The new judgment, which the CAT itself qualifies as “long and complex” (§ 14), only disposed of the abusive pricing part of the Decision, while a second judgment will deal with appeals in relation to the Decision’s market sharing findings.
 
While the CAT went to great lenghts to determine that the hydrocortisone suppliers were dominant, it took a path different from that followed by the CMA to reach that conclusion. For example, to define the relevant market, it first identified two focal products and then applied the “Small but Significant Non-transitory Increase in Price” (“SSNIP”) test to probe for possible substitutes which, along with the focal products, would make up the relevant product market. The test assumed a 10% price increase of the focal product priced at £10/unit, payable at about three-weekly intervals or about £17/year. The test considered the effect of this price increase on a hypothetical consumer synthesised “out of the salient characteristics of doctor, pharmacy and patient” (§ 243, point (6)). Similarly, to establish dominance, the CAT took account of the succession of owners of the relevant marketing authorisation and also considered the unusual price evolution of the focal product which exhibited “a mountain of ascending prices, reaching a peak, with then, on the other side of the peak, a decline in price resulting in reversion to “low prices”” (§ 152, point (3), (ii)). Both the parties and the CAT agreed that this price evolution evoked the image of the Matterhorn mountain and caused the CAT to “parse the Matterhorn” to attribute responsibility to the various suppliers and ascertain dominance over time.

 

In applying once more the pricing test developed by the Court of Justice of the European Union in United Brands, the CAT found that the hydrocortisone suppliers had applied abusive prices that were both excessive and unfair. It dismissed the grounds of appeal which contended that (i) the CMA failed to consider the prices of comparable products; (ii) the CMA did not properly assess the economic value of the focal products; and (iii) the CMA failed to consider that the prices had ceased to be abusive on the downward slopes of the “Matterhorn”.
 
As it did in its liothyronine tablets judgment of August 2023, the CAT also rejected the notion of countervailing buyer power that constrained prices during the infringement period. It pointed out that “by reason of a cumbersome, ineffectual and unused scheme of regulation” there was no more than a “theoretical constraint on dominance that existed on paper only” (§ 273, point 3).