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    • 27/06/2022
    • Articles

    Spanish Competition Authority Set to Continue Excessive Pricing Probe Against Leadiant

    On 15 June 2022, the Spanish competition authority (Comisión Nacional de los Mercados y la Competencia – CNMC) 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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    • 23/06/2022
    • Articles

    Belgian Government Think-Tank Publishes Study on Compulsory Licensing for Expensive Medicines

    On 14 June 2022, the Belgian Health Care Knowledge Centre (KCE), a research institute funded by the federal government, published a study discussing “Compulsory Licensing for Expensive Medicines” (the CL Study). The CL Study was commissioned by the Committee for Health and Equal Opportunities of the federal Chamber of Representatives which is reviewing bill 55K407 that seeks to expand the existing system of compulsory licensing for patented medicinal products in the interest of public health (Article XI.38(1) Code of Economic Law). The publication of the CL Study preceded by a few days the adoption of an intellectual property waiver for Covid-19 vaccines by the Twelfth Ministerial Conference of the World Trade Organisation (see, Van Bael & Bellis Life Sciences News and Insights of 20 June 2022) and was almost immediately welcomed in Parliament by the Minister of Social Affairs and Public Health. While the compulsory licensing of pharmaceutical patents is therefore clearly a trending topic, the CL Study is strikingly cautious in making policy recommendations. This is because compulsory licensing for expensive medicines not only raises questions of principle but also of practical implementation. Additionally, high medicine prices are generally the result of increasingly complex technological innovations. The CL Study therefore advocates a comprehensive approach that considers the entire regulatory framework, not just patent law, and is in favour of calibrated measures that do not jeopardise the benefits of the current system which seeks to encourage and reward innovation. That is a crucial concern for a country such as Belgium which hosts a thriving ecosystem of pharmaceutical and biotechnological research, development, clinical trials and production facilities. Additionally, the incentives for innovation encompass a range of measures covering patent law, know-how, data and market exclusivity, and targeted rules that stimulate the development of orphan and paediatric medicines. Lastly, the CL Study fully recognises the difficulties associated with defining an excessive price for medicines. It notes that the excessive pricing cases brought by European competition authorities all involve off-patent medicines (for a recent example with regard to Leadiant, see, Van Bael & Bellis Life Sciences News and Insights of 1 June 2022). On this basis, the CL study makes the following policy recommendations: • Compulsory licensing should not be an end, but rather a means to bring down prices in exceptional circumstances. • EU Member States should coordinate any initiatives to impose compulsory licensing in specific cases. • Adaptations to the current rules governing exclusivity and data access could be envisaged but require careful consideration. • In Belgium, the exchange of expertise between pricing and reimbursement authorities and the Belgian Competition Authority should be improved. • There is always scope for a more robust pricing and reimbursement policy and increased cooperation at EU and international level. • The patent exemption for pharmacists should be optimised. • Universities and public research institutions should apply “socially responsible licensing conditions”. • Collaborative models for patent licensing should be encouraged.

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    • 20/06/2022
    • Articles

    World Trade Organisation Twelfth Ministerial Conference Adopts IP Waiver for Covid-19 Vaccines

    On 17 June 2022, the World Trade Organisation announced that its twelfth Ministerial Conference in Geneva gave rise to a series of agreements, dubbed the “Geneva Package”, in a range of areas, including fisheries subsidies, food safety and agriculture, WTO reform, and the WTO response to emergencies. As part of that last group of measures, the delegations adopted a controversial Ministerial Decision on the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) which creates an intellectual property waiver for Covid-19 vaccines (the IP Waiver) (see, attachment). The IP Waiver brings about a further relaxation of the existing rules that already allow WTO members to use the subject matter of a patent without the authorisation of the right holders (Article 31, TRIPS Agreement). Pursuant to the new more liberal rules, (i) the proposed user will no longer be required first to make efforts to obtain a licence from the right holder (Article 31(b), TRIPS Agreement); (ii) members will be allowed to drop the requirement that use of the patent under Article 31 should serve predominantly the domestic market (Article 31(f), TRIPS Agreement) (but re-exportations of vaccines following exports under the eased rules will be limited); and (iii) the adequate remuneration contemplated by Article 31(h), TRIPS Agreement will have to reflect the humanitarian context of the vaccination programme. The IP Waiver did not seem to satisfy any of the stakeholders. Proponents of the IP Waiver decry (i) its limited five-year duration (which is subject to an extension); (ii) its narrow substantive scope (even though the IP Waiver requires a further decision within six months on a possible broadening of its application to Covid-19 diagnostics and therapeutics); and (iii) its failure to address the status of know-how which often plays an important role in the creation of pharmaceutical technologies. At the other end of the spectrum, industry representatives expressed their horror at the further erosion of intellectual property rights (here and here) which they maintain constitute the bedrock of the enduring success of the industry. That success was epitomised by the speed with which safe and efficacious Covid-19 vaccines reached the patient and by the current worldwide glut of such vaccines.

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    • 17/06/2022
    • Articles

    Luxemburg - Competition Authority Publishes Results of Sector Inquiry into Medicines and Pharmacies and Makes Recommendations for Regulatory Reform

    On 16 June 2022, the Luxemburg Competition Authority (LCA) published its report (the Report) detailing the outcome of a sector inquiry into medicines and pharmacies (see, attached press release and Report). The Report does not analyse possibly anticompetitive behaviour of private firms but focuses on the market-distorting effects of the regulatory framework. As a result, the LCA makes several recommendations for regulatory change which the LCA believes will enhance competition, increase efficiencies, and reduce costs, while safeguarding public health and, when it comes to pharmacies, the public service component of that economic activity. The LCA advocates for: • abolishing regulated maximum prices of over-the-counter (OTC) medicines; • diversifying the importation of medicines, including OTC products, by reducing the reliance on medicines sourced in Belgium and turning more to France; • enhancing generic competition by (i) creating more categories of substitutable medicines; (ii) encouraging the identification of medicines on prescriptions by their international non-proprietary name; (iii) offering financial incentives to prescribers and pharmacists for dealing in generics; and (iv) promoting generic medicines; • reducing (or mitigating the effects of) medicine shortages by (i) enhancing generic competition; (ii) organising public procurement procedures; (iii) creating a database for shortages; (iv) reducing territorial restrictions that result from diverging regulatory frameworks in the EU Member States; and (v) encouraging production increases by the supplying firms; • expanding the possibilities of the online sale of medicines by, for example, authorising the online commercialisation of prescription medicines; and • reforming the pharmacy business by (i) making the establishment of new pharmacies easier; (ii) opening the ownership of pharmacies to outside investors; (iii) authorising the sale of OTC medicines outside pharmacies; and (iv) giving pharmacies a larger role in healthcare tasks such as vaccinations.

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    • 16/06/2022
    • Newsletters

    VBB on Belgian Business Law, Volume 2022, No. 05

    The May 2022 issue of our Belgian Business Law newsletter reporting on the latest developments in a range of areas, including competition, data protection, intellectual property and labour law.

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    • 08/06/2022
    • Articles

    French Supreme Court rejects appeal and upholds competition law decision against Janssen Cilag for strategies against entry of generic competitors

    On 1 June 2022, the French Supreme Court (Cour de cassation) upheld the judgment of the Paris Court of Appeal, which in turn largely upheld the 2017 decision of the French Competition Authority (FCA) to impose fines of EUR 25 million on Janssen Cilag and its parent company Johnson & Johnson (Janssen Cilag) for abusing its dominant position (see judgment here (in French)). Specifically, the FCA sanctioned the parties for abusive conduct intended to hinder competition from generic versions of Janssen Cilag’s Durogesic® products (see Van Bael & Bellis Life Sciences Insights and News Alert of 26 December 2017). In the earlier appeal, the Paris Court of Appeal reduced the amount of the fine to EUR 21 million because the FCA made an erroneous interpretation of Janssen Cilag’s intervention with the French Health Authority (AFSSAPS) but upheld the rest of the decision. Janssen Cilag filed a further appeal, challenging the Paris Court of Appeal’s judgment. One of Janssen Cilag’s arguments was that, at the time of the infringement, the existing case law was not sufficiently clear that intervention before a health authority concerning a generic competitor would constitute an abuse of a dominant position. For example, Janssen argued that, based on the Commission's AstraZeneca decision, the mere fact that a pharmaceutical company submits a request or claim to an administrative authority that is fully competent to assess the merits of the claim and thus exercise independent control, under conditions that do not involve any provision of misleading factual information, could not be considered to have an anti-competitive effect. The Court dismissed this argument explaining that the prohibition of the practices was reasonably foreseeable for a company such as Janssen Cilag. It also upheld the Paris Court’s judgment that the novelty of an anti-competitive practice, the various possible forms of which, given their variety and complexity, are not exhaustively listed either in European Union law or in domestic law, does not prevent it from being sanctioned. Janssen Cilag also claimed that the FCA lacked jurisdiction to assess its intervention before the French Health Authority. Again, this argument was rejected by the French Supreme Court, recalling the Hoffmann-La Roche case which addressed the respective competences of health and competition authorities. In line with this case law, the Paris Court concluded that it is allowable for a competition authority to assess the legal framework in which a competition law infringement occurs. The French Supreme Court agreed and confirmed that the Paris Court of Appeal had not disregarded the powers of French Health Authority, nor the separation of powers, nor the case law of the European Court of Justice on the respective competences of health and competition authorities. The French Supreme Court also rejected arguments that the FCA had committed errors of law as to the assessment of the regulatory framework in which the interventions with the French Health Authority occurred.

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    • 01/06/2022
    • Articles

    Italian Competition Authority Imposes Fine on Leadiant for Excessive Pricing

    On 31 May 2022, the Italian Competition Authority (Autorita’ Garante della Concorrenza e del Mercato, AGCM) imposed a fine of EUR 3.5 million on the pharmaceutical company Leadiant for abusing its dominant position by charging excessive prices for chenodeoxycholic acid Leadiant (CDCA) (see, attached press release (in English) and decision (in Italian)). CDCA is an orphan medicine indicated for the treatment of patients afflicted with cerebrotendinous xanthomatosis, a rare metabolic disorder which can lead to early death (CTX). According to AGCM, Leadiant charged excessive prices for CDCA to the Italian National Health Service through a complex strategy, comprising a range of illegal steps. Notably, Leadiant allegedly delayed and obstructed the price negotiations for the product with the Italian Medicines Agency (Agenzia Italiana del Farmaco, AIFA), for instance by delaying the supply of information requested by AIFA. In the AGCM’s view, such behaviour further weakened the negotiating power of AIFA, which was already weak in view of the life-saving nature of the medicine. Leadiant also artificially differentiated CDCA from Xenbilox®, a cheaper Leadiant medicine with the same active substance as CDCA which was used off-label to treat CTX, with a view to preventing AIFA from gathering information regarding Xenbilox® and achieving a higher price for CDCA. Leadiant considered the information regarding Xenbilox® to be irrelevant because it was not marketed in Italy and, regardless of its off-label use, was indicated for a different use (to dissolve cholesterol gallstones). Regarding the level of the prices, AGCM ascertained that the price was both excessive and unfair. Based on a comparison between the product’s price and cost, AGCM concluded that the former was highly disproportionate with the latter. AGCM also concluded that the higher price was unfair in view of (i) the nature of the medicine, which is based on a molecule which had been present on the market for a long time, (ii) the limited extent of the R&D activities conducted by Leadiant, and (iii) the absence of therapeutic added value compared to previous medicines (including Xenbilox®). It thus concluded that CDCA’s price was an abuse in breach of Article 102 TFEU. AGCM also found that the purchasing of the medicine at an excessive price caused direct economic harm to the Italian National Health Service which has limited financial resources. This was the case notwithstanding the low turnover relating to the product at stake. Furthermore, AGCM disregarded the fact that Leadiant had committed to reimburse the difference between the provisional price charged pending the price negotiations and the finally agreed price as this constitutes normal business conduct and does not prove the absence of intention to cause harm. For the purposes of calculating the fine, AGCM considered that the violation was very serious in view of the life-saving nature of the product. Accordingly, the basic amount of the fine was set at 20-25% of Leadiant’s turnover for CDCA in 2021 (the regulatory ceiling being 30%) and was further increased by an additional 20-25% for the so-called ‘entry fee’ (i.e., the value added to the basic amount of the fine to ensure its effective deterrence in case of the most serious offences). AGCM’s fining decision marks the end of its investigation which started in 2019 (see, Van Bael & Bellis Life Sciences Insights and News Alert of 16 October 2019) and which was later extended in view of the complexity of the case (see, Van Bael & Bellis Life Sciences Insights and News Alert of 3 November 2020). Similar conduct by Leadiant is currently being investigated in other Member States, including Belgium (see, Van Bael & Bellis Life Sciences Insights and News Alert of 9 April 2019) and Spain (see, Van Bael & Bellis Life Sciences Insights and News Alert of 22 December 2020). The Dutch competition authority has already issued an excessive pricing decision against Leadiant and imposed a fine of almost EUR 20 million (see, Van Bael & Bellis Life Sciences Insights and News Alert of 20 July 2021), although this decision remains subject to an administrative appeal.

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    • 24/05/2022
    • Articles

    Belgium - Entry into Force of New Law Governing Veterinary Medicinal Products

    The Law of 5 May 2022 regarding veterinary medicinal products (the Law - see, attachment) entered into force on 21 May 2022, subject to limited exceptions in relation to the identification code on the immediate and outer packagings. The Law both complements and implements Regulation (EU) 2019/6 on veterinary medicinal products which started to apply on 28 January 2022 (see, Van Bael & Bellis Life Sciences News and Insights of 10 January 2019; see also, Van Bael & Bellis Life Sciences News and Insights of 10 September 2021). The Law regulates a set of important issues, including clinical trials with veterinary medicinal products; product requirements such as packaging, labelling, and summary of product characteristics (SmPC); marketing authorisations; post marketing authorisation measures, including the requirement to collect data regarding the sales volumes and use of antimicrobial medicines; pharmacovigilance; the manufacturing, preparation, importation and exportation of veterinary medicinal products; wholesale and retail trade, including sales at a distance; parallel trade; veterinary medicinal products prepared in a pharmacy in accordance with a magistral or an officinal formula; inspection, supervision and criminal penalties; and administrative settlements. As a result of the Law, the Law of 25 March 1964 governing medicines will no longer apply to veterinary medicinal products and is for that reason made subject to a lot of modifications. The stated objective of the Law was to create two distinct sets of rules and to have veterinary products covered exclusively by the Law and its implementing Royal Decrees. However, the Law of 28 August 1991 regarding the exercising of the veterinary profession (the Veterinary Profession Law or VP Law) continues to apply and contains several rules that affect veterinary medicines. Additionally, the Law does not address a range of topics for which a separate set of rules was considered to be necessary, while there was no time left to complete the legislative process for that set (as noted, Regulation (EU) 2019/6 has already become applicable on 28 January 2022). This is why a separate statute, currently scheduled to be submitted as a bill to the federal Parliament in the fall of 2022, will regulate the following matters: " Additional indications on the SmPC of homeopathic veterinary medicines; " Additional obligations for wholesalers engaging in the parallel trade of veterinary medicines for reasons of public or animal health; " Authorisations for making preparations; " Substantive requirements for prescriptions; " Processing of personal data contained in inspection files; " Advertising for veterinary medicines; " Rights and obligations of veterinarians with regard to veterinary medicines (Articles 9 to 12 of the VP Law) - It is unclear whether the future law will also tackle Article 17, VP Law which covers pricing issues as well as benefits and reductions given for the benefit of veterinarians.

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    • 16/05/2022
    • Articles

    Belgium - In Enforcement Priority Note for 2022, Pharmaceutical Industry is Again Target of Belgian Competition Authority

    The Belgian Competition Authority (BCA) has just published its enforcement priority note for 2022 (see, attachments). In keeping with its list of priorities in previous years and in tandem with the approach taken by fellow competition authorities, including the Dutch "Autoriteit Consument & Markt", the BCA will continue to have the pharmaceutical industry in the crosshairs and makes it clear that its vigilance and efforts apply to the entire value chain. As if to remind stakeholders that it means business, the BCA refers to recent enforcement action against pharmaceutical wholesalers (see, Van Bael & Bellis Life Sciences News and Insights of 18 February 2022). While this “hybrid” settlement case resulted in a fine of EUR 29.8 million for pharmaceutical wholesaler Pharma Belgium-Belmedis, the BCA continues to pursue proceedings against another wholesaler, CERP, which refused to settle. The BCA is also understood to handle cases involving excessive pricing and access to the hospital market. Of broader interest than the pharmaceutical industry is the BCA’s announcement that its budget will benefit from an increase of EUR 1.4 million (20%). The additional funds are earmarked for staff expansion, IT, knowledge management, and enforcement tools such as e-discovery and whistle blowers.

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