Spanish Competition Authority Fines Colluding Suppliers of Radiopharmaceuticals
The Spanish Competition Authority, the Comisión Nacional de los Mercados y la Competencia (CNMC), imposed today total fines of EUR 5,76 million on Novartis Groupe France and its Spanish subsidiary Advanced Accelerator Applications Ibérica, SLU (AAA), Glo Holdco and its Spanish subsidiary Curium Pharma Spain (Curium), as well as two executives. The fines were meted out on account of a market sharing arrangement in relation to the supply of the radiopharmaceutical fluorodeoxyglucose (18-FDG), a positron emitting radiopharmaceutical used for diagnostic purposes in conjunction with Positron Emission Tomography to assist in the assessment of cancer, coronary artery disease and epileptic seizures (see, attached press release).
According to the CNMC, AAA and Curium are the only parties capable of supplying 18-FDG to hospitals across Spain. They allegedly adopted a joint plan to divide a large part of the customers for radiopharmaceuticals (both public and private hospitals) in various regions of Spain.
The CNMC asserts that the joint plan, which lasted from June 2014 to November 2018, was two-pronged and involved both subcontracting agreements and the exclusive allocation of customers.
- Subcontracting agreements: In hospitals where the firms expected head-to-head competition, the firm normally in a better position to ensure supplies because of the proximity of its cyclotron (i.e., the particle accelerator) refrained from making the best offer. As a result, the firm owning the cyclotron located the furthest from the hospital won the contract at financial terms higher than would have prevailed under normal conditions. The successful bidder then subcontracted the service to its formal rival (whose cyclotron was the closest to the hospital) at a price substantially lower than that actually charged to the hospital.
- Exclusive customer allocation: The firms also observed a non-compete arrangement for many hospitals which materialised in decisions not to compete for given contracts or to submit a deliberately excessive offer. According to the CNMC, this again caused hospitals to pay much more than would have been the case under regular competitive conditions.
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