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AFCA applies for declaratory judgment in relation to dominant company’s dumping prices for cancer medicine at the Cartel Court

On 14 May 2020 the Austrian Federal Competition Authority (AFCA) filed an application for a declaratory judgment against a global pharmaceutical company in relation to abuse of a dominant position in accordance with Article 102 TFEU and § 5 para. 1 of the Austrian Cartel Act (KartG 2005) after the company sold a cancer medicine at dumping prices.

During the relevant period of time, the company’s share of the market concerned was over 85% and therefore represented a dominant position. The company is suspected of having used dumping prices to ensure that hospitals had no incentive to switch to generic medicines, thus preventing generic drug manufacturers from making a successful market entry.

The presumption of innocence applies to the company concerned until the Cartel Court reaches its final decision.

Pharmaceutical sector prioritised by competition authorities in the European Union

Following the European Commission’s inquiry into the pharmaceutical sector in 2009, the pharmaceutical sector has been a high priority across the EU. European competition authorities work closely together with the Commission to safeguard effective competition on pharmaceutical markets. Since 2009 the authorities have adopted 29 decisions against pharmaceutical companies and imposed fines totalling € 1 billion for breaches of antitrust laws. Generics and biosimilars represent an effective source of price competition on pharmaceutical markets, which is why it is of vital public interest that generic companies have every opportunity to enter the market. The cost savings achieved for the healthcare system in the long run can be redirected, for instance, towards new, innovative medicines.

In January 2019 the European Commission published a report on enforcing EU antitrust and merger rules in the pharmaceutical sector.

The AFCA has been analysing the healthcare market in Austria since 2017. In the course of this sector inquiry, the Authority has already published two reports: one on the pharmacy market in 2018 and another on healthcare services in rural areas in 2019.