Pharmaceutical Antitrust

201 Pages·2014·1.78 MB·English

Pharmaceutical Antitrust
2014
in 31 jurisdictions worldwide
Contributing editor: Marleen Van Kerckhove
Published by
Getting the Deal Through
in association with:
Anderson Mo¯ri & Tomotsune
Arzinger
AZB & Partners
Bech-Bruun
bnt attorneys-at-law
Caiado Guerreiro & Associados, RL
Calavros & Partners Law Firm
CMS, Russia
ELI˙G, Attorneys-at-Law
Fasken Martineau
Fortak & Karasin´ski Legal Advisors LLP
Hammarström Puhakka Partners, Attorneys Ltd
Hogan Lovells
Intuity
Kim & Chang
King & Wood Mallesons
Legal and Economic Avantgarde SC
Martínez Lage, Allendesalazar & Brokelmann
McDermott Will & Emery Studio Legale Associato
Meyerlustenberger Lachenal Avocats – Attorneys at Law
Oppenhoff & Partner
Pavlov and Partners Law Firm in cooperation with CMS
Reich-Rohrwig Hainz
Souza, Cescon, Barrieu & Flesch Advogados
Tadmor & Co Attorneys at Law
Torres, Plaz & Araujo
Torys LLP
CONTENTS
Pharmaceutical Antitrust 2014 Belarus 3 France 56
Alexander Liessem Christophe Hénin and Anne Servoir
Contributing editor: bnt attorneys-at-law Intuity
Marleen Van Kerckhove
Arnold & Porter LLP Brazil 8 Germany 65
Fabíola Carolina Lisboa Cammarota de Maxim Kleine and Daniel Dohrn
Abreu, Joyce Midori Honda and Oppenhoff & Partner
Luciano Inácio de Souza
Getting the Deal Through is delighted to Souza, Cescon, Barrieu & Flesch Advogados
Greece 73
publish the fully revised and updated
Despina Samara
seventh edition of Pharmaceutical Antitrust, Bulgaria 15 Calavros & Partners Law Firm
a volume in our series of annual reports,
Dessislava Fessenko
which provide international analysis in Pavlov and Partners Law Firm in cooperation
India 79
key areas of law and policy for corporate with CMS Reich-Rohrwig Hainz
counsel, cross-border legal practitioners and Samir R Gandhi, Kamya Rajagopal and
Karan Vir Khosla
business people.
Canada 19 AZB & Partners
R Jay Holsten and Dany H Assaf
Following the format adopted throughout
Torys LLP
the series, the same key questions are Israel 84
answered by leading practitioners in each David E Tadmor, Shai Bakal and Ido Cnaan
of the 31 jurisdictions featured. New China 25 Tadmor & Co Attorneys at Law
jurisdictions this year include Israel, Poland Susan Ning and Zhifeng Chai
King & Wood Mallesons
and Spain. Italy 90
Veronica Pinotti, Martino Sforza and Nicolò
Every effort has been made to ensure that Denmark 31 di Castelnuovo
matters of concern to readers are covered. Klaus Ewald Madsen, Jesper Kaltoft and McDermott Will & Emery Studio Legale
However, specific legal advice should always Mark Gall Associato
be sought from experienced local advisers. Bech-Bruun
Getting the Deal Through publications are Japan 97
updated annually in print. Please ensure Estonia 37 Yusuke Nakano and Junya Kubota
you are always referring to the latest print Aet Bergmann Anderson Mo¯ri & Tomotsune
edition or to the online version at www. bnt attorneys-at-law
GettingTheDealThrough.com.
Korea 103
European Union 42 Hwa Soo Chung and Kyungsun Kyle Choi
Getting the Deal Through gratefully
Maxim Kleine, Daniel Dohrn and Julian Kim & Chang
acknowledges the efforts of all the
Grosse
contributors to this volume, who were
Oppenhoff & Partner
chosen for their recognised expertise. Latvia 109
Getting the Deal Through would also like to Theis Klauberg and Renaˉrs Gasuˉns
extend special thanks to contributing editor Finland 50 bnt attorneys-at-law
Klaus Nyblin and Tuomas Saraste
Marleen Van Kerckhove at Arnold & Porter
Hammarström Puhakka Partners, Attorneys
LLP for her continued assistance with this
Ltd
volume.
Getting the Deal Through
London
April 2014
Publisher The information provided in this publication is
Gideon Roberton general and may not apply in a specific situation.
[email protected] Legal advice should always be sought before
taking any legal action based on the information
Subscriptions provided. This information is not intended to
Rachel Nurse create, nor does receipt of it constitute, a lawyer–
[email protected] client relationship. The publishers and authors
Published by accept no responsibility for any acts or omissions
Business development managers Law Business Research Ltd contained herein. Although the information
George Ingledew 87 Lancaster Road provided is accurate as of April 2014, be advised
[email protected] London, W11 1QQ, UK that this is a developing area.
Tel: [phone]
Alan Lee Fax: [phone] Printed and distributed by
[email protected] © Law Business Research Ltd 2014 Encompass Print Solutions
No photocopying: copyright licences do not apply. Tel: [phone]
Dan White First published 2008
[email protected] Seventh edition
ISSN 1757-6288
www.gettingthedealthrough.com 1
CONTENTS
Lithuania 115 South Africa 145 Ukraine 172
Yvonne Goldammer Stephen Langbridge Timur Bondaryev and Svitlana Malynovska
bnt attorneys-at-law Fasken Martineau Arzinger
Mexico 121 Spain 152 United Kingdom 179
León Ricardo Elizondo Helmut Brokelmann, Mariarosaria Ganino Angus Coulter and Tim Capel
Legal and Economic Avantgarde SC and Claudia Fernández Hogan Lovells
Martínez Lage, Allendesalazar & Brokelmann
Poland 127 United States 187
Sławomir Karasin´ski Switzerland 159 Robert F Leibenluft, Leigh L Oliver and
Fortak & Karasin´ski Legal Advisors LLP Simon Holzer, Pranvera Këllezi, Christophe Lauren E Battaglia
Rapin and Kilian Schärli Hogan Lovells US LLP
Meyerlustenberger Lachenal Avocats –
Portugal 133
Attorneys at Law
Joana Gomes dos Santos Venezuela 195
Caiado Guerreiro & Associados, RL Juan Domingo Alfonzo, Alejandro Gallotti
Turkey 165 and Maritza Quintero
Gönenç Gürkaynak and K Korhan Yıldırım Torres, Plaz & Araujo
Russia 139
ELI˙G, Attorneys-at-Law
Maxim Boulba, Elena Andrianova and Maria
Ermolaeva
CMS, Russia
2 Getting the Deal Through – Pharmaceutical Antitrust 2014
bnt attorneys-at-law BELARUS
Belarus
Alexander Liessem
bnt attorneys-at-law
Pharmaceutical regulatory law Competition legislation and regulation
1 Which legislation sets out the regulatory framework for the 4 Which legislation sets out competition law?
marketing, authorisation and pricing of pharmaceutical products,
The competition law in Belarus is regulated by the following legal
including generic drugs?
acts:
The legal basis for regulating the marketing, authorisation and pric- • Customs Union Treaty on Uniform Competition Principles and
ing of pharmaceutical products in Belarus comprises: Rules of 9 December 2010 (NRLA 12 January 2011, N 3/2642);
• Act on Drugs of 20 July 2006 (National Register of Legal Acts • Presidential Edict on Reinforcement of State Antimonopoly
(NRLA) 2 August 2006, N 122, 2/1258); Regulation and Control of 27 February 2012 (NRLA 5 March
• Act on Public Health of 18 June 1993 (NRLA 25 January 2002, 2012, N 26, 1/13362);
N 10, 2/840); • Act on the Oppression of Monopolistic Activity and on
• Presidential Edict on Setting Prices for Drugs of 11 August 2005 Competition Development of 12 December 2013 (NRLA 17
(NRLA 17 August 2005, N 126, 1/6687); December 2013, N 2/2092) (the Competition Act);
• Presidential Edict on Price Regulation in the Republic of Belarus • Governmental Regulations on Ministry of the Economy Issues
of 25 February 2011 (NRLA 3 March 2011, N 26, 1/12374); of 29 July 2006 (NRLA 21 August 2006, N 130, 5/22734);
• Governmental Regulations on Concept of Drugs Provision • Regulations of the Ministry of Entrepreneurship and Investments
in Belarus of 13 August 2001 (NRLA 27 August 2001, N 79, (MEI) on Detection of Monopolistic Prices of 28 April 2000
5/7393); (NRLA 2 June 2000, N 51, 8/3471);
• Governmental Regulations on Drugs Registration of 2 • Regulations of the MEI on the Register of Commercial
September 2008 (NRLA 10 September 2008, N 213, 5/28269); Organisations Dominating on Goods Markets of 7 July 2000
• Presidential Edict on Licensing of Some Activities of 1 September (NRLA 16 August 2000, N 74, 8/3751);
2010 (NRLA 8 September 2010, N 212, 1/11914); • Regulations of the MEI on Reorganisation of Commercial
• Regulations of the Ministry of Health on Advertising of Drugs Organisations Dominating on Goods Markets of 27 March
of 23 July 2013 (NRLA 26 August 2013, N 8/27822); and 2000 (NRLA 28 April 2000, N 40, 8/3289);
• Regulations of the Ministry of Health on Pricing of Drugs • Regulations of the MEI on Oppression of Anti-competitive
Produced by Belarusian Companies of 7 September 2012 Agreements on Prices of 28 April 2000 (NRLA 2 June 2000, N
(NRLA 11 October 2012, 8/26444). 51, 8/3470);
• Regulations of the Ministry of the Economy on Handling
Applications Concerning Breaches of Antimonopoly Legislation
2 Which bodies are entrusted with enforcing these regulatory rules?
Regarding Unfair Competition of 17 April 2006 (NRLA 15
The Ministry of Health is entrusted with enforcing these regulatory
May 2006, N 73, 8/14358);
rules.
• Regulations of the Ministry of the Economy on Handling
Applications Concerning Assertion of Compliance of Agreements
3 Which aspects of this legislation are most directly relevant to the Restricting Competition with Antimonopoly Legislation of 10
application of competition law to the pharmaceutical sector? April 2006 (NRLA 12 May 2006, N 72, 8/14343);
• Regulations of the Ministry of the Economy on the Prevention
Previously, mark-up barriers concerning drugs produced in Belarus
of Antitrust Legislation Breaches of 17 April 2006 (NRLA 17
or imported from other countries were set forth by the Presidential
May 2006, N 74, 8/14376); and
Edict on Pricing. In 2011 a new Presidential Edict on price regula-
• Regulations of the Ministry of the Economy on the Determination
tion changed price regulations to a great extent. At present, mark-up
of the Dominant Position of the Commercial Organisations on
barriers still apply to drugs produced by residents of Belarus and are
Goods Markets of 17 October 2002 (NRLA 4 November 2002,
included in the list of drugs with regulated prices. This list is specified
N 122, 8/8695).
by governmental regulations. The prime costs of drugs produced by
residents of Belarus are set by manufacturers and should not exceed
the maximum prime costs set by the Regulations of the Ministry of 5 Are there guidelines on the application of competition law that are
Health on Drugs Pricing. directly relevant to the pharmaceutical sector?
Mark-up barriers are cancelled for drugs imported from other
Currently, none exist. Regarding the pharmaceutical sector, as well
countries or those not included in the list of drugs with regulated
as other sectors, the competition law rules in Belarus are uniformly
prices.
applied.
www.gettingthedealthrough.com 3
BELARUS bnt attorneys-at-law
6 Which authorities investigate and decide on pharmaceutical publicly available information on whether such inquiries have been
mergers and the anti-competitive effect of conduct or agreements conducted in the pharmaceutical sector.
in the pharmaceutical sector?
The pricing policy departments (PPD) of the Ministry of the
10 Is the regulatory body for the pharmaceutical sector responsible
Economy and regional (Minsk city) executive committees are
for sector-specific regulation of competition distinct from the
authorised to exercise control over mergers and any anti-competitive
general competition rules?
conduct. According to article 9 of the Competition Act, the consent
No specific mechanism exists. The Ministry of Health is not entitled
of the PPD is required for establishing holding companies or asso-
to establish sector-specific regulation of competition distinct from
ciations of commercial organisations, and mergers and acquisitions
the general competition rules.
are subject to clearance by the PPD (eg, statutory consolidations or
if the company covering more than 35 per cent of a specific market
acquires shares of a company appearing in the same market). The 11 Can antitrust concerns be addressed with industrial-policy type
Eurasian Economic Committee is responsible for investigating and arguments, such as strengthening the local or regional research
enforcing the competition rules of the Customs Union if a violation and development activities?
is made on transboundary markets (see question 14).
Support of scientific and innovation activity is designated as one
of the preferential areas of socio-economic policy in Belarus. Tax
7 What remedies can competition authorities impose for exemptions, exemptions from customs duties and other prefer-
anti-competitive conduct or agreements by pharmaceutical ences are applied to the companies performing research and devel-
companies? opment (including the Presidential Edict on Encouragement of the
Foundation and Development of Productions Based on Innovative
Concerning the rules established by the respective above-mentioned
and High Technologies of 8 July 1996). Antitrust concerns may be
Regulations of the ME on the Prevention of Antitrust Legislation
raised in the event of abuse by innovators of their dominant position
Breaches in case of Antitrust Violation, the PPD may in given cases
or antitrust violations specified by the Competition Act.
demand that an offending entity stop the relevant illegal activity
(ie, cancel an anti-competitive agreement, eliminate causes affecting
pricing, and others). If the offender does not obey, the PPD is entitled 12 To what extent do non-government groups play a role in the
to hold it responsible under the Administrative Code by imposing a application of competition rules to the pharmaceutical sector?
penalty (ranging from €195 to €488, depending on the offence). In
Non-governmental groups do not have any additional rights in com-
the case of a gross violation of antitrust legislation, an offender may
parison to those granted to other companies.
be held responsible under the Criminal Code (eg, predatory pricing,
competition restriction). The Presidential Edict on Reinforcement
Review of mergers
of State Antimonopoly Regulation and Control set forth additional
penalties for violation of antitrust laws. Thus, for abuse of dominant
13 To what extent are the sector-specific features of the
position on the market a penalty ranging from €195 to €977 may be
pharmaceutical industry taken into account when mergers
imposed on a responsible company’s official. A penalty of up to 10
between two pharmaceutical companies are being reviewed?
per cent of the company’s turnover for the year previous to the year
The general rules on reviewing mergers by antitrust authorities are
when the violation was disclosed may be imposed on the company.
established by the Competition Act. They are applicable in any sec-
A penalty is applied to the turnover earned from the sale of goods
tor of the current economy, including the pharmaceutical industry,
on the market where the violation was made. The same penalty is
without regulating any sector-specific feature.
set forth for conclusion and execution of antimonopoly agreements,
unfair competition and coordinated actions.
Additionally, Customs Union Treaty on Uniform Competition 14 How are product markets and geographic markets typically
Principles and Rules of 9 December 2010 between Belarus, Russia defined in the pharmaceutical sector?
and Kazakhstan) defines penalties for breach of its provisions in the The pharmaceutical legislation does not define product markets
transboundary markets (involving the territories of two Customs or geographical markets. However, the competition rules and the
Union member states). In the case of unfair competition by legal antitrust law contain such definitions. According to article 1 of the
entities a fine ranging from €2,083 to €10,417 can be imposed; com- Competition Act, a product market is defined as the area of cir-
pany’s executives can be fined from €280 to €416. culation of a certain commodity having no substitutes or fungible
commodities within the territory of Belarus; or part of its territory
determined on the basis of the potential spending power of a buyer
8 Can private parties obtain competition-related remedies if they
to purchase a commodity in a certain territory and absence of this
suffer harm from anti-competitive conduct or agreements by
power out of that mentioned area. Apart from that, the geographical
pharmaceutical companies? What form would such remedies
markets are usually defined as state markets including the territory
typically take and how can they be obtained?
of Belarus; and local markets including certain districts (city, town,
Belarusian antitrust legislation does not provide any specific reme-
village, district, etc). Furthermore, geographical borders of the mar-
dies to private parties suffering harm from anti-competitive conduct
ket can also be determined by economic, technological or adminis-
or agreements. However, the general rules of compensation set forth
trative barriers obstructing consumers from buying products within
in the Civil Code have to be applied.
a particular territory.
On 1 January 2012 the Customs Union Treaty on Uniform
9 May the antitrust authority conduct sector-wide inquiries? If so, Competition Principles and Rules came into force. The Treaty reg-
have such inquiries ever been conducted into the pharmaceutical ulates competition of Belarusian, Russian and Kazakh companies
sector and, if so, what was the main outcome? on the transboundary markets – the markets in which geographic
boundaries cover territories of at least two member states (Belarus,
Under the Competition Act, antitrust authorities may conduct
Russia or Kazakhstan).
sector-wide inquiries. Besides a principle of public disclosure of
information about activities of antitrust authorities will be intro-
duced in Belarus from 1 July 2014. Until now there has been no
4 Getting the Deal Through – Pharmaceutical Antitrust 2014
bnt attorneys-at-law BELARUS
15 In what circumstances will a product and geographical overlap Parties to the agreement are free to submit it to the PPD on order
between two merging parties be considered problematic? to find out whether this agreement complies with the antimonopoly
Antitrust authorities may observe mergers, acquisitions, reorganisa- legislation or not.
tions and liquidations of commercial organisations as far as this may
lead to dominance within the specific market. The extent of control
20 Describe the nature and main ramifications of any cartel
is not defined by legislation but, in consideration of article 9 of the
investigations in the pharmaceutical sector.
Competition Act, various regulations with reference to transactions
There have not been any cartel investigations in the pharmaceutical
in shares mast be adhered to. Thus, in the event of stock (share)
sector as of yet.
purchase a prior consent of the PDD is required if a company cov-
ers more than 35 per cent of a specific product market, or the asset
value of one of the contracting parties is more than 100,000 basic 21 To what extent are technology licensing agreements considered
units (approximately €972,300 at the exchange rate of the National anti-competitive?
Bank on 19 February 2014), or a contracting party’s annual revenue
Under the Governmental Regulations on Registration of Licensing
is more than 200,000 basic units (approximately €1.9 million). In
Agreements, Cession and Pledge of Intellectual Property Rights
general, such transactions may be invalidated by court decisions.
Agreements and Franchise Agreements of 21 March 2009, licensing
However, a product and geographical overlap between two merg-
agreements have to be registered in the ‘State register of licensing
ing parties is not considered to be problematic. In general, there is
agreements, cession and pledge of intellectual property rights agree-
a single-case decision to make, namely, to define a merger company
ments’, by the National Centre of Intellectual Property. According to
as dominant in the specific market or not (see question 26). To con-
the legislation that was in effect before the above-mentioned regula-
clude, a party is allowed to deal within the market unless and until
tion entered into force, the National Centre of Intellectual Property
an abuse of its dominant position arises.
was entitled to reject a registration if the agreement did not com-
ply with the applicable laws, including and in particular antitrust
16 When is an overlap with respect to products that are being law. However, the National Centre of Intellectual Property lost this
developed likely to be problematic? competence. Under the regulations the parties to the agreement
bear liability for conformity of the agreement with applicable laws,
An overlap with respect to pipeline products is not considered to be
including antitrust law.
problematic. It is an issue in certain cases, for example, if a merger
company is defined as market-dominant (see question 26). The party
may act on the market unless it starts to abuse its dominant position. 22 To what extent are co-promotion and co-marketing agreements
considered anti-competitive?
17 Which remedies will typically be required to resolve any issues According to article 13 of the Competition Act, co-promotion and
that have been identified? co-marketing agreements are considered anti-competitive if they
have the purpose or effect of restraining competition, or a company
There are no regulations covering the remedies to be applied in such
that is not acting within the same market and not a member of a
cases. Basically, if antitrust concerns are raised, the general regula-
group of companies is trying to coordinate the actions of other legal
tion relating to remedies will be applied (see question 8).
entities (eg, agreements leading to market allocation based on ter-
ritorial principles, types and scope of transactions, types and scope
18 Would the acquisition of one or more patents or licences be of products, consumers and others). This issue must be followed by
subject to merger reporting requirements? If so, when would that the PPD of the Ministry of the Economy in any case.
be the case?
The acquisition of one or more patents or licences is not subject to
23 What other forms of agreement with a competitor are likely
merger reporting requirements per se.
to be an issue? Can these issues be resolved by appropriate
confidentiality provisions?
Anti-competitive agreements
According to the Regulations of the MEI on Oppression of Anti-
19 What is the general framework for assessing whether an Competitive Agreements on Prices, an agreement with a competi-
agreement or practice can be considered anti-competitive? tor is likely to be an anti-competitive issue if its existence obviously
causes restrictions on other companies to enter the market, even
The general framework for assessing whether an agreement or
though there is an unsatisfied demand and quite a high level of prof-
practice can be considered anti-competitive is established by the
itability; restrictions for other companies willing to enter a respective
Competition Act (article 13). Thus incorporation (or participa-
market to access input materials; or restrictions for other compa-
tion in existing associations) and agreements between commercial
nies to access a distribution network. If an agreement is considered
organisations are considered void if the following circumstances are
anti-competitive, the PPD sends the potential offender an obligatory
present or result from these:
demand to rescind the anti-competitive agreement and to implement
• market allocation (based on territory, types of transactions, sorts
restitution in integrum. The basic confidentiality provisions applied
of goods, consumers);
in such cases are regulated by article 140 of the Civil Code and the
• barriers for other legal entities to enter the market;
Law on Commercial Secrets of 5 January 2013. The parties must
• arbitrarily raising, reduction or restraint of prices;
define the list of information considered confidential in written
• unauthorised limitation of production and control over sale of
form. However, under article 11 of the Law on Commercial Secrets
goods; or
parties to the agreement are bound to submit corresponding confi-
• refusals to enter into agreements with certain sellers or buyers.
dential information at the request of antitrust authorities.
The above-mentioned agreements or economic procedures may be
found acceptable by the antimonopoly authority providing they 24 Which aspects of vertical agreements are most likely to raise
encourage economic and technical development in Belarus and are antitrust concerns?
to the advantage of consumers.
Article 13 of Competition Act and the Regulations of the MEI on
Oppression of Anti-Competitive Agreements on Prices lay down rules
www.gettingthedealthrough.com 5
BELARUS bnt attorneys-at-law
of exposure of antitrust agreements and establish criteria to define • force other parties to enter an agreement based on unfavourable
whether a vertical agreement violates antitrust rules. Considering terms or deny the conclusion of an agreement if the other party
this, a vertical agreement may raise antitrust concerns if: does not accept the unfavourable terms of the contract;
• one of the contracting parties dominates the specific market; • enter agreements that restrict the freedom of other parties to set
• an agreement limits or may limit competition directly (by resale prices or to define terms of agreement;
price maintenance) or indirectly (exchange of information, pro- • enter into agreements restricting production or supplying a
duction restraint, application of specific accounting techniques, party with market power to control certain markets; or
etc); or • include discriminating conditions in agreements to put the
• an agreement prohibits the buyer from entering into similar respective contractor in an unequal position.
agreements with the competitors of the seller (excluding the
situation when a buyer trades under the seller’s trademark or
27 When is a party likely to be considered dominant or jointly
granted any other types of intellectual property).
dominant?
In deciding whether or not an agreement is anti-competitive, the According to article 5 of the Competition Act, a party is considered
PPD considers whether it affects: to be dominant or jointly dominant on a particular market if it has
• the business decision-making power of the parties involved; the possibility to influence the market crucially or to impede other
• supply in a specific market; and parties from entering the market and its market share is more than
• demand and supply correlation. 35 per cent. The dominant position of the party is determined by the
PPD of the Ministry of the Economy. Entities considered as domi-
If the agreement affects any of the above issues, it is considered anti- nating on the market are registered at the State Register of commer-
competitive excluding situations when: cial organisations dominating on goods markets. As the case may
• a market share of each party to the agreement is no more than be, the PPD takes the decision based on a market situation. With
15 per cent; reference to this, it is possible to register a party as dominant even if
• there is a contract of franchise; or its share is under the respective limit value.
• an agreement will encourage economic and technical develop-
ment in Belarus.
28 Can a patent holder be dominant simply on account of the patent
that it holds?
25 To what extent can the settlement of a patent dispute expose the No, a patent is not a criterion for defining whether a party is domi-
parties concerned to liability for an antitrust violation? nant or not. But a holder can be found dominant if the patent is used
A patent dispute settlement does not expose the parties concerned for the production of goods and there are no other substitutes.
to liability for an antitrust violation unless the rules set forth by the
Competition Act are obeyed (see questions 19 and 26).
29 To what extent can an application for the grant of a patent expose
the patent owner to liability for an antitrust violation?
Anti-competitive unilateral conduct
The Patent Act of 16 December 2002 establishes rules of patent-
ability of inventions, utility models and industrial designs. According
26 In what circumstances is conduct considered to be anti-
to article 2, an invention needs to be novel, appropriate for indus-
competitive if carried out by a firm with monopoly or market
trial use and have an inventive element. A utility model needs to
power?
be novel and appropriate for industrial application (see article 3).
According to article 12 of the Competition Act, firms with market
Finally, an industrial design needs to be novel and original (see arti-
power must not:
cle 4). Generally patentability is examined by the patent authority in
• impede other parties from entering the market;
accordance with the respective rules provided by the regulations of
• withdraw goods from the market, restrict production or conduct
the Committee on Science and Technology on handling the applica-
other measures that may cause shortage, a deliberate increase or
tions for the grant of the patent.
a decline in prices;
Alexander Liessem [email protected]
Svobody Square 23-85 Tel: [phone]
220030 Minsk Fax: [phone]
Belarus www.bnt.eu
6 Getting the Deal Through – Pharmaceutical Antitrust 2014
bnt attorneys-at-law BELARUS
30 To what extent can the enforcement of a patent expose the patent and importers of drugs may not set prices in any other way than
owner to liability for an antitrust violation? is prescribed by the Edict (see question 3). The Regulations of the
In cases of disuse or insufficient use of a patent by its holder within a Ministry of Health of 24 June 2005 contain a list of medicines pro-
certain term (five years for inventions; three years for utility models duced in Belarus that must be available at any pharmacy.
and industrial designs), article 38 of the Patent Act says that any
person willing and able to use such patented invention, utility model
34 Has there been an increase in antitrust enforcement in the
or industrial design may ask for the issue of a licensing agreement. If
pharmaceutical sector in your jurisdiction? If so, please give an
the patent holder refuses to conclude an agreement, the other party
indication of the number of cases opened or pending and their
must claim a compulsory licence. In the case of licensing, the court
subject matters.
defines the limits for exercising the respective patent as well as con-
The pharmaceutical market is highly monopolised and controlled by
cerning the amount, terms and methods of payments. The court is
the state. According to the information of PPD available there were
entitled to refuse enforcement of a patent if the patent holder is able
five disputes relating to the pharmaceutical sector submitted to PPD
to cause the disuse or the insufficient use of the patent with reason-
in 2007–2013. Three of them were brought against governmental
able excuse.
authorities and a state-owned enterprise for creating barriers for
claimants to enter into the Belarusian market and similar antitrust
31 To what extent can certain life-cycle management strategies actions. In all of those cases PPD found governmental authorities
expose the patent owner to liability for an antitrust violation? (including the Ministry of Health) guilty of violating competition
Life-cycle management strategies may expose the patent owner to law. PPD addressed warning letters to the infringers. The infring-
liability for antitrust violation if they are intended to prevent compe- ers reported to PPD about the elimination of unlawful actions. The
tition on the market, to put barriers to entry, that is, if this strategy other two disputes dealt with the infringements of trademark rights,
may be recognised as anti-competitive in terms of articles 12 and 13 in particular the illegal registration of trademarks.
of the Competition Act (see questions 19 and 26).
35 Is follow-on litigation a feature of pharmaceutical antitrust
32 Do authorised generics raise issues under the competition law? enforcement in your jurisdiction? If so, please briefly explain the
nature and frequency of such litigation.
In general the practice of authorised generics does not raise any issue
under competition law as long as basic competition rules provided There is no follow-on litigation principle in Belarusian law. A court
by the Competition Act are obeyed (see question 19). is not bound by previous PPD’s decision.
In case of violation of competition law the claimant can submit
the dispute to PPD or initiate court proceedings. The decision of PPD
33 To what extent can the specific features of the pharmaceutical is legally binding, however, a party to a dispute is entitled to initiate
sector provide an objective justification for conduct that would further court proceedings if it does not agree with PPD’s decision or
otherwise infringe antitrust rules? if another party refuses to follow the decision.
Whereas antitrust legislation prohibits price fixing, market shar-
ing and other abusive activities leading to competition restraint,
pharmaceutical regulations provide for the reverse. Thus, accord-
ing to the Presidential Edict on Setting Prices for Drugs, producers
www.gettingthedealthrough.com 7
BRAZIL Souza, Cescon, Barrieu & Flesch Advogados
Brazil
Fabíola Carolina Lisboa Cammarota de Abreu, Joyce Midori Honda and
Luciano Inácio de Souza
Souza, Cescon, Barrieu & Flesch Advogados
Pharmaceutical regulatory law CMED is responsible for medicine market regulation and for estab-
lishing criteria for definition and adjusting of medicines prices.
1 Which legislation sets out the regulatory framework for the
marketing, authorisation and pricing of pharmaceutical products,
including generic drugs? 3 Which aspects of this legislation are most directly relevant to the
application of competition law to the pharmaceutical sector?
All companies acting in the pharmaceutical sector are under the
supervision of the National Health Surveillance Agency (ANVISA). ANVISA and the Administrative Council for Economic Defence
The main legislation that sets out the regulatory framework for the (CADE) have different and independent roles. While ANVISA aims
market includes: to ensure the medical safety of health products and services, CADE
• Law 5,991/1973, which provides for the sanitary control of is responsible for preserving competition between the players in the
drugs, medicines, pharmaceutical inputs and related products; market. Although the sector is under the jurisdiction of a technical
• Law 6,360/1976, which controls the register of pharmaceutical body, this does not exempt it from compliance with the antitrust
products and issuance of operating licences and permits; rules. Indeed, there is a coexistence of both legal frameworks in
• Decree 79,094/1977, which regulates Law 6,360/1976 subjects Brazil.
the regulation of medicines, pharmaceutical inputs, drug-related In 2013 CADE and ANVISA executed a cooperation agreement
products and others to the National Health Surveillance System; according to which the agencies agreed to cooperate with each other
• Law 9,782/1999, which establishes ANVISA; exchanging documents and information, sharing technical reports,
• Law 9,787/1999, which disciplines generic drugs; studies and research material, holding meetings and seminars and
• Law 6,437/1977, which configures violations to the federal sani- jointly working on the promotion of activities and projects.
tary legislation (ie, persons or companies that operate without
regulatory permits; restrain inspection of regulatory authorities, Competition legislation and regulation
etc), and it also establishes general penalities (ie, warning, seizure
of product, etc); 4 Which legislation sets out competition law?
• Law 10,742/2003, which establishes the Drug Market The legislation that sets out competition law in Brazil is Federal Law
Regulation Chamber (CMED); and 12,529/2011 (the Competition Law), effective since 29 May 2012.
• several Resolutions of ANVISA, including RDC 17/2010 (good The Competition Law structured the Brazilian Competition System
manufacturing practices); RDC 25/2007 (outsourcing of pro- (SBDC), providing prevention and repression of violations against
duction steps, quality-control and storage of medicines); RDC the economic order, and introduced the pre-merger notification sys-
66/2007 (Certificate of Best Practices); and RDC 96/2008 (mar- tem in Brazil.
keting, advertising and promotion of medicines).
5 Are there guidelines on the application of competition law that are
Finally, CMED, from time to time, issues specific resolutions to
directly relevant to the pharmaceutical sector?
inform the market regarding new medicine prices and the adjust-
In Brazil, there are no specific guidelines that are directly relevant to
ment coefficient used for the applicable increase, based on billing
the pharmaceutical sector. However, there are two important resolu-
information periodically provided by pharmaceutical companies.
tions established by CADE that apply to all sectors of the economy:
first, Resolution 2/2012, which regulates the pre-merger notification
2 Which bodies are entrusted with enforcing these regulatory rules? of transactions that are reportable according to Law 12,529/2011
ANVISA, under the authority of the Ministry of Health, is the pri- and provides the fast-track analysis of merger filings (on 19 February
mary authority for enforcing regulatory rules. It coordinates the 2014, CADE issued a public consultation to inform the general pub-
National Health Surveillance System and its main role is to protect lic and receive comments about the proposed changes in Resolution
and promote the population’s health by ensuring the sanitary safety 2/2012, which establishes, among other things, the inclusion of an
of health products and services. ANVISA is responsible for medi- eligible case for the fast-track procedure), among other relevant mat-
cines registration proceedings, issuance of licences and permits and ters for the merger control system in Brazil; and second, Resolution
also for establishing regulations applying to the sector. 3/2012, which establishes a list of fields of business activities for
ANVISA also monitors drug prices and gives technical support the purpose of the application of fines set forth in article 37 of Law
for the definition of drug prices. One of the agency’s divisions is the 12,529/2011 and other measures.
Executive Secretariat of the CMED, an interministerial body com-
posed of representatives of the State Office and the Ministries of
Health, Finance, Justice, Development, Industry and Foreign Trade.
8 Getting the Deal Through – Pharmaceutical Antitrust 2014
Souza, Cescon, Barrieu & Flesch Advogados BRAZIL
6 Which authorities investigate and decide on pharmaceutical activities in the vitamins market with a total fine due of over 15
mergers and the anti-competitive effect of conduct or agreements million reais; and
in the pharmaceutical sector? • in 2005, in Administrative Proceeding No. 08012,009088/1999-
The Competition Law merged the roles of investigating anti-com- 48 concerning the relevant market of manufacturing of drugs in
petitive conduct and deciding on mergers and conduct into one sin- the Brazilian territory, CADE found against 20 companies for
gle enforcement agency, that is, CADE. Currently, the new CADE is establishing unlawful agreements between themselves that con-
composed of: sisted of fixing conditions for sales and distribution of drugs in
• the General Superintendency (GS), responsible for the investiga- the market; creating market barriers to new entrants; and refus-
tion of all anti-competitive conduct and for rendering clearance ing to sell goods within the standard payment methods in order
decisions, on a preliminary basis, on merger filings in all eco- to boycott generics not manufactured by the laboratories in
nomic sectors, including in the pharmaceutical sector; and collusion.
• the Administrative Tribunal, which is a decision-making body
composed of one chairman and six commissioners, duly In the second instance, CADE applied a fine of 1 per cent of the gross
appointed by the president of the republic and responsible for: revenue of the companies involved and a penalty of 2 per cent of
• judging administrative proceedings relating to anti-competi- the gross revenue of the leading company. Also, CADE obliged the
tive conduct; companies to publish the decision in the newspapers, fixed a daily
• reviewing the merger filings cleared by the General fine for each day of non-compliance following the decision to order
Superintendency in case of third parties’ appeal or at the the cessation of anti-competitive activities and CADE’s commission-
Tribunal’s request; and ers also recommended the creation of compliance programmes to
• judging oppositions submitted by the General all companies.
Superintendency with respect to merger filings; and
• the Department of Economic Studies, responsible for providing
8 Can private parties obtain competition-related remedies if they
economic opinions and studies.
suffer harm from anti-competitive conduct or agreements by
pharmaceutical companies? What form would such remedies
Besides CADE, the SBDC is composed of the Secretariat for
typically take and how can they be obtained?
Economic Monitoring of the Ministry of Finance (SEAE), which is
Private parties may report the harmful effects of anti-competitive
responsible for promoting competition among government agencies
conduct or agreements by pharmaceutical companies. However, it
(including ANVISA), to express opinions of general interest to the
is important to note that article 135 of CADE’s Resolution 1/2012
economic order, to develop studies for different sectors of public
determines that the commencement of any type of administrative
policies, and to propose the revision of laws and regulations that
proceedings established by the Competition Law to investigate pri-
may affect competition in all sectors of the Brazilian economy.
vate matters without public interest is not permitted. For this reason,
in case a private party wishes to obtain a specific remedy against
7 What remedies can competition authorities impose for pharmaceutical companies for a private matter that does not affect
anti-competitive conduct or agreements by pharmaceutical the public interest (ie, competition as a whole and consumer wel-
companies? fare), it would need to seek such remedies before the judiciary. Such
CADE shall analyse the conduct of the object of an administrative provision derives from the goals of the Competition Law, which pro-
proceeding and may apply penalties on companies, legal entities tects competition and consumer welfare instead of private parties,
and/or individuals, including administrators that are involved in vio- although they can indirectly benefit from CADE’s decisions.
lations of the economic order. CADE may impose pecuniary and Most CADE investigations that have resulted in a finding of
non-pecuniary penalties such as (i) in case of legal entities, a fine anti-competitive behaviour were ex officio investigations. It is pos-
ranging from 0.1 to 20 per cent over the gross sales of the company, sible that CADE received anonymous tip-offs from third parties, but
group or conglomerate in the field of the business activity in which this has not been disclosed in public records.
the violation occurred; or (ii) in the case of individuals or public
or private legal entities, which do not perform business activity,
9 May the antitrust authority conduct sector-wide inquiries? If so,
where it is not possible to use the gross sales criterion, the fine will
have such inquiries ever been conducted into the pharmaceutical
be between 50,000 and 2 billion reais; and (iii) if the administrator
sector and, if so, what was the main outcome?
is directly or indirectly responsible for the violation, when negligence
According to the Competition Law, SEAE is the agency in charge of
or wilful misconduct is proven, a fine of between 1 and 20 per cent
competition advocacy activities. SEAE may, by its own initiative or
of that applied to the company referred in item (i) or the legal entity
at the request of CADE or other authorities, develop studies evaluat-
referred in item (ii).
ing the competitive situation of specific sectors of the national eco-
According to CADE’s rules, in case of recurrences the fines shall
nomic activity, and prepare industry studies that serve as input for
be doubled. Non-pecuniary penalties may also be applied without
the participation of the Ministry of Finance in the creation of secto-
affecting existing or subsequent penalties. For example, CADE may
rial public policies in the forums in which this Ministry has a seat.
oblige the company to publish the decision in newspapers, may pro-
Since the Competition Law came into effect (29 May 2012), SEAE
hibit a company: (i) from bidding for public service concessions for
has not published any inquiries in the pharmaceutical sector.
a term of not less than five years; (ii) from making payments by
The only documents prepared by the authorities are not sector-
instalments of federal taxes and impose a prohibition on receiving
wide inquiries but rather academic papers. In 2008, SEAE prepared
fiscal incentives or public subsidies. Also, CADE may demand the
a paper about innovation in the Brazilian pharmaceutical market
spin-off of the company, transfer of corporate control, sale of assets
that concluded that Brazil needs a more efficient regulatory frame-
or partial interruption of activities and any other action required to
work to allow innovation to grow in this market and, in 2001,
eliminate the harmful effects to the economic order.
SEAE prepared a paper about government policy and regulation
Based on CADE’s precedents, two examples of cartel cases can
of the pharmaceutical market, which discusses public expenditure
illustrate the fines already imposed by CADE on pharmaceutical
on pharmaceutical products, price formation and the impacts of the
companies:
Generics Law.
• in 2007, in Administrative Proceeding No. 08012,004599/1999-
18, companies were condemned for the practice of cartel
www.gettingthedealthrough.com 9