EC opens up investigation against Teva for alleged abuse of dominance in the market

EC opens up investigation against Teva for alleged abuse of dominance

The EC will investigate the potential abuses relating to patent procedures and exclusionary disparagement of competing products in the pharmaceutical industry

A formal investigation has been ordered against the Pharmaceutical Company Teva by the European Commission (EC). The order comes after Teva was accused of delaying the market entry and uptake of medicines that compete with its blockbuster multiple sclerosis drugs Copaxone. The investigation has been ordered to check whether the company has abused its dominant position breaching European Union antitrust rules.

Speaking on the issue, Margrethe Vestager, Executive Vice President, in-charge of Competition Policy said, "Multiple sclerosis is a chronic illness affecting the daily lives of more than half a million Europeans requiring life-long treatment. Despite great efforts of the scientific community, humanity has not yet found a treatment for this disease, which remains incurable. It is therefore paramount to preserve healthy competition in the market for available drugs that aim at slowing down the disease and improving patients' quality of life. It is also important that companies compete to innovate so that new and affordable treatments can emerge. Today, we have decided to launch an in-depth investigation into whether Teva may have abusively blocked or delayed the market entry of competitors to its blockbuster drug Copaxone, to the detriment of patients and health systems."

The drug, Copaxone, manufactured by Teva, has been widely used for the treatment of relapsing forms of multiple sclerosis containing the active pharmaceutical ingredient glatiramer acetate. This glatiramer acetate expired in 2015. The investigation will touch whether Teva has artificially extended the market exclusivity of Copaxone by strategically filing and withdrawing divisional patents, repeatedly delaying the entry of its generic competitor who was obliged to file a new legal challenge each time. The divisional patent may cover the overlapping invention and allow the patent barriers to be raised making it difficult for the generic competitor to enter the market.

The investigation will also touch upon the fact that whether Teva has pursued the communication campaign directed towards healthcare institutions and professionals creating a false perception of health risk. These were used to hinder the use of competing for glatiramer acetate.

The EC will formally investigate the potential abuses relating to patent procedures and exclusionary disparagement of competing products in the pharmaceutical industry, carrying in-depth investigation as a matter of priority. If the Commission is successful, Teva will infringe Article 102 of the Treaty on the Functioning of the European Union (TFEU) and Article 54 of the European Economic Area (EEA) Agreement.

Article 11(6) of the Antitrust Regulation provides that the opening of proceedings by the Commission relieves the competition authorities of the Member States of their competence to also apply EU competition rules to the practices concerned. Article 16(1) further provides that national courts must avoid adopting decisions that would conflict with a decision contemplated by the Commission in proceedings it has initiated.

There is no such deadline being mentioned by the Commission for ending the investigation since this duration will depend upon the factors such as the complexity of the case, the extent to which the companies concerned cooperate with the Commission, and the exercise of the rights of defense.