The Commission's Astrazeneca Decision: Delaying Generic Entry Is an Abuse of a Dominant Position
| DOI | 10.1093/jiplp/jpi006 |
| Pages | 7-9 |
| Date | 01 November 2005 |
| Year | 2005 |
| Published By | Oxford University Press |
Patents
&The Commission’s
AstraZeneca decision: delaying
generic entry is an abuse of a
dominant position
Commission Decision: AstraZeneca (see press release
IP/05/737, available at www.europa.eu.net)
The European Commission’s recent AstraZeneca
decision introduces abuse of the patent system as
a novel type of infringement of Article 82 EC.
Legal context
Article 82 EC prohibits any abuse of a dominant posi-
tion by one or more undertakings, where the abuse
has an effect on trade between EC member states.
Facts
Following a six-year investigation, the European
Commission has fined AstraZeneca e60 million
(around £40 million) for abusing a dominant posi-
tion, contrary to Article 82 EC (Commission Decision
of 15 June 2005).
AstraZeneca, which owns the successful drug
Losec, was found to be dominant on the market for
drugs used to treat stomach ulcers (technically
referred to as proton pump inhibitors). The Commis-
sion has identified two abuses of that dominance:
(i) providing misleading information to national
patent offices in applications for supplementary
protection certificates (SPCs), which, the Com-
mission contends, enabled AstraZeneca to delay
generic entry to the valuable proton pump
inhibitor market;
(ii) misusing regulatory procedures by withdraw-
ing marketing authorizations for the capsule
form of Losec: this also inhibited generic entry,
as the withdrawal of a marketing authorization
prevents applications from generic manufacturers
from being assessed under the abridged
procedure. Patent protection for the tablet form
of Losec, for which AstraZeneca maintained a
marketing authorization, was only due to expire
some time after the end of patent protection for
the capsule form.
Analysis
Novel abuses of a dominant position These are
both novel types of abuse and represent the Commis-
sion’s first decision in relation to patent ‘evergreen-
ing’ (the practice of extending the period over which
a patentee of a pharmaceutical product may enjoy
monopoly rights beyond the period of basic patent
protection). As such, it is perhaps surprising that the
Commission has set such a high fine. Although the
Commission is entitled to fine undertakings which
breach the EC competition rules up to 10 per cent
of their annual turnover, it often sets a significantly
lower figure where the infringement is of a novel type.
A number of other factors also contribute to
making this one of the Commission’s more unusual
decisions:
AstraZeneca’s ‘misrepresentations’ in its SPC
applications are said to consist in providing the
wrong date for calculating the duration of the
supplementary protection. This meant that
AstraZeneca gained an additional period of protec-
tion for Losec on top of its legal entitlement.
AstraZeneca should have informed all national
patent authorities of the date of the ‘first author-
ization’ for Losec in the EU. However, at the
time at which AstraZeneca made the SPC applica-
tions, the meaning of ‘first authorization’ was
unclear. National patent offices varied in their
interpretation of the provision, with some taking
the date to refer solely to the first grant of a mar-
keting authorization in the EU/EEA and some
picking the later date on which a price or reim-
bursement level has been agreed with the relevant
national authority, as this is also a precondition
to commercialization. A preliminary reference to
the European Court of Justice (ECJ) was required
to settle this question, with the Court holding
that the grant of the first marketing authorization
was the relevant date (Case C-127/00 Ha
¨ssle AB v
Ratiopharm GmbH).
The Commission’s decision in relation to this
‘abuse’ is therefore both highly specific and
unlikely to be replicated. Moreover, it penalizes
AstraZeneca for misunderstanding a rule which
was far from clear at the time of the infringe-
ment. Although the ECJ’s judgment meant that
AstraZeneca had given the incorrect date to the
Journal of Intellectual Property Law & Practice, 2005, Vol. 1, No. 1 CURRENT INTELLIGENCE 7
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