European Commission Opens Abuse of Dominance Investigation Against Zoetis
- 26/03/2024
- News
The European Commission (the Commission) announced today having opened a formal investigation into animal health company Zoetis under Article 102 of the Treaty on the Functioning of the European Union (TFEU) over suspicion of abusive exclusionary behaviour aimed at preventing the launch of a rival to its biological medicine Librela®, which is used for the alleviation of pain associated with osteoarthritis in dogs (see, attached press release). Librela®, which contains the active substance bedinvetmab, is the first and only medicine approved in Europe for this indication.
In parallel to developing Librela®, Zoetis acquired another late-stage pipeline product for the same indication, which in the European Economic Area would be commercialised by a third party, the French animal health company Virbac, which had exclusive commercialisation rights. The Commission will investigate whether Zoetis abused a dominant market position by (i) terminating the development of this alternative pipeline product; and (ii) refusing to transfer this alternative pipeline medicine to Virbac.
The Commission’s press release notes that “[t]his is the Commission's first formal investigation into a potential abuse relating to the exclusionary termination of a pipeline product which was to be commercialised by a third party”.
The investigation stems from a complaint lodged by Virbac in November 2020. The complaint was followed in October 2021 by unannounced inspections at the Belgian premises of Zoetis (see, Van Bael & Bellis Life Sciences News & Insights of 25 October 2021).
In March 2021, Virbac also brought an action for annulment before the General Court of the European Union (GC) seeking the annulment of the Commission decision granting marketing authorisation for Librela® (Case T-138/21, Virbac v Commission, see here). In support of its action, Virbac claimed, among others, that the Commission decision would “infringe[…] the effectiveness of Article 102 TFEU and […] the principles of legality and sound administration, in so far as [it] gives rise to an abuse of a dominant position by the Zoetis group in relation to the abandonment of the development of the product competing with Librela® and licensed to [Virbac]”. Virbac decided to discontinue the proceedings before the GC in July 2022 and the GC removed the case from the register by Order of 31 August 2022 (available in French here)
