Parallel Trade of Pharmaceuticals - Competition Law Developments Assimakis Komninos

The Reform of EC and Greek Competition Law, 1-2 June 2007 Page 2 New Era? Safe Harbour for Pharmaceutical Companies? – Art. 81(1) EC  Art. 81(1) EC - No agreement - Unilateral quota schemes Bayer (Adalat) BUT devil lies in the detail (facts)  Art. 81(1) EC - Not an object infringement of Art. 81(1) EC GSK Spain BUT (a) special legal & economic context (b) no naked restriction of exports – freedom to export at the normal price (c) Spanish legislation → no intention to be exported  Art. 81(1) EC - Effect? GSK Spain : Minimal benefits

The Reform of EC and Greek Competition Law, 1-2 June 2007 Page 3 New Era? Safe Harbour for Pharmaceutical Companies? – Art. 81(3) EC Pharmaceutical companies bear burden of proof BUT Commission must take their arguments seriously Undertaking must employ “convincing arguments and evidence” → Commission must “adequately examine those arguments and that evidence”, conduct a “proper examination”, “validly take into account all the factual arguments and the evidence pertinently submitted by an undertaking, and refute certain of those arguments, especially if they are “sufficiently relevant and substantiated to require a response” or if they are “relevant, reliable and credible, having regard to their content”. Glaxo Spain, ¶¶ 235, 236, 263, 303 CFI gives some comfort to pharmaceutical companies

The Reform of EC and Greek Competition Law, 1-2 June 2007 Page 4 New Era? Safe Harbour for Pharmaceutical Companies? – Art. 82 EC Dominance – Market definition? GSK Spain : interesting dicta BUT see (a) HCC Decisions of 2002/2006 (b) Commission Astra Zeneca Decision 2005 No per se or otherwise abuse BUT Syfait and Lelos are about refusals to supply (exceptional circumstances); contrast Astra Zeneca (positive conduct)

The Reform of EC and Greek Competition Law, 1-2 June 2007 Page 5 What to keep from the GSK cases New generation of case law: consumer welfare → ultimate aim of competition law In line with the new Article 81(3) Notice-Guidelines Viewing the older case law through this angle ( Consten & Grundig ) Market integration → not an aim in itself but usually an irrebuttable proxy of consumer welfare That presumption may be disproved in cases of very particular legal and economic context (pharma) Object – Effect (Article 81 EC) Even object infringements can be saved through Article 81(3) EC Object should not be seen as set in stone → in reality, an empirical presumption that certain conduct usually produces anti-competitive harm

The Reform of EC and Greek Competition Law, 1-2 June 2007 Page 6 What to keep from the GSK cases Burden and standard of proof clarifications Article 81(3) EC Undertaking must employ “convincing arguments and evidence” → Commission must “adequately examine those arguments and that evidence”, conduct a “proper examination”, “validly take into account all the factual arguments and the evidence pertinently submitted by an undertaking, and refute certain of those arguments, especially if they are “sufficiently relevant and substantiated to require a response” or if they are “relevant, reliable and credible, having regard to their content”. Glaxo Spain, ¶¶ 235, 236, 263, 303 Procedural curiosity Must the Commission take an “exemption decision” in this case (transitional problem)