not the case when the agreements contain clauses prohibiting patent challenges and product commercialization and grant incentives to refrain from entering the market or challenging the patent. The system of "reverse payment" of the branded prescription medical product company to the generic manufacturer is by definition suspicious in the context of amicable settlement agreements when the payment cannot be justified. This is the case when the payment goes beyond the costs inherent in the amicable settlement agreement and corresponds in fact to compensation for not entering the market.
After recalling that the relevant generic manufacturers could be considered as potential competitors of Servier since they could enter the market sufficiently quickly, the Court invalidated most of the amicable settlement agreements concluded by Servier with other companies in the sector.
However, it annulled the fine inflicted on Servier and Krka, since the Commission had not established the existence of an incentive in exchange for Krka's withdrawal from the market. It also reduced by 30 percent the fine for the Servier-Matrix agreement, as its amount was deemed too high.
Regarding the abuse of dominant position, the Court annulled the Commission's decision for erroneous analysis of the relevant market. It had incorrectly decided that Servier held a dominant position on a product market whose boundaries were to be limited to the perindopril molecule alone, in its branded prescription and generic forms.
However, according to the Court, the Commission wrongly considered that perindopril differentiates itself by its medical use from other molecules of the same therapeutic class, when these molecules are comparable in terms of effectiveness and side effects. Moreover, the Commission underestimated the propensity of patients treated with perindopril to change treatment, and overestimated the inertia of physicians to prescribe other medicinal products to their new patients. Therefore, the Commission did not sufficiently take into account the competitive pressure exercised by these other molecules on perindopril.
The Court therefore concluded to an erroneous definition of the relevant market, limited to the perindopril molecule alone. It then inferred that the Commission had not sufficiently established Servier's dominant position in France, the Netherlands, Poland and the United Kingdom, whether on the perindopril market or the upstream market for the active ingredient technology. Consequently, the Court annulled the €41 million fine imposed on Servier for abuse of dominant position.
The Court thus reminded the Commission that even in the pharmaceutical field where the trend is to use very narrow markets which can be limited to a given molecule (thus necessarily leading to a dominant position of the laboratory marketing this molecule), the Commission is not exempted from conducting a complete analysis of potentially substitutable solutions by the medical use made thereof.
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