Pay (a fine) for delay

The (extended) pre-Christmas season is always a busy time, leaving little room for writing a new blog (and I’ve also been working on the sequel to my Christmas story for weeks). However, I did not want to miss the chance to briefly summarize the key points of the Teva decision by the Commission – after all, there is always something new to learn! And I am going to use this blog to report about the outcome of a case I wrote about more than two years ago.

What is the case about

At the end of October, the European Commission imposed a EUR 462.6 million fine on Teva for abusing its dominant position to delay competition for Copaxone, its blockbuster multiple sclerosis treatment. The Commission concluded that Teva (i) artificially prolonged Copaxone’s patent protection and (ii) deliberately disseminated misleading information about a rival product to obstruct its market entry and adoption. The Commission opened the investigation in March 2021, following unannounced inspections already in October 2019 (as mentioned in our post here). So it took the Commission almost exactly five years to conclude the case.  

Not that new – misuse of patents

The misuse of patents to delay the market entry of competitors is not new. In the case at hand, according to the Commission, Teva used the European Patent Office (EPO) rules to extend Copaxone’s protection through staggered divisional patents, focusing on the manufacturing process and dosing regimen. Rivals challenged these patents, but during the review of the EPO Teva enforced them by securing interim injunctions. To avoid formal invalidation that could jeopardize other patents, Teva strategically withdrew the challenged patents when revocation seemed imminent, forcing competitors into repeated legal battles, leaving them uncertain about the scope of patent protection for Copaxone and thus delayed their market entry.  

Bear false witness against thy neighbour competitor

According to the Commission, Teva conducted a systematic disparagement campaign against a competing medicine for multiple sclerosis by spreading misleading claims about its safety, efficacy, and equivalence to Copaxone, despite approval and confirmation by health authorities. Targeting key stakeholders, such as doctors and national pricing and reimbursement decision-makers, Teva aimed to delay or block the rival product’s entry in several Member States.

What the Commission had to say

The Commission found that both actions led to a single infringement with durations varying by Member States. According to the Commission, the list price dropped by up to 80% once rival medicines entered the market. According to (still) Commission Executive-Vice President Vestager, the Commission sends “a clear message to dominant pharmaceutical companies that we will not tolerate the use of disparagement campaigns to foreclose competing medicines”.

Disparagement campaigns – wasn’t there something?

Attentive readers (and other antitrust nerds) will remember that we wrote about a similar case in 2022. The Commission investigated whether Vifor Pharma abused its potential dominant position on the market for intravenous iron treatment by spreading misleading information regarding the safety of a competing product, in particular by targeting health care professionals.

This case was also resolved this year (also see this post), but Vifor Pharma fared better than Teva. Vifor agreed to launch a comprehensive communication campaign aimed at nearly 200,000 European healthcare professionals to address and reverse the effects of its disparagement campaign. The company also committed to only discussing Monofer’s safety based on its label or valid clinical trials. Furthermore, Vifor implemented several measures to ensure compliance, including internal reviews of all external promotional and medical communications, staff training, and a compliance certification system. Finally, Vifor reached a commercial settlement to compensate the competitor targeted by the disparagement campaign for any potential harm caused by its actions.

Key takeaway

Regardless of whether and in which God one believes, the commandment “thou shalt not bear false witness against thy neighbor” holds true and applies to companies as well. Failure to adhere to this principle will likely result in punishment, not necessarily from a divine force, but from the Commission.  

Photo by Loren Cutler on Unsplash