AstraZeneca fine for abuse of dominance largely upheld by the EU General Court

United Kingdom

The EU General Court has mostly upheld the fine imposed by the Commission on AstraZeneca for abuse of dominance in relation to its anti-ulcer medicine Losec/omeprazole. These practices related to use of the patent system to delay generic entry and to the use of marketing authorisation procedures to prevent parallel trade and delay generic entry. The fine was reduced from €60m to €52.5m because the Commission had not established that deregistration of marketing authorisations in Norway and Denmark were capable of preventing parallel imports. The decision is likely to embolden the Commission in its follow up to the sector inquiry into the pharmaceutical industry.

The General Court was considering an appeal against a 2005 decision by the Commission concerning an investigation going back to 1999/2000. The Commission had imposed an aggregate fine of €60m on AstraZeneca for two forms of abuse of dominance.

  • The first related to misleading representations to patent offices in Germany, Belgium, Denmark, Norway, the Netherlands and the UK in order to obtain supplementary protection certificates for Losec that conferred extended patent protection. The Commission found that AstraZeneca had concealed the date on which it had obtained its first marketing authorisation and this enabled AstraZeneca to obtain protection to which it was not entitled.
  • The second related to the deregistration of the Losec capsule marketing authorisations in Denmark, Norway and Sweden in order to delay the marketing of generic medicinal products and to prevent parallel imports of the capsule form of Losec.

In reaching its findings the Commission had considered that AstraZeneca was dominant in the relevant market for proton pump inhibitors (PPIs), a particular form of anti-ulcer medicine.

The General Court substantially upheld the Commission's decision. In particular it found that the Commission was right 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. Nonetheless the aggregate fine was reduced to €52.5m on the basis that the Commission had not established that the deregistration of the marketing authorisations was capable of preventing parallel imports in Denmark and Norway.

The General Court's judgment should be seen in the context of the Commission's sector inquiry into the pharmaceutical sector and especially into the loss of exclusivity strategies used by the innovative pharmaceutical sector see our previous Law-Now on the sector inquiry. The General Court's judgment is likely to embolden the Commission to take stricter action in relation to unilateral conduct by the innovative pharmaceutical sector. The decision supports a narrower product market definition than the one which AstraZeneca had been advocating and this may help the Commission in future abuse of dominance cases. Furthermore, the types of conduct which can constitue an abuse have been expanded and are now confirmed to include the provision of misleading information to patent offices.

AstraZeneca may within two months appeal this decision to the Court of Justice of the EU on matters of law. For a full copy of the General Court's judgment see here.