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Spanish Competition Authority Set to Continue Excessive Pricing Probe Against Leadiant

  • 27/06/2022
  • Articles

On 15 June 2022, the Spanish competition authority (Comisión Nacional de los Mercados y la CompetenciaCNMC) rejected the appeal by Leadiant Biosciences SpA, Leadiant Biosciences Ltd, Leadiant GmbH and Sigma Tau Arzneimittel GmbH (together, Leadiant) against the decision of the Competition Directorate of the CNMC of 3 March 2022 to discontinue the settlement negotiations with Leadiant aiming to terminate the abuse of dominance probe which the CNMC launched against Leadiant on 22 December 2020 for alleged excessive pricing of chenodeoxycholic acid (CDCA) (see, Van Bael & Bellis Life Sciences Insights and News Alert of 22 December 2020). CDCA is an orphan medicine indicated for the treatment of patients afflicted with cerebrotendinous xanthomatosis, a rare metabolic disorder.

In support of its appeal, Leadiant submitted that the Competition Directorate had violated Article 47 of the Spanish competition law (Law 15/2007, 3 July 2007) by rejecting its proposed commitments and ending the settlement procedure. More precisely, Leadiant argued that the Competition Directorate had infringed its rights of defence and had caused it irreparable harm, which are two possible grounds of appeal under Article 47 of the Spanish competition law.

First, regarding the alleged infringement of Leadiant’s rights of defence, the CNMC held that the Competition Directorate had, in fact, provided Leadiant with a sufficiently detailed and reasoned explanation as to why it rejected the proposed commitments. Hence, Leadiant’s rights of defence had not been violated.

Second, regarding its alleged irreparable harm, Leadiant argued that this harm would result from a violation of Article 47(1)(b) and (e) of Law 30/2015, 1 October 2015, which regulates the common administrative procedures in the Spanish public sector. Pursuant to these provisions, a decision is void if it was adopted by an authority which is not competent or if the procedure followed is not the adequate one for that decision. However, the CNMC disagreed with Leadiant, holding that the Competition Directorate was competent and had complied with all applicable legal requirements.

Consequently, the CNMC concluded that the Competition Directorate’s decision was not void, had not ignored Leadiant’s right of defence and had not caused irreparable harm. This implies that the CNMC will continue its excessive pricing probe against Leadiant. A final decision is expected before August 2023.

Leadiant’s pricing practices have already been fined in the Netherlands (see, Van Bael & Bellis Life Sciences Insights and News Alert of 20 July 2021) and Italy (see, Van Bael & Bellis Life Sciences Insights and News Alert of 1 June 2022), whilst they are being investigated in other Member States including Belgium (see, Van Bael & Bellis Life Sciences Insights and News Alert of 9 September 2019)

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