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Sector inquiry

Pharmaceuticals & Health Services



The Commission has in recent years investigated attempts by originator companies to delay or hamper the introduction of generic medicines or of new, innovative drugs that may compete with their products already on the market. A sector inquiry, launched in 2008, aimed at uncovering the causes of the apparent low levels of competition in this sector. The European Commission is committed to enforce and promote the competition rules because fair competition on the merits results in less pressure on national health budgets and less expensive healthcare for EU citizens.


Pharmaceutical companies enjoy patent protection for their products in order to recoup R&D costs. Once the patent has expired, producers of generic products can enter the market.

Some practices of pharmaceutical companies may, in certain circumstances, lead to violations of EU competition law. These include patent clusters, patent thickets, patent settlements, which aim to prolong market-exclusivity and other anti-competitive strategies that result in high prices. These types of behaviour can also take away the incentive to innovate, as the pressure of competition from generic products encourages all pharmaceutical companies to make available the best possible products for EU citizens.

In the AstraZeneca case, the Commission investigated AstraZeneca's suspected abuse of the patent system and the system for authorisation of medicines, with the aim of delaying competition to a blockbuster drug from generic and parallel imported pharmaceuticals. The abuse of Astra Zeneca consisted of providing misleading information to a number of EEA patent offices in order to obtain supplementary protection certificates (SPCs) and misusing rules and procedures applied by national medicines agencies by selectively deregistering the market authorisations. AstraZeneca was fined EUR 60 million in 2005.

In 2010 the General Court largely upheld the decision, lowering the fine from 60 to 52.5 million euros. The appeal against that decision by AstraZeneca was rejected by the European Court of Justice in 2012.

Sector inquiry and its results

In 2008 the Commission carried out a sector inquiry to investigate the reasons for the apparent lack of competition in the market for human medicines in Europe. Since the sector inquiry closed, the Commission has been focusing on implementing the policy recommendations that came out of it and on enforcement action.

The Commission proposed an update of the Transparency Directive which governs the transparency of pricing and reimbursement measures in March 2012. The Commission proposed faster access to medicines for patients by streamlining and reducing the duration of national decisions on pricing and reimbursement for medicines. Because of no foreseeable agreement amongst Member States, the Commission proposed in its workplan 2015 no longer to pursue the update of the Directive.

The Commission advocated and proposed the adoption of the European patent and a specialised patent litigation system in Europe. The two regulations and the Agreement on the Unified Patent Court ("patent package") entered into force in January 2010. In February 2013 the Agreement on the Unified Patent Court was signed by 25 Member States. The unified patent - or "European patent with unitary effect" - is a European patent, granted by the European Patent Office under the rules and procedures of the European Patent Convention, to which, upon request of the patent proprietor, unitary effect is given for the territory of the 25 Member States participating in the unitary patent scheme. The unitary patent will co-exist with national patents and with classical European patents

Since the sector enquiry, a large body of legislation around the principle of progressive harmonisation of requirements was revised and implemented. Today, medicinal products in the EEA may be either authorised at EU level by the European Commission or at national level by Member States’ competent authorities. More information on this can be found with DG Health and Food Safety of the European Commission.

The sector inquiry also had effects at national level, with some Member States taking up recommendations on improving market access for generic medicines.

Patent settlements

Patent settlement agreements, as examined in the context of the sector inquiry, are commercial agreements to settle patent-related disputes between originator and generic companies. As pointed out in the Final Report of the sector inquiry, some patent settlements in the pharmaceutical sector may prove to be problematic from a competition law perspective. Of particular interest are settlements that may restrict generic market entry in exchange for benefits transferred from the originator to the generic company (sometimes referred to as "pay-for-delay" deals). Such agreements result in delayed market entry of cheaper generic medicine, to the detriment of patients and taxpayers financing the health system.

Monitoring Patent Settlements

Since the sector inquiry the Commission has carried out annual patent settlement monitoring exercises. The main purpose of the monitoring is to better understand the use and evolution of patent settlements in the EU (and, if possible, to identify those that potentially unduly delay market entry of generic medicines to the detriment of EU consumers). As with the former reports, the current report shows that the Commission's ongoing enforcement action and monitoring activity have not hindered companies from concluding settlements in general. At the same time, the relatively low level of potentially problematic settlements is a good sign from a competition policy perspective.

Patent Settlement Cases

The Commission has adopted a number of individual follow-up decisions against pharmaceutical companies including fining Servier €330 million and several producers of generic medicines €97 million in 2014 for delaying market entry of generic high blood pressure medicine perindopril , fining Johnson & Johnson and Novartis €16 million in 2013 for delaying market entry of generic pain-killer fentanyl and fining Lundbeck €93.8 million and several producers of generic medicines €52.2 million in 2013 for delaying market entry of generic antidepressant citalopram.

The Commission found that in all three cases the agreements have caused consumer harm by delaying generic entry and maintaining unnecessarily high prices. The Lundbeck and Servier cases are under appeal.

Health Services and Medical Devices

The organisation of their health care sectors is primarily the responsibility of Member States. However, activities that involve offering goods or services on the market, including the provision of health care goods or services, are generally subject to EU competition rules. The first antitrust decision in the health services market was adopted by the Commission in 2010. It imposed a fine of EUR 5 million on the Ordre National des Pharmaciens for imposing minimum prices on the French market for clinical laboratory tests, and hindering the development of laboratory groups.