Reports and Studies
Report on Competition enforcement in the pharmaceutical sector (2009-2017)
The Commission’s main enforcement actions in antitrust and mergers in the pharmaceutical sector are described in its Report on competition enforcement in the pharmaceutical sector 2009-2017 (available in DE/EN/FR and all other EU languages). The Report was drawn up in close co-operation with the national competition authorities of the EU Member States, which, together with the Commission, make up the European Competition Network (ECN). It explains how competition authorities in the EU are working together and how their enforcement actions contribute to affordable and innovative medicines.
The Report covers the period 2009-2017. It describes how intervening against anti-competitive practices by companies and preventing harmful mergers complements the efforts by other stakeholders (e.g. in regulation) to improve access to affordable and innovative medicines for patients in Europe.
The Report provides:
- an overview of competition law enforcement by the Commission and the national competition authorities in the pharmaceutical sector (Chapter 2);
- a description of key characteristics of the sector that shape the competition assessment (Chapter 3); and
- an illustration, including through practical examples, of how competition law enforcement contributes to more competitive prices of medicines (Chapter 4) and to innovation and choice in medicines and treatments (Chapter 5).
- Report in e-Brochure format
- List of cases referred to in the Report
- List of monitoring and advocacy actions referred to in the Report
- Press Release (28.01.2019)
Study on the impact of mergers and acquisitions on innovation in the pharmaceutical sector (21.12.2017)
Cooperation with national competition authorities
The Commission cooperates closely with national competition authorities (NCAs) through the European Competition Network (ECN). This cooperation includes regular discussions between colleagues working on pharmaceuticals, medical devices and health services.
Cooperation with the ECN during the Coronavirus Pandemic
Joint statement by the European Competition Network (ECN) on the application of competition law during the Coronavirus crisis.
…it is of utmost importance to ensure that products considered essential to protect the health of consumers in the current situation (e.g. face masks and sanitising gel) remain available at competitive prices. The ECN will therefore not hesitate to take action against companies taking advantage of the current situation by cartelising or abusing their dominant
The life cycle of pharmaceutical products
The focus of competition law scrutiny, whether in merger control or in antitrust investigations, will vary depending on the stage of a product’s life cycle.
The life cycle of any new medicine begins with a new chemical compound, which is usually discovered through basic research conducted by so-called “originator manufacturers” or independent research facilities (universities, specialised laboratories) that are often supported by public funding. Once the basic research is completed, the pharmaceutical product containing the chemical compound is tested to verify if it would be safe and effective.
Once studies have shown that a new medicine is safe and effective, the originator company applies for a marketing authorisation to the competent regulatory agency. This could be either the European Medicines Agency (EMA) or a national authority.
The development cycles for innovative drugs are usually risky and lengthy, and entail high development costs. Recent estimates suggest that the costs of bringing a medicine from the lab to the market are between EUR 0.5 billion and EUR 2.2 billion (converted from USD) - see the Study on the economic impact of supplementary protection certificates, pharmaceutical incentives and rewards in Europe, May 2018 by Copenhagen Economics. Moreover, only a small minority of candidate molecules survive the development stage and finally make it to the market.
Pharmaceutical (originator) companies may enjoy an exclusivity on the market through patent protection for their products in order to recoup such research and development costs. Once the awarded patent has expired, producers of copy (so-called “generic”) products can enter the market. Such "generic entry” has typically the effect of bolstering competition and of driving prices for competing pharmaceuticals down.
Certain practices of pharmaceutical companies to protect their exclusivity may, under certain circumstances, lead to violations of EU competition law. These include, for example, patent clusters, patent thickets and patent settlements, which aim at prolonging market-exclusivity, and other anti-competitive strategies that result in higher prices. These types of behaviour entail not only the risk of price increases, but can also take away the incentive to innovate. See Sector Inquiry.
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 in 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 its market authorisations. AstraZeneca was fined EUR 60 million in 2005.