Anticompetitive Marketing in the Context of Pharmaceutical Switching in Europe

Abstract

The article deals with the intersection between competition law rules on abuse of a dominant position and switching strategies employed by pharmaceutical originator companies. Switching is also known as ever-greening, product hopping or product life cycle strategies. It is one of the most topical issues in the patent-antitrust intersection today and consists in launching a slightly modified, second generation pharmaceutical, 1-2 years before the patent exclusivity expires for a first generation product. In this window originators try to migrate patients to a reformulated product. If successful, this will shield the originator from the effects of generic substitution for the first generation product. In the AstraZeneca-case the EU General Court held that a selective redrawal of marketing authorizations for a first generation product was an abuse of a dominant position under article 102 TFEU. This article focuses on other components in a switching strategy, especially the timing and content of marketing efforts by an originator company. Marketing is pro-competitive in almost all cases, but due to the special regulatory context in the pharmaceutical industry, marketing by an originator company can be used in an excluding fashion in the pharmaceutical industry. The conclusion is reached that casting the quality or price of the originator’s first generation product in a bad light, in comparison with the second generation product during exclusivity for the first generation product, may be an abuse by a dominant firm falling foul of article 102 TFEU. It is in effect equivalent to negative comparative advertising messages concerning a competitor’s soon to be launched product.