When Competition Law Analysis Goes Wrong – The Italian Pfizer/Pharmacia Case

17 Pages Posted: 11 Feb 2014  

Damien Geradin

Tilburg Law & Economics Center (TILEC); University College London - Faculty of Laws

Date Written: February 10, 2014

Abstract

The January 2012 decision of the Italian Competition Authority (“ICA”) to fine Pfizer and Pharmacia €10.6 million is an illustration of the more aggressive trend taken by competition authorities in the pharmaceutical sector. In this case, the ICA alleges that the parties sought to delay entry of generic suppliers by implementing a “complex strategy” to “artificially” extend its patent rights, hence committing an abuse of a dominant position in breach of Article 102 of the Treaty on the Functioning of the European Union (“TFEU”).

The purpose of this paper is to show that the decision of the ICA is fundamentally flawed as it fails to provide any evidence that the parties’ patent filings were misleading or “artificial” under the applicable patent laws. Instead, the decision is based solely on the ICA’s unsubstantiated view that Pfizer’s conduct did not constitute “competition on the merits”, a vague standard unable to satisfy the basic requirements of the rule of law and legal certainty. Following this unreasoned decision, pharmaceutical companies and their counsel face an impossible task of assessing which IP strategies are compatible with competition law. This legal uncertainty, combined with the risk of large fines, means that pharmaceutical firms may no longer dare to take steps to obtain patent protection to which they are legally entitled, and more importantly, may have less incentive to invest in future research and development.

Keywords: patent settlements, pay for delay, generics, antitrust, competition, Italian competition authority, pharmaceuticals, patents

JEL Classification: K21, K42, L12, L40, L50

Suggested Citation

Geradin, Damien, When Competition Law Analysis Goes Wrong – The Italian Pfizer/Pharmacia Case (February 10, 2014). Available at SSRN: https://ssrn.com/abstract=2393383 or http://dx.doi.org/10.2139/ssrn.2393383

Damien Geradin (Contact Author)

Tilburg Law & Economics Center (TILEC)

Tilburg, 5000 LE
Netherlands

University College London - Faculty of Laws ( email )

Gower St
London WC1E OEG, WC1E 6BT
United Kingdom

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