More Details Emerge Regarding Fine Imposed by Belgian Competition Authority on Professional Organisation of Pharmacists
At the end of May 2019, the Belgian Competition Authority (“BCA”) imposed a fine of EUR 1 million on the professional organisation of pharmacists (“Orde der Apothekers”/ “Ordre des pharmaciens”) (the “PO”) because the PO had taken a range of exclusionary measures to thwart the development of MediCare-Market, a successful retailer of both medicines and other, less regulated health products (see, Van Bael & Bellis Life Science Newsflash of 5 June 2019).
The BCA has now published the non-confidential version of its decision of 28 May 2019 (the “Decision”) which, as is customary, contains the report of the prosecutor in competition matters (“auditeur”/”auditeur”), submissions of the complainant and of the targeted entity, as well as the actual reasoning of the competition college, the decision-making body of the ABC (see, attached).
The BCA found that the PO had relied on a range of techniques to hamper MediCare-Market’s development, including disciplinary proceedings and court action.
Interestingly, the BCA also blamed the PO for limiting price competition, even though the scope for such competition was narrow as far as medicines are concerned. However, the BCA took issue first and foremost with attempts made by PO to stifle competition for health products other than medicines. For example, PO had taken court action against MediCare-Market on account of publicity made by that company which promised price reductions on non-pharmaceutical products. In PO’s view, this constituted unethical behavior unbecoming of a pharmacist. The ABC disagreed and added that, to the contrary, MediCare-Market’s actions had been welcome in that they made pharmacists aware of the legitimacy of price competition for products other than medicines. While the BCA is somewhat ambiguous on this, it also seemed to favour price competition for medicines in forms such as end-of-year reductions. This is illustrated by the start of the BCA’s analysis which refers to an OECD finding of 2017 that the pricing level for medicines in Belgium is too high compared to that of its neighbouring countries.
Additionally, the BCA made short shrift of the PO’s public service remit. Relying in part on a 2014 judgment of the EU General Court which confirmed a European Commission decision which had found the French “Ordre national des pharmaciens” to be in breach of the competition rules (case T-90/11, Ordre national des pharmaciens and others v. European Commission, ECLI:EU:T:2014:1049), the BCA maintained that legitimate public-service obligations cannot serve as a pretext for anti-competitive behaviour. Similarly, the BCA also rejected the general interest arguments that PO was supposedly right in pursuing MediCare-Market in order to (i) protect the credibility of the pharmacist’s profession; (ii) safeguard public health; and (iii) guard against the excessive consumption of medicines. The BCA went even further by positing that the general approach followed by the PO to foreclose MediCare-Market or at least stunt its development amounted to a restriction of competition by object. Showing its anticompetitive effects was therefore not necessary (the BCA still went on to demonstrate the adverse effects on competition resulting from the PO’s conduct).