French Competition Authority Imposes Fine Of € 15.3 Million On Pharmaceutical Company Schering-Plough For Abusive Limitation Of Generic Entry

Author:Van Bael Bellis
Profession:Van Bael & Bellis

On 19 December 2013, the French Competition Authority (FCA) imposed a fine of € 15.3 million on pharmaceutical company Schering-Plough for defaming a generic drug that competes with its brand name Subutex drug and for granting unjustified price cuts to pharmacies in breach of Article 102 TFEU.

In 1997, Schering-Plough acquired the exclusive marketing rights of Subutex, which is used to treat the dependence of drug addicts, from its manufacturer Reckitt Benckiser. In 2006, the generic pharmaceutical company Arrow brought proceedings before the FCA following difficulties in entering the market, alleging that Schering-Plough had abused its dominant position.

In its decision, the FCA found that Schering-Plough and Reckitt Benckiser carried out a two-prong strategy between mid-February and May 2006 aimed at delaying and discouraging the market entry of generics by questioning the medical equivalence of the generic drugs. First, the pharmaceutical companies conducted a communication campaign aimed at doctors and pharmacists shedding doubts on the efficiency and the safety of the products of generic competitors. Second, the FCA found that Schering-Plough granted pharmacists illegal rebates with no objective justification, the aim of which was to prevent their supply of generics by saturating their stocks. The rates of the rebates also exceeded the maximum legal cap, and the payment conditions were found to be abnormally favorable.

The FCA also found that Schering-Plough took improper...

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