FRANCE Trends and Developments Contributed by: Liliana Eskenazi and Pauline Lecrenais, Fréget Glaser & Associés
• setting prices below cost (predatory pricing), typi- cally identified where prices are below average variable cost or between average variable cost and long-run average incremental cost as part of a plan to eliminate a competitor; • offering products at abnormally low prices (Article L. 420 5 of the French Commercial Code); • granting loyalty or exclusivity rebates that incentiv- ise hospitals to obtain all or most of their products from the dominant company; • conditioning the purchase of one product on the purchase of another separate product (tying); and • co-ordinating prices, including minimum sales prices, or other commercially sensitive conditions with competitors. When determining their commercial strategy, origina- tor companies must ensure that any price reductions accompanying the loss of exclusivity do not impede the entry of generics or biosimilars and that the under- lying pricing methodology is clearly documented in their internal documentation, objective and defensible from an economic and legal standpoint. No disparaging communication with healthcare professionals Pharmaceutical companies are free to share informa- tion and promote their products to healthcare pro- fessionals (doctors, pharmacists etc), provided they comply with the applicable regulatory framework, in particular the rules on advertising. However, they must ensure that the information com- municated to healthcare professionals cannot be regarded as a disparaging practice intended to hin- der the entry of generic or biosimilar products into the market. Competition authorities indeed adopt a relatively strict stance when an originator company criticises a generic product in its communications with healthcare professionals, given the “influence” it has over them. They have made clear that, even where it has legiti- mate health concerns about the safety or efficacy of competing generic or biosimilar products, it is not for the originator to “alert” healthcare professionals. The responsibility for reporting such risks lies solely with the holder of the marketing authorisation.
The FCA was the first to take up concerns about dis- paragement by originator companies and to treat such practices as a form of abuse within the meaning of Article 102 TFEU (see decisions 13-D-21, 13-D-11, 17-D-25). This enforcement trend has now been ech- oed by the European Commission, which has recent- ly examined similar denigration-type conduct in the Teva Copaxone (AT.40588) and Vifor (AT.40577) cases. Across these cases, competition authorities typically criticise the following features of disparagement prac- tices by dominant originator companies: • targeting healthcare professionals with communi- cations that question the safety, efficacy, quality or regulatory status of authorised generic or biosimilar products, in contradiction with the assessments of competent health authorities; • disseminating incomplete, selective or out-of- context information, or alarmist wording, to “cast a doubt” in the minds of healthcare professionals and thereby discouraging prescription, substitution or uptake of competing products; and • integrating such messaging into a broader exclu- sionary strategy (for example, alongside patent tactics or pricing conduct) with the objective of hindering entry of competitors. Some originator companies have argued that their conduct is justified by the exercise of their freedom of expression protected by Article 10 of the European Convention on Human Rights (ECHR). While this argu- ment is, in principle, admissible, recent case law indi- cates that a specific methodology must be applied to balance competition law and fundamental rights The French Supreme Court ( Cour de cassation ) has very recently provided further clarification in this respect in the Lucentis Avastin case. In short, Novartis, Roche and Genentech were fined more than EUR444 million by the FCA for collectively abusing their dominant position. The FCA considered that they had, first, disseminated disparaging mes- sages that “overstated” the risks associated with the off-label use of Avastin to treat age-related macular degeneration (AMD), compared with Lucentis, which holds a marketing authorisation for that indication, and, second, conveyed alarmist/misleading informa-
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