Antitrust enforcement against misuse patent procedures and disparaging

Enforcement of antitrust infringements in the pharmaceutical industry has been one of the priorities of the European Commission (“Commission”) for many years, as well of several national competition authorities. Continued antitrust enforcement in this industry is still ongoing. The Commission announced last week that it has issued a Statement of Objections against pharmaceutical company Teva for allegedly misusing patent procedures and using a disparaging strategy – spreading misleading information – to delay the market entry of competing generic medicine, in violation of Article 102 TFEU. Furthermore, in June 2022 the Commission opened an antitrust investigation to assess whether Vifo Pharma violated Article 102 TFEU by disparaging its closest competitor. It seems that disparaging is an important topic of investigations by the Commission, next to abuse of patent procedures.

Abuse of dominance

It is clear that patent protection is of great importance for innovation in the pharmaceutical sector. Pharmaceutical companies can therefore take various measures to protect their products from competition. Many measures will be lawful, but some measures may be contrary to competition law. According to the Commission Teva has taken unlawful measures to hinder the market entry of a competing product of its best selling medicine Copaxone that is widely used for the treatment of relapsing forms of multiple sclerosis. In last week’s announcement the Commission indicated that it has informed Teva of its preliminary findings that Teva has breached EU antitrust rules. According to the Commission, Teva has, since 2015, abused its dominant position by engaging in behavior linked to the expiry of the basic patent covering glatiramer acetate which is the active ingredient in Copaxone. The Commission’s accusations concern the following:

• Misuse of patent procedures
  Following the patent expiry, Teva allegedly artificially extended the market exclusivity of Copaxone by strategically filing and withdrawing secondary patents, repeatedly delaying entry of its generic competitor who was obliged to file a new legal challenge each time. The Commission refers to this as the “divisional game”, because the strategy implies filing so-called “divisional patents” which are patents derived from an earlier secondary patent and whose subject matter is already contained in the earlier patent. This artificially prolongs legal uncertainty to the benefit of the patent holder, and can effectively block or delay entry of generic or generic-like medicine.

• Disparaging
  According to the Commission Teva has pursued a disparagement campaign to unduly hinder the use of competing glatiramer acetate products. Teva is accused of targeting healthcare professionals and casting doubts about the safety and efficacy of a competing glatiramer acetate medicine and its therapeutic equivalence with Copaxone.

This is the Commission's first investigation in a long time into potential abuse relating to an alleged misuse of patent procedures and the first concerning disparaging. While the specific conduct relating to patent procedures that lies at the heart of the Teva case in connection to Article 102 TFEU has not previously been assessed under Article 102 TFEU, other conduct relating to the use of patent procedures has been found abusive in the AstraZeneca case. The Commission found that AstraZeneca had abused its dominant position by blocking or delaying market asses for generic versions of Losec. In that case the Court of Justice confirmed a decision of the Commission concerning two abusive practices: misleading patent offices for the purposes of improperly obtaining exclusive rights in order to keep for as long as possible its monopoly and by deregistration the market authorisation of Losec capsules to hinder the introduction of generic products and parallel imports. With regard to the latter behaviour, the Court emphasised that the fact that AstraZeneca was entitled to request deregistration in no way causes that conduct to escape the prohibition laid down in Article 102 TFEU EC as the illegality of abusive conduct is unrelated to its compliance or non-compliance with other legislation.

Disparaging under further scrutiny

The Vifo Pharma case, is the second case of the Commission in which disparaging is the central topic. The Commission announced a few months ago that it has indications that since many years, Vifor Pharma may have been disparaging Monofer by spreading misleading information regarding its safety. Monofer, an iron treatment medicine, is marketed by Pharmacosmos, which according to the Commission is Vifor Pharma’s closest – and potentially only – competitor in Europe on the market for intravenous iron treatment. The Commission is concerned that Vifor Pharma pursued a misleading communication campaign, primarily targeting healthcare professionals, which may have unduly hindered Monofer's uptake in the market.

Disparaging tactics have been under antitrust scrutiny in several national cases, mainly concerning antitrust enforcement by the French competition authority. This competition authority imposed fines on pharmaceutical companies in three separate cases, all pertaining to disparaging practices of generic versions of originator medicine allegedly aimed at hindering or delaying the entry to the market of generics. In all cases the pharmaceutical companies marketing the originator medicine were accused of misleading health care professionals, such as doctors and pharmacists, about the risks relating to safety of prescribing competing generics.

In its 2018 Hoffman La-Roche judgment the Court of Justice shed light on disparaging in relation to Article 101 TFEU. In this case, the Italian competition authority had fined two pharmaceutical companies on the ground that they had concluded an agreement contrary to Article 101 TFEU, designed to achieve an artificial differentiation between Avastin – authorised for the treatment of tumorous diseases – and Lucentis – authorised for the treatment of eye diseases – by manipulating the perception of the risks of using Avastin, used as an off-label product for eye disease. The Court held that an agreement between two companies marketing two competing medicinal products, which consists in the dissemination, in a context of scientific uncertainty, to the EMA, healthcare professionals and the general public of misleading information relating to adverse reactions resulting from the off-label use of one of those products with a view to reducing the competitive pressure it exerts on the other product, constitutes a restriction of competition.

Shift to abuse cases

Previously the Commission imposed several fines on pharmaceutical companies for inter alia pay-for-delay agreements in violation of Article 101 TFEU and – as mentioned – misuse of the patent framework resulting in an abuse of dominance. The Commission’s continued interest in the pharmaceutical industry seems to focus more and more on abuse of dominance. Investigations into misuse of patent procedures as is the case in the Teva case are however not revolutionary given the AstraZeneca case. For pharmaceutical companies, these developments mean that they should continue to pay attention to their behaviour in the market, not only with regard to high prices that in some cases could be considered abusive, but also in relation to behaviour that may appear lawful, namely in line with patent procedures, and public statements or other communication in relation to products of competitors.