European Commission & UK CMA Address Disparagement
- 11/12/2024
- News
In parallel cases, the European Commission (the Commission) and the UK Competition and Markets Authority (CMA) have each recently released further details concerning when disparagement may violate the competition laws.
On 6 November 2024, the Commission published the non-confidential version of its decision accepting commitments offered to resolve allegations of disparagement (the Decision) (see, Van Bael & Bellis Life Sciences News and Insights of 22 July 2024). According to the published decision, Vifor, the incumbent supplier of an intravenous (IV) iron treatment, may have held a dominant market position and may have abused such dominance by implementing a disparagement campaign against a competing IV iron medicine (Monofer) marketed by Pharmacosmos.
On 10 December 2024, the CMA published a notice where it provisionally accepted Vifor's commitments to address similar concerns in the parallel UK investigation (see, Van Bael & Bellis Life Sciences News and Insights of 1 February 2024), and has published these commitments for comment by third parties (the Notice).
Preliminary findings of disparagement
While companies are generally allowed to advertise the qualities of their products, competition law issues may arise if activities go further to disparage a competing product by creating false perceptions about its material characteristics (e.g., safety and efficacy). In the pharmaceutical sector, relevant activities may include both promotional and medical communications, for example, promotional campaigns to healthcare providers (HCPs), eDetailers, sponsored studies and external seminars.
In its Decision, the Commission indicates that a company may abuse its dominant position when (i) it disseminates objectively misleading information capable of discrediting a competing product, (ii) the behaviour is capable of harming competition, and (iii) the behaviour cannot be objectively justified. The CMA outlines a similar legal standard in its Notice, although it did not specifically mention the possibility for conduct to be objectively justified.
Objectively misleading information capable of discrediting a competing product
This notion includes information that is inaccurate as well as information that, although technically correct, is presented in a manner that is capable of confusing and manipulating the addressees or likely to mislead those who receive it (e.g. because relevant information is omitted or exaggerated).
In the case at hand, both the Commission and the CMA challenged two lines of promotional messages.
- The first messages allegedly claimed that Monofer was a dextran (or dextran-derived), which is a substance linked to safety issues and is no longer marketed in Europe. According to the Commission and the CMA, these statements were inaccurate or incomplete because (i) Monofer is neither a dextran nor its derivate, and (ii) the statements contradicted the findings of regulatory authorities, courts, and the company’s own internal documents.
- The second line of message allegedly claimed that patients receiving Monofer had an increased risk of hypersensitivity reactions compared to the incumbent supplier’s product. The Commission and CMA claim that such messages had no basis in the regulatory approvals for the products. Further, the Commission alleges that the incumbent supplier was aware of the deficiencies in its statements. In the investigators’ view, the incumbent supplier selectively used the available studies while omitting others, and also relied on ad hoc studies (either sponsored by the company itself or co-authored by its employees) and external seminars.
In the Commission and CMA’s preliminary view, such messages were misleading and capable of confusing HCPs and discrediting Monofer.
Capability to produce exclusionary effects
The Commission’s Decision indicates that pharmaceutical markets are particularly vulnerable to disparagement practices. According to the Commission, doctors and other HCPs are generally conservative and are more likely to be affected by misleading statements regarding the safety or efficacy of medicines. This finding is echoed by the CMA in its Notice. In this context, a systematic communication campaign addressed to HCPs is more likely to be capable of adversely affecting the uptake of the disparaged medicine, particularly when such a campaign is implemented by a dominant company with a strong reputation and established local market presence and relationships with HCPs.
In the case at hand, the Commission alleges that the incumbent supplier’s communications were capable of harming competition because (i) they targeted key drivers of the demand for high-dose IV irons, including doctors and other parties that may influence the administration, dispensing or procurement of medicines, (ii) the addressees of the communications were likely to be affected by the allegedly misleading messages about the safety of the only alternative medicine, (iii) the incumbent supplier enjoyed a special position in its communications with HCPs due to established relationships and trust and unrivalled direct local presence, and (iv) the messages were disseminated via a centrally organised campaign and via numerous means (including through funded studies). In the Notice, the CMA reaches a similar preliminary conclusion and added that it is also concerned that the conduct could have a financial impact on the national health system since Monofer was less expensive.
Lack of objective justifications
The Commission also examined whether the conduct could be objectively justified, but considered that the messaging was not seeking to raise awareness of the therapeutic and clinical characteristics of the incumbent supplier’s own product and also did not seek to pursue a genuine and evidence-based public health objective.
Commitments in the EU and the UK
The Commission preliminarily concluded that the messages could constitute an abuse, but did not formally make an adverse finding. Instead, the Commission accepted commitments submitted by the incumbent supplier seeking to address the concern, including (i) the launch of a communication campaign to rectify the effects of its potentially misleading prior messages and (ii) a commitment to not engage in external promotional and medical communications for the next 10 years concerning Monofer’s safety profile (subject to limited exceptions).
As regards the UK, the commitments presented in the Notice are aligned with those already accepted by the Commission. In addition, the incumbent supplier has offered to make a payment of £23 million to healthcare systems in the UK, to address concerns that the statements could have an adverse financial impact on the national health system.
Key takeaways
The Decision is the first time that the Commission has analysed disparagement conduct (previous cases were dealt with by the Court of Justice in preliminary rulings concerning the Italian Avastin/Lucentis saga, or by national authorities, notably in France). Similarly, once the UK investigation is concluded, it will be the first CMA decision about this type of behaviour.
While a more detailed analysis of disparagement practices can be expected at EU level when the non-confidential version of the Teva decision is released (see, Van Bael & Bellis Life Sciences News and Insights of 31 October 2024 and VBB on Competition Law, Volume 2024, No. 10), companies active in the pharmaceutical sector should already be very careful in all promotional and medical communications, especially activities targeting HCPs. Risks will be higher if statements by dominant companies concerning competing products are inaccurate from a factual perspective, unsupported by scientific evidence, drafted in an unbalanced manner, and/or omit relevant information, particularly where the statements contradict the findings of regulatory authorities, concern crucial topics about the medicine (such as safety and efficacy), and are part of a systematic campaign by a player enjoying a strong reputation.
