EU publishes summary of recent competition enforcement in the pharmaceutical sector and promises to continue policy of proactive enforcement

Key takeaways are that:

• EU and Member State authorities imposed multiple material antitrust fines from 2018-2022, totalling approx. EUR780 million.
• The EC is more than three times as likely to take action against a pharmaceutical merger than it is on average across all sectors.
• European regulators will continue to treat enforcement in this industry as a high priority.

Key statistics from the EU report

The report looks at behavioral antitrust and merger control enforcement in the EU between 2018 and 2022 (including UK pre-Brexit enforcement).

The cases examined in the report confirm that:

• Authorities across the EU have long been active in behavioral antitrust enforcement in the pharmaceutical sector and imposed material antitrust fines in 2018-2022. These totalled approx. EUR780m across the EU and Member States authorities. 
• The EC is more than three times as likely to take action against a pharmaceutical merger than it is on average across all sectors. In 2018-2022, the EC ‘intervened in’ (ie either prohibited or cleared subject to remedies) 17% of pharmaceutical mergers, compared with an intervention rate of 5% across all sectors. 

The very high amount of overall antitrust fines is mostly attributable to a EUR444m penalty imposed by the French Competition Authority in 2020 which was later overturned by the Paris Court of Appeal in 2023 (although the authority is currently appealing this to the Court of Cassation). 

The EC itself issued EUR60.5m of fines, with penalties also issued by authorities in Spain, Belgium, Netherlands, Romania, Lithuania, Greece, Italy, Portugal and the UK.

The EU report dismisses concerns that competition authorities should be enforcing even more vigorously

The report responds to concerns expressed by the EU Council and Parliament in 2016 and 2017 that European patients may not be able to access affordable and innovative essential medicines because of “a combination of very high and unsustainable price levels, active business strategies by pharmaceutical companies, and the limited bargaining power of national governments against those pharmaceutical companies”. 

It is the second report of its kind (the previous report in 2019 covered the period 2009-2017). The EC’s position in this report remains that competition enforcement is playing the role that it should in keeping prices competitive and preserving innovation. 

To that end, the EC highlights how enforcement has promoted access to affordable medicines including through:

• action against abuses of dominance that prevent or delay market entry of generics and biosimilars (also beyond typical “pay-for-delay” measures, eg via patent filing practices and disparagement strategies); and
• other enforcement actions (eg against excessive pricing practices) and merger control interventions that, in the EC’s view, preserved price competition. 

The EC also emphasises that, in its view, merger control rules and antitrust enforcement cases have prevented innovation being held back by industry consolidation or through abuses of dominance. 

Pharmaceutical companies can expect this sector to remain a high priority

The report ends with an unequivocal commitment by the EU and Member State authorities to continue to monitor and be proactive in investigating possible competition issues.

The EC also mentions that other legislative and regulatory action may also have an impact on price and innovation levels including, in particular, on-going reforms of EU pharmaceutical legislation and strategy. 

We expect other regulators to remain active in the sector. This will include the UK Competition and Markets Authority which, shortly after the EC’s report, launched an investigation into whether a pharmaceutical company may have restricted competition by making misleading claims to healthcare professionals about the safety and effectiveness of a rival’s product.