The Netherlands - Leadiant Sees Excessive Pricing Decision Largely Confirmed By Rotterdam Court
- 18/02/2025
- News
On 13 February 2025, the Court of First Instance of Rotterdam (Rechtbank Rotterdam – the Court) largely confirmed the decision of the Dutch competition authority (Autoriteit Consument & Markt - ACM) of 22 June 2023 to impose a fine for excessive pricing on Leadiant (see, attached judgment I and see, Van Bael & Bellis Life Sciences News & Insights, 12 July 2023). It reduced the fine (which ACM had already reduced a first time – ACM first adopted a decision on 1 July 2021) and did so by a token EUR 15,000 to arrive at EUR 17,029,000 on account of the duration of the proceedings.
ACM had found Leadiant guilty of an abuse of dominant position in the form of an excessive price charged for chenodeoxycholic acid (CDCA) Leadiant, a medicine indicated for the treatment of patients afflicted with cerebrotendinous xanthomatosis, a rare metabolic disorder. In siding with ACM, the Court held that ACM correctly applied the United Brands test for assessing prices charged by dominant firms.
First, ACM had established, based on an elaborate price-cost test, that Leadiant’s price was excessive. According to the Court, in applying this test, ACM stayed within the limits of its discretionary powers in making the requisite economic analysis of the relevant costs. The Court concluded that ACM had calculated the acceptable profitability of the medicine in a careful fashion. Second, ACM had also reached the conclusion that Leadiant’s price was unfair. The Court maintained that ACM had carefully assessed the genuine but modest merits of the new registration of the medicine and its supposedly innovative character. It added that the active substance of Leadiant’s medicine had been in use for decades and that Leadiant’s efforts had been minimal and largely of an administrative nature. In a damning conclusion, the Court observed that Leadiant’s conduct amounted to a textbook model of abuse of dominant position. According to the Court, Leadiant’s conduct was even more disturbing because the firm had taken advantage of a group of vulnerable patients who were dependent on the medication.
Leadiant still has the possibility to appeal this judgment to the Trade and Industry Appeals College (College van Beroep voor het bedrijfsleven).
On the same day, the Court also delivered a judgment in a second case pitting Leadiant against ACM (see, attached judgment II). Leadiant had filed a complaint with ACM against 12 heatlhcare insurance companies because these parties had allegedly colluded to boycott Leadiant’s medication and pay only for a magisterial preparation made by the medical centre of Amsterdam University. ACM rejected the complaint because the allegations supposedly did not fit its list of priority matters for enforcement. However, the Court held that ACM had failed to offer a proper justification for its decision not to handle the complaint and therefore ordered ACM to take a new look at Leadiant’s complaint.
