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CCPC Confirms that Irish Pharmaceutical Sector Under Review Following Pricing Concerns

AUTHOR(S): Helen Kelly, Kate McKenna
PRACTICE AREA GROUP: EU, Competition and Regulatory
DATE: 19.06.2018

There have been reports in PaRR today that a spokesperson for the Competition and Consumer Protection Commission (“CCPC”) in Ireland has confirmed that the pharmaceutical sector in Ireland is being monitored following concerns raised regarding pricing issues.  The CCPC also confirmed that this monitoring could give rise to potential enforcement action.  PARR also reported that chiefs of competition authorities across Europe met earlier this year to discuss excessive pricing in the pharmaceutical sector.  The CCPC has previously coordinated with authorities across Europe in taking enforcement action, for example in 2015 it coordinated with France, Italy and Sweden in a hotel booking investigation involving Booking.com.

These reports follow recent developments in cases brought by the Competition and Markets Authority (“CMA”) in the UK alleging excessive pricing in the sector.  Earlier in June, the CMA lost a landmark case before the Competition Appeals Tribunal (“CAT”), which overturned the CMA’s decision to fine two global drug companies, Pfizer and Flynn, almost £90 million for alleged excessive pricing in the supply of an anti-epilepsy drug, phenytoin sodium.  The CMA has yet to decide whether it will appeal this judgment.  The CMA currently has at least four other open investigations in the sector, including into alleged anti-competitive behaviour and abuse of dominance.

Excessive pricing by dominant undertakings is unlawful under Irish and EU Competition law although in practice the complexities faced by regulators in establishing a price to be excessive have cooled enforcement action.  However, there has been growing political pressure on the pharmaceutical sector in Ireland, including as a result of recent media reports that a number of cancer drugs approved for use by the European Medicines Agency have yet to be approved in Ireland, reportedly largely on the basis of cost grounds.  Companies found to have engaged in abusive conduct in Ireland face maximum fines of €5 million or 10 per cent of turnover, whichever is greater.

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