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Portolano Cavallo concentra la propria attività nel settore TMT sin dalla sua nascita nel 2001 ed è ora riconosciuto come lo studio legale italiano leader in questo settore.
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Portolano Cavallo è stato fondato nel 2001 dai soci Manuela Cavallo e Francesco Portolano. L’attività dello studio si concentra soprattutto su M&A e sul settore Media, sotto ogni aspetto.
Ita / Eng
mag 17


Reproduced with permission from Law Business Research Ltd. Getting the Deal Through: Pharmaceutical Antitrust 2017, (published in April 2017; contributing editors: Marta Giner Asins and Yann Anselin, Norton Rose Fulbright LLP). For further information please visit


1. Which legislation sets out the regulatory framework for the marketing, authorisation and pricing of pharmaceutical products, including generic drugs? Which bodies are entrusted with enforcing these rules?

The regulatory framework governing the manufacturing and marketing of pharmaceutical products in Italy is set out by Legislative Decree No. 219/2006 (the Code of Pharmaceuticals), which implemented Directive 2001/83/EC.

The Code of Pharmaceuticals governs, inter alia, the national, decentralised and mutual recognition procedures for the issuance of marketing authorisation (while the centralised procedure is directly governed by Regulation (EC) No. 726/2004); the procedure and conditions for the issuance of manufacturing authorisation; and the conditions for advertising of pharmaceuticals, pharmacovigilance requirements, etc.

Matters on pricing and reimbursement of pharmaceuticals fall entirely under the competence of member states, which set out their own rules autonomously from EU institutions or bodies.

In Italy, once a drug is authorised for marketing, it must be classified by the Italian Medicines Agency (AIFA), which is the national regulatory authority, under a specific category for purposes of reimbursement by the National Health Service (NHS): drugs in Classes A and H are reimbursed by the NHS; whilst Class C drugs are not. Further, for a drug to be reimbursed by the NHS, its price will have to be set through mandatory negotiations between the marketing authorisation’s holder (MAH) and AIFA, as provided for by Law No. 326/2003 and according to the economic criteria set out in CIPE’s Resolution of 1 February 2001 (CIPE Resolution). It is AIFA’s exclusive responsibility whether to include a drug under a refundable class and, in that case, what its price should be. For generic pharmaceuticals to be classified under the same class of their corresponding originators, their price must be set at least 20 per cent lower than the originators’ price. Notably, MAHs of drugs reimbursed by the NHS may have to ‘pay-back’ significant amounts to the NHS if certain budget thresholds both public and related to each MAH – established yearly – are exceeded.

If a drug is not reimbursable by the NHS (ie, it is Class C), the MAH is free to set the price at its own discretion (though certain statutory limitations on price increases still apply).

More recently, Law Decree No. 158/2012 has introduced a new class named Class C-not negotiated (C- nn), where new drugs are automatically included as soon as they are authorised. In this way, they can be placed on the market as non-reimbursed drugs pending the AIFA’s decision on reimbursement and prices. A fast-track procedure is available for certain innovative and orphan drugs. Pursuant to Law No. 648/1996, a drug that is not authorised in Italy may, nonetheless, be provided to patients, and be fully reimbursed by the NHS, if:

  • there is no valid, authorised therapeutic alternative; or
  • (if a valid, authorised therapeutic alternative does exist) the drug is intended to be used ‘off-label’ (ie, for a therapeutic indication other than that it was authorised for), on the condition that the off-label therapeutic indication is known and consistent with national and international medical research, and that the off-label marketing of the drug is ‘appropriate’ and economically viable.

The AIFA assesses whether such conditions are satisfied and, if its opinion is favourable, the drug is included in a specific list and can thereafter be supplied to patients.

It is AIFA’s responsibility to enforce the rules described above. This includes, inter alia: granting authorisations to manufacture and trade pharmaceuticals and to conduct clinical trials; monitoring pharmacovigilance activities; supervising the advertising of pharmaceuticals; and ensuring compliance with the restrictions applicable to the public expenditure for pharmaceuticals, etc. AIFA’s decisions can be challenged, in the first instance, before the Regional Administrative Court of Lazio and, on appeal, before the Council of State.

2. Is there specific legislation on the distribution of pharmaceutical products?

Yes – the distribution chain of pharmaceuticals sold to patients in Italy includes wholesalers, depositaries and pharmacies. Wholesalers and depositaries must be authorised by the competent Italian regional government pursuant to, respectively, articles 100 and 108 of the Code of Pharmaceuticals.

The main difference between wholesalers and depositaries is that the former directly purchase drugs from MAHs with the purpose of selling them to pharmacies, while the latter merely store and keep drugs in custody, pursuant to deposit agreements with the MAH. Consequently, only wholesalers are responsible for complying with the public service obligation provided for by article 105 of the Code of Pharmaceuticals, pursuant to which wholesalers have a duty to ensure availability of a wide range of pharmaceuticals (namely, 90 per cent of the authorized drugs that are reimbursed by the NHS) so as to ensure prompt supply (within 12 hours of the request) to pharmacies located in a given area.

Brokers cannot be characterised as either wholesalers or depositories, since they do not materially possess the pharmaceuticals. In fact, they do not need authorisation. In Italy, the opening of a pharmacy (ie, a store for the sale of all categories of pharmaceuticals) is subject to authorisation from the local health authority on condition that a number of requirements – set out by Law No. 362/1991 and implementing regulations – are fulfilled, in particular:

  • the number of pharmacies cannot exceed a ratio of one to every 3,300 citizens in each given area;
  • a pharmacy can only be owned by either pharmacists or natural entities, partnerships or limited liability cooperatives made by pharmacists; and
  • no person or entity can manage more than four pharmacies within the province where it has its registered office. Other requirements pertain to the organisation, the internal architectural structure and the availability of certain appliances or technologies within the store.

In Italy, ‘para-pharmacies’ (ie, stores that are not authorised as pharmacies) are only allowed to sell non-prescription drugs (Law Decree No. 223/2006). They are also subject to the fulfilment of the structural, organisational and technological requirements provided for by a Ministerial Decree of 8 March 2012.

Wholesalers and pharmacies are entitled to a mark-up on drugs reimbursed by the NHS. The amount is set out by law as a percentage of the final price to consumers. They are also subject to payback obligations if the public expenditure for the purchase of pharmaceuticals exceeds certain regional and national thresholds. A review of the remuneration system for wholesalers and pharmacists is expected by 1 January 2018.

Hospitals and other healthcare organisations purchase pharmaceuticals through the public tender procedures, according to the Public Procurement Code (Legislative Decree No. 50/2016).

3. Which aspects of this legislation are most directly relevant to the application of competition law to the pharmaceutical sector?

Please see the following list:

  • the rules concerning the off-label use of pharmaceuticals (see question 1), which state that AIFA can create a list of drugs whose offlabel or unlicensed use is, nonetheless, reimbursable by the Italian NHS under certain circumstances (Law No. 648/1996 as amended by Law Decree No. 36/2014, issued following the Avastin/Lucentis case. See question 20);
  • the rules concerning the marketing of generic drugs, under two perspectives:
    • data exclusivity and market exclusivity: pursuant to article 10 of the Code of Pharmaceuticals, whoever wants to get the authorisation to market a generic drug:
      • cannot refer to the results of the preclinical and clinical trials already filed by the corresponding originator (and instead simply file the bio-equivalence study) unless eight years have elapsed from the date the originator was authorised; and
  • cannot, in any case, put the generic on the market until 10 years (or 11 under certain conditions) from the same date;
  • the rules governing the matters of pricing and reimbursement of pharmaceuticals, which involve mandatory negotiations with AIFA (see questions 1 and 28 ); and
  • the rules disciplining the opening and operations of pharmacies and para-pharmacies (see question 2), which have been subject to continuous debate in Italy as to their indispensability and proportionality.



4. Which legislation sets out competition law?

Competition law in Italy is set forth in Law No. 287 of 10 October 1990 (Law 287/90), which provides for the Italian equivalent of articles 101 and 102 TFEU as well as national merger control rules.

Law 287/90 applies horizontally to all business sectors: there are no specific competition rules or exceptions applicable to the pharmaceutical sector. However, as mentioned above, sector regulation may affect or influence the interpretation and application of certain competition rules with respect to the pharmaceutical industry.

5. Which authorities investigate and decide on pharmaceutical mergers and the anticompetitive nature of conduct or agreements in the pharmaceutical sector?

The Italian Competition Authority (ICA) is responsible for investigating and monitoring compliance with general competition law across all sectors (including pharmaceutical). Anticompetitive agreements, abuse of dominance and domestic merger control fall under the ICA’s jurisdiction. Neither AIFA nor other sector authorities have any overlapping competences in that regard.

Further, since 2012, the ICA has been assigned new advocacy powers, which, ultimately, entitle it to directly challenge before administrative courts public regulatory measures that may restrict competition and free circulation of services disproportionately, or in a way that is contrary to competition law and principles (article 21-bis of Law 287/90). In case AS1257 the ICA challenged certain of AIFA’s regulatory measures concerning reimbursement of certain drugs for hepatitis C and, as a result, AIFA amended and substituted the previous resolution contested by the ICA.

6. What remedies can competition authorities impose for anticompetitive conduct or agreements by pharmaceutical companies?

After a thorough investigation into whether certain conducts or agreements infringe competition law, the ICA can order that the anticompetitive conduct or agreements cease, as well as impose fines of up to 10 per cent of the company’s turnover (article 15 of Law 287/90).

Failure to comply with the cease-and-desist order referred to above would trigger fines of at least twice the original amount (though the fines would be capped at 10 per cent of the company’s turnover) and, ultimately, lead to the compulsory suspension of the company’s activities for a maximum of 30 days.

The ICA may also impose urgent interim measures if certain conduct, which at first glance is likely to constitute an infringement of competition law, is also likely to cause serious and irreparable harm to competition (article 14-bis of Law 287/90).

For example, at the outset of an investigation against an anticompetitive scheme between drug’s distributors (case I678 of 20 September 2007, Distribution of non-prescription drugs to para-pharmacies), the ICA ordered the distributors to provisionally stop rejecting requests to supply non-prescription drugs to para-pharmacies, pending the investigation. Also, in a proceeding for abuse of dominance (case A364 of 21 March 2007, Merck-Active ingredients) the ICA provisionally required Merck to license certain active ingredients to a competitor for a certain use (though the investigation ended with a commitment decision).

Within three months of opening an investigation, the investigated parties may propose commitments to remove the concerns for competition raised by the ICA. If accepted by the ICA, the commitments will be made binding by a decision that will neither impose a fine nor ascertain any infringement. However, if the ICA were to characterise the alleged infringement as serious, it would be precluded by law from accepting any commitments and would have to proceed with imposing a fine (article 14-ter of Law 287/90).

7. Can private parties obtain competition-related remedies if they suffer harm from anticompetitive conduct or agreements by pharmaceutical companies? What form would such remedies typically take and how can they be obtained?

Private parties harmed by anticompetitive conducts may take two routes:

  • they may file a complaint with the ICA substantiating the alleged infringement and requesting the ICA to initiate a public investigation to bring the infringement to an end, possibly by means of urgent interim measures (article 12.1 of Law 287/90); or
  • they may claim restoration of the harm suffered because of the infringement before national courts. To this end, damages claimants can now take advantage of the new prerogatives and facilitations set out in Legislative Decree No. 3/2017, which implements the Antitrust Damages Directive (2014/104/EU) in Italy.

The ICA’s proceedings mentioned above (see question 6) were prompted by private complainants and associations of affected traders and consumers. Also, recently the implementation of the Antitrust Damages Directive has prompted private damages actions by the NHS against competition law infringers to receive compensation for the excessive charges paid by taxpayers.

8. May the antitrust authority conduct sector-wide inquiries? If so, have such inquiries ever been conducted into the pharmaceutical sector and, if so, what was the main outcome?

Yes – the ICA has the power to conduct industry-wide inquiries in every sector (including pharmaceutical) to identify possible competition concerns.

The first ICA’s industry-wide inquiry into the pharmaceutical sector was in November 1997 (IC14 – Pharmaceutical Sector). It focused on certain regulatory and legislative restrictions that were deemed disproportionate or inadequate to attain the underlying public goals and instead stifled competition along the supply chain.

The second ICA’s inquiry into the pharmaceutical sector was closed in May 2016 (IC50 – Market for Human Vaccines). It was launched to assess whether the market for human vaccines, particularly those mandatory or highly recommended pursuant to public policies, required antitrust intervention.

The outcome of the latter inquiry was that the market for the manufacture of said vaccines is oligopolistic: the four largest players are private multinationals that hold 80 per cent of the overall relevant market. Further, the ICA identified several information asymmetries between manufacturers and buyers (either the NHS or private buyers) with respect to the cost structure of the vaccines, their substitutability (ie, depending on the specific type of pathology addressed thereby), the prices negotiated with each buying entity and, more generally, the data required to assess the viability and necessity of vaccines. The ICA found that such information asymmetries incentivise certain manufacturers’ patent management and product-offering strategies that maximize inefficient product differentiation and price discrimination (or tiered pricing). These features, coupled with a lack of adequate regulation on issues such as the classification of vaccines, the entry of generics and the mandatory negotiation of prices with the AIFA, reduce competition and increase prices in the Italian pharmaceutical market.

To address such concerns, the ICA suggested, among other things, a regulatory intervention at either national or supranational (EU) level aimed at filling the information asymmetries and so reducing the vaccine manufacturers’ exploitation of their market power. In particular, the ICA recommends the introduction of mandatory negotiation of prices with AIFA for essential human vaccines (which are not subject to such a procedure at present) and to increase transparency in the technical assessment of the vaccines’ necessity and on the entry of generics.

9. To what extent do non-government groups play a role in the application of competition rules to the pharmaceutical sector?

NGOs, as well as trade associations or consumer groups, play an important role as they are entitled to file complaints with the ICA to signal possible competition law infringements. They can also request to intervene in ongoing proceedings, if they prove to have a qualified interest. Further, all such groups or associations may go to national courts to claim damages; request that anticompetitive agreements be declared null and void; and request urgent interim measures. To this end, consumer groups may also bring class actions to courts.



10. Are the sector-specific features of the pharmaceutical industry taken into account when mergers between two pharmaceutical companies are being reviewed?

There are no sector-specific merger control rules applicable to mergers between pharmaceutical companies.

Nonetheless, the ICA duly takes into account specific features of the pharmaceutical industry when assessing concentrations between undertakings in that sector. In particular, sector regulation on the manufacturing, marketing and distribution of pharmaceuticals affects the assessment of whether the parties are actual or potential competitors on the Italian market. For instance, having (or having applied for) authorisation to sell certain drugs in Italy may be enough for the ICA to conclude that the parties’ activities overlap on national markets. Similarly, the ICA will assess whether a manufacturer has entered advanced clinical trial stages (eg, phase 2 or 3) to assess potential competition issues. Furthermore, the ICA may look into how a concentration may negatively affect the availability in Italy of a sufficient variety of products to meet domestic demand.

11. How are product and geographic markets typically defined in the pharmaceutical sector?

The way the ICA has defined product and geographic markets in the pharmaceutical sector is consistent with the consolidated case law of the European Commission (Commission).

Product market

The ICA looks at the anatomical therapeutic classification (ATC) of the drug to assess the therapeutic usage. Normally, drugs classified under the same group at the narrowest ATC level (ie, usually at ATC4, though sometimes also at ATC3) are deemed to be substitutable and thus belong to the same relevant product market. Drugs classified under the same group at upper ATC levels (eg, ATC1, 2 or 3) may not be deemed sufficiently substitutable and, therefore, do not necessarily belong to the same relevant product markets (see, eg, case C8880 of 15 November 2007, Amgen/Dompé Biotec). However, certain products (eg, cosmetics, or multipurpose drugs) may, nonetheless, be included in the same product market despite being classified under different groups at ATC4. That may depend, variably, on specific features of the supply and demand structures. For instance, in case C11488 of 22 February 2012 (Lauro Quarantotto/Euticals), when dealing with cosmetics and nutrition products the ICA identified the product market without resorting to ATC classification.



The ICA has constantly defined the markets for manufacturing and commercialisation of pharmaceuticals as national in scope on the grounds that there still exist significant differences between national policies and regulations on, for example, prices, reimbursement terms, drugs classification, distribution channels and market-access regimes between EU member states. However, when dealing with certain types of products that serve more general needs (eg, cosmetics), the ICA has defined the geographic market as supranational in scope (or at least EEA-wide) in consideration of the significant cross-border commerce enumerated for such products, the absence of significant administrative or technical barriers, homogeneity of pricing and reduced incidence of transports costs (case C11876 of 16 January 2013, SEPPIC/ Biotechmarine). Further, the market for future products (ie, in clinical trial phases 1 or 2) and for R&D in the pharmaceutical sector has been considered likely worldwide (or at least EU-wide) by the ICA (see, among others, case C10665 of 21 July 2010, Aptuit/GlaxoSmithKline and C8880). On the contrary, the ICA has defined the distribution markets of pharmaceuticals as of sub-national dimension in regard to the homogeneity of demand and supply features at regional level (Case C11954 of 7 August 2014, Cooperativa Esercenti Farmacia/CO.FA.PI).

12. Is it possible to invoke before the authorities the strengthening of the local or regional research and development activities or efficiency-based arguments to address antitrust concerns?

Consistently with EU merger case law and applicable guidelines, the ICA must assess potential efficiencies generated by a transaction that have been substantiated by the parties in the course of the proceedings.

In principle, the strengthening of R&D capabilities at national level might be critical to clear certain concentrations that would otherwise be deemed problematic for competition, provided that a similar outcome would be unlikely to be attained absent the concentration.

13. Under which circumstances will a horizontal merger of companies currently active in the same product and geographical market be considered problematic?

The ICA will follow the Commission’s guidelines on the assessment of horizontal mergers to this purpose. Hence, it will rarely open a Phase II investigation if the parties’ combined market share does not exceed 30 per cent; or if the increase in the parties’ market share as a result of the transaction is not appreciable (ie, less than 1 per cent).

14. When is an overlap with respect to products that are being developed likely to be problematic? How is potential competition assessed?

Conversely (see question 13), a concentration might be deemed problematic by the ICA if the parties’ combined market share exceeds 30 per cent (though competition concerns are more likely to arise when it is approaching 40 per cent).

Potential competition is assessed by evaluating the parties’ products in the clinical trial phase (normally only phases 2 or 3 are relevant, eg, Case C10539 of 22 April 2010, Eli Lilly/Boehringer Ingelheim International) or awaiting marketing authorisation. The overall R&D activities and pipeline of projects (even before the clinical trials stage) may also play a role in the overall assessment of potential competition.

15. Which remedies will typically be required to resolve any issues that have been identified?

The ICA follows the Commission’s guidelines and case law to assess mergers and identify adequate remedies. Hence, the ICA normally favours structural or quasi-structural remedies (eg, divestments, mandatory licensing or third-party access to production lines) over behavioural remedies (eg, commitments not to exceed certain pricing ranges or to raise barriers to competitors), which are rarely deemed sufficient by themselves.

16. Would the acquisition of one or more patents or licences be subject to merger reporting requirements? If so, when would that be the case?

Yes – consistently with the Commission’s Consolidated Jurisdictional Notice (section 24), the acquisition of patents, brands, or licences may constitute a concentration, as long as such assets constitute a business to which a market turnover is clearly attributable (see, eg, case C10539).



17. What is the general framework for assessing whether an agreement or practice can be considered anticompetitive?

The combined provision of articles 2 and 4 of Law 287/90 mirrors the content of article 101 TFEU. Also, pursuant to article 1.4 of the same law, the ICA must apply national competition law in conformity with EU law and principles. Hence, there is no material difference on how the ICA interprets and applies the relevant provisions.

18. To what extent are technology licensing agreements considered anticompetitive?

There is no specific national rule or case law concerning technology licensing agreements that may affect the direct application of the EU Technology Transfer Block Exemption Regulation (TTBER) and of the related Commission guidelines. No material difference is expected in the application or interpretation of the relevant rules and principles by the ICA or by national courts.

19. To what extent are co-promotion and co-marketing agreements considered anticompetitive?

The Code of Pharmaceuticals expressly provides that the MAH can enter into agreements with other pharmaceutical companies for the co-promotion or co-marketing of pharmaceuticals towards professional operators (article 119.5).

Nonetheless, the ICA assesses co-promotion and co-marketing agreements under the general principles and criteria laid down in the Commission’s guidelines on vertical or horizontal cooperation. In particular, a co-promotion or co-marketing agreement that has as its object or effect the coordination of the competitive behaviour of the parties, in a way that appreciably reduces competition on prices, quality or innovation, may be prohibited and sanctioned by the ICA.

For example, in case I770 of 4 June 2015 (Arca/Novartis-Italfarmaco) the ICA maintained that a co-marketing agreement that the parties: exchange sensitive information on their future commercial strategies and activities (particularly on the envisaged amount and frequency of orders); subject one party’s commercial and investment policies to the other party’s pervasive supervision; or impose on one party to achieve a minimum market share and to report it to the other party for monitoring purposes, may have the effect of restricting competition and must, therefore, be amended to make it more adequate and proportionate to attain legitimate business objectives (eg, stimulating investments, and allowing the licensor to efficiently plan and allocate resources to the contract products as well as to monitor compliance by the licensee with applicable laws and regulation).

However, in the same case (which was closed with commitments) the ICA stated that a non-competition clause between the parties could be justified by the need to prevent the licensee or distributor from freeriding on the licensor’s investments by directly distributing competing products. In general, a degree of reduction of competition between the parties of similar agreements is deemed necessary and strictly related (ie, ancillary) to the legitimate objective of the agreement (see also cases C8880 and C10539).

Co-marketing or promotion agreements between originators and generics may also be carefully scrutinised by the ICA to assess whether they entail a pay-for-delay or reverse payment scheme in light of the Lundbeck case (COMP/AT39226).

20. What other forms of agreement with a competitor are likely to be an issue? Can these issues be resolved by appropriate confidentiality provisions?

The ICA is prone to pursue anticompetitive agreements in the sector, all the more where they occur in the context of supply of reimbursable drugs to the NHS or in relation with public tenders (I639 of 26 April 2006 – Disinfectants; I770 and case I792 of 21 December 2016 – tenders for oxygen and ventilation therapies). A contractual obligation to distribute products exclusively through certain channels may also be problematic in certain cases (eg, only through pharmacies for non-prescription drugs).

Further, the ICA seems amenable to sanction the exploitative misuse of regulation or patent disputes to justify restrictive agreements, settlements or concerted practices between pharmaceutical companies.

In case I760 of 27 February 2014 (Roche-Novartis/Farmaci Avastin and Lucentis) the ICA found that the parties infringed article 101 TFEU by entering into a licensing and co-distribution agreement for potentially competing drugs, which, allegedly, had been artificially differentiated based on a speculative interpretation of the regulation on the off-label use of drugs with a view to sharing monopolistic profits.

Confidentiality provisions or agreements are not always adequate or sufficient to remove competition concerns.

21. Which aspects of vertical agreements are most likely to raise antitrust concerns?

The ICA will investigate vertical agreements between pharmaceutical companies in accordance with the framework set out by the Commission’s Vertical Block Exemption Regulation and the related guidelines and case law. However, it is worth mentioning that the ICA has proved more prone to investigate vertical agreements in the pharmaceutical sector than in other industrial sectors, where such agreements have been rarely scrutinised. See questions 19 and 20.

22. To what extent can the settlement of a patent dispute expose the parties concerned to liability for an antitrust violation?

That requires a case-by-case analysis. The ICA will assess agreements to settle patent disputes between pharmaceutical companies in conformity with the framework set out by the TTBER and the related Commission’s guidelines and case law. The final report of 8 July 2009 of the Commission’s sector enquiry in the pharmaceutical sector as well as the Lundbeck case (as reviewed by the CJEU) set the standard for the ICA’s approach to, and evaluation of, such settlement agreements under article 101 TFEU.

23. Are anticompetitive exchanges of information more likely to occur in the pharmaceutical sector given the increased transparency imposed by measures such as disclosure of relationships with HCPs, clinical trials, etc?

The most recent sector inquiry of the ICA on human vaccines identified several information asymmetries between manufacturers and buyers (either the NHS or private buyers), which are deemed problematic for competition in the relevant market. Lack of transparency, rather than too much transparency, was seen as problematic with respect to, inter alia, the prices and data required to assess the viability and essentiality of certain vaccines compared to others (see question 8). However, this concern may not apply to all pharmaceutical markets.



24. In what circumstances is conduct considered to be anticompetitive if carried out by a firm with monopoly or market power?

In Italy, the prohibition to abuse of a dominant position is set forth in article 3 of Law 287/90, which reflects the content of article 102 TFEU. There is no reportable difference on how the ICA (or the national courts) and the Commission (or the EU courts) interpret and apply the substantive provisions on abuse of dominance in the sector.

25. When is a party likely to be considered dominant or jointly dominant?

Similarly, to this end the ICA, as well as the national courts, make use of the criteria set out in the Commission’s Guidance on abusive exclusionary conduct by dominant undertakings and in the CJEU’s case law. There are no reportable divergences in the pharmaceutical sector.

Consistently with the Commission’s approach, an undertaking with a market share below 40 per cent is very unlikely to be considered dominant. However, the ICA will assess further features of the market structure (demand and supply elasticity, potential competition, barriers to entry, technological developments, timescale for market entry of generics, etc) to assess dominance (case A431 of 11 January 2012, Ratiopharm/Pfizer; and A480 of 26 September 2016, Price increase of Aspen’s Pharmaceuticals). One cannot rule out that, in certain circumstances, an undertaking with a market share between 30 per cent and 40 per cent might be considered dominant in the light of peculiar market features that, for instance, make the existing competitors likely to exit the market in the short or medium term or incapable of competing effectively because of their atomisation.

To assess joint or collective dominance, the ICA as well as national courts apply the same criteria set out in the Commission’s and EU courts’ landmark cases (namely ECJ, case C-396/96, Compagnie Maritime Belge/Commission; and case T-342/09, Airtours/Commission). In case C10955 of 16 March 2011 (Ardagh Glass/FI PAR), the ICA ruled out the contention that the concentration would have created joint dominance because of a significant countervailing buying power on the demand side and law barriers to entry.

26. Can a patent holder be dominant simply on account of the patent that it holds?

Holding a valid patent on a drug is likely to confer dominance to the patent holder only if there are no equivalent therapeutic alternatives that are as efficient as the patented drug for a certain disease. Further, the fact that a patent is expired, or near to expiration, does not rule out dominance if no generic or original alternative for that drug is likely to enter the market in the short term.

27. To what extent can an application for the grant or enforcement of a patent expose the patent owner to liability for an antitrust violation?

In line with EU case law, the ICA may find the exploitative misuse of the patent system by a dominant patent holder with a view to exclude, deter or make it more difficult for a competitor to enter the market abusive (abuse of dominance by ‘abuse of rights’). For example, in case A431, the ICA fined Pfizer for having requested the extension of the duration of the patent coverage after its natural expiration and threatening legal actions to enforce the exclusivity against generics, thus delaying their market entry. The Italian Council of State confirmed the ICA’s decision on 12 February 2014, following the annulment of the ICA’s decision by a lower court.

28. Can certain life-cycle management strategies also expose the patent owner to antitrust liability?

The ICA should act in accordance with EU case law and principles on this regard. Life-cycle management strategies do not, by themselves, constitute abuse of dominance if they are performed by genuinely and fairly relying on regulatory provisions aimed at protecting the recovery of initial investments by manufacturer or MAHs. Conversely, any misuse by a dominant manufacturer or MAHs of regulatory provisions, as well as of regulatory gaps, to artificially extend market or data exclusivity protections and resulting in the exclusion or delay of competition may be deemed abusive by the ICA (being the result of an “abuse” or “misuse” of rights). In Case A480 (Price increase of Aspen’s pharmaceuticals), the ICA has maintained that the way Aspen re-negotiated the price of certain reimbursable drugs with the AIFA (by threatening to delist such drugs to a non-reimbursable (and therefore free-to-market) class) constituted an abuse of dominance in the form of imposing unfair pricing conditions (excessive pricing). The ICA argued that Aspen instrumentally threatened to delist the drugs concerned in order to cut off already scarce supplies to the Italian market, knowing that by doing so it would force the AIFA to accept its unfair pricing terms (the AIFA accepted a price increase of up to 1,500 per cent of the original price).

On 1 March 2017 the ICA opened new proceedings against Aspen alleging the company’s failure to comply with the order to cease the abusive conduct and re-negotiate prices on fairer terms.

29. May a patent holder market or license its drug as an authorised generic, or allow a third party to do so, before the expiry of the patent protection on the drug concerned, to gain a head start on the competition?

There is no case law in Italy on such conduct, but it will likely be deemed abusive if the effect is to prevent competition that would otherwise have existed. See questions 20, 27 and 28. However, one cannot rule out that it may be objectively justified, or even pro-competitive, depending on the specific circumstances.

30. To what extent can the specific features of the pharmaceutical sector provide an objective justification for conduct that would otherwise infringe antitrust rules?

The objective indispensability of a practice to achieve a public goal related to the protection of health may, in principle, justify certain conducts that would otherwise be deemed contrary to competition law. In addition, a careful interpretation and application of the regulatory framework applicable to the R&D, manufacturing and supply chain may provide objective legal justifications to certain behaviours or conducts.

The huge, long-term investments required to research, trial and market pharmaceuticals are a characteristic feature of this sector.

Undertakings need the right incentive and safeguards to tackle the risk and to collect the resources and financing needed to discover new therapies and bring a new drug on the market. Certain life-cycle and patent-related practices or restrictions might also be objectively justified on such grounds, if properly substantiated. The ICA will assess such cases in line with the EU case law (eg, case C-501/06 P of 6 October 2009, GlaxoSmithKline Services and Others v Commission).

31. Has national enforcement activity in relation to life cycle management and settlement agreements with generics increased following the EU Sector Inquiry?

Yes – the ICA has since increased the attention and scrutiny over agreements and practices in the pharmaceutical sector in Italy. As a consequence, the ICA issued a few landmark decisions on competition law infringements in the sector (eg, cases A431, A480 and I760). However, this trend has only clearly emerged in the last four to five years and may increase in future as a result of the findings of the sector inquiry into the marker for human vaccines, and of the ICA’s revitalised attention on competition enforcement in the pharmaceutical industry.

Articolo inserito in: Regolamentare, Antitrust