This content is from: European Union

AstraZeneca loses appeal at Court of Justice

Pharma companies in Europe should reconsider their antitrust risk following a ruling by the Court of Justice this morning

In a relatively straightforward decision, the Court dismissed AstraZeneca's appeal of a General Court ruling that had in turn largely upheld a finding by the European Commission in 2005.

That finding imposed a fine of €60 million on AstraZeneca (later reduced to €52.5 million by the General Court) for infringing competition rules. The Commission said the company's patent and SPC strategies, designed to limit competition from generic rivals, amounted to an abuse of its dominant position.

The Court of Justice also rejected a cross-appeal by the Commission in relation to the reduced level of fine imposed on AstraZeneca.

For the full background on the case, see Managing IP's briefing.

"The Commission will be delighted with the endorsement to its approach; innovative pharma less so. The pharmaceutical industry is now subject to a set of onerous but not fully clear obligations," commented Marie Manley, head of Bristows' Pharmaceutical Regulatory team.

John Cassels at Field Fisher Waterhouse identified three key lessons from the case:

  • There is a trend towards narrower market definition which means that companies may be wrong when they consider themselves too small to be dominant;
  • First movers with patents face a risk of dominance, even in sectors characterised by innovation; and
  • It appears to impose active obligations on dominant companies, for example to disclose their interpretation of legal provisions upon which they rely when applying for IP rights or undertaking a course of action

Pat Treacy, head of Bristows' competition team, argued that the impact goes beyond the pharma sector. "All companies which may be dominant now have an obligation to conduct themselves transparently when dealing with the public authorities. AstraZeneca has been penalised for making arguments that favoured its position when the issue was legally unclear," she said.

For background on the case, see Managing IP's guide to the case.

The full text of the decision can be seen here.

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