AstraZeneca’s defeat opens door to more challenges
pharmafile | June 24, 2005 | News story | Sales and Marketing |Â Â Â
Pharmaceutical companies found guilty of violating European antitrust laws can expect steeper fines than AstraZeneca, according to a leading law firm.
AstraZeneca has been fined E60 million by the European Commission after it judged the company illegally tried to extend the patent on its ulcer drug Losec.
The company was found guilty of abusing its dominant market position by using the patent and regulatory systems to block generic versions of the drug from coming to the market.
Howard Cartlidge, partner and head of competition group at Olswang law firm, said the landmark ruling against AstraZeneca could spell bad news for pharma companies as it indicated the Commission's intent on bringing future offenders to book.
"It opens the door to complaints and lawsuits by generic companies and parallel importers using European law to support their efforts to compete with pharma companies who are seeking to prolong a product's lifecycle after patent expiry," remarked Cartlidge.
He said the ruling was particularly significant for pharma companies which, like AstraZeneca with its ulcer treatment Losec, had a product with dominant share (over 50%) of the market.
"I think the Commission is putting down a marker with this case and will come down a lot stronger on future offenders," he said.
The case against AstraZeneca is the first time a pharmaceutical company has been found guilty of abusing its dominant market position in Europe. The novelty of the violation, according to the Commission, resulted in a reduction of the fine.
The ruling has been applied in other sectors and in the US against GlaxoSmithKline. Swedish packaging company Tetra Pak incurred one of the steepest fines for repeated offences of a similar nature.
The law hasn't been used before in Europe as pharma markets are generally considered fragmented and hence few pharmaceutical companies are deemed to have a dominant position.
AstraZeneca's most promising case for overturning the ruling is in claiming it did not mislead Patent Offices or Courts in obtaining supplementary protection certificates (SPCs).
But this could be difficult to substantiate and will be dependent on the company proving that the Commission was wrong in its conclusions.
The company could be on stronger ground on the second ruling – that it withdrew marketing authorisations for Losec capsules in order to promote its tablet formulation. AstraZeneca has argued this was part of a legitimate overall strategy to promote what it considered to be a better product.
A decision on this issue is likely to be resolved by an appeal to the European Court of First Instance, but this could take years rather than months to resolve.
The ruling against AstraZeneca is likely to serve as a blueprint for future cases and could signal a tougher stance from the Commission.
The Commission is dealing with two other cases against pharma companies which could result in substantial fines.
