Abuse of a Dominant Position by Reckitt Benckiser Healthcare (UK) Limited and Reckitt Benckiser Group Plc
Total Page:16
File Type:pdf, Size:1020Kb
Competition Act 1998 and Treaty on the Functioning of the European Union Decision of the Office of Fair Trading: Abuse of a dominant position by Reckitt Benckiser Healthcare (UK) Limited and Reckitt Benckiser Group plc Decision No. CA98/02/2011 Case CE/8931/08 12 April 2011 OFT1368 Please note that […] indicates figures or text which have been deleted or replaced in ranges for reasons of commercial confidentiality. Contents 1 Executive Summary............................................................................9 A. Introduction....................................................................................9 B. Summary of the infringement and action by the OFT ...........................9 2 The Facts ........................................................................................14 A. Introduction..................................................................................14 B. The parties ...................................................................................16 i) The undertaking .......................................................................16 ii) Other relevant parties................................................................17 C. The OFT's investigation .................................................................18 i) The preliminary investigation......................................................18 ii) The formal investigation ............................................................19 D. The Products ................................................................................23 i) Introduction .............................................................................23 ii) The Gaviscon Portfolio ..............................................................23 iii) Acidex/Peptac ..........................................................................28 iv) Other alginate products .............................................................29 E. The treatment of dyspepsia, acid reflux and GORD............................30 i) Introduction .............................................................................30 ii) Dyspepsia, acid reflux and GORD ...............................................30 iii) Treatments for dyspepsia, acid reflux and GORD ..........................31 F. Sales and price trends within the treatment area ...............................39 i) Introduction .............................................................................39 ii) General developments in the treatment area.................................39 iii) Pricing trends in the treatment area ............................................42 G. The process and benefits of generic competition ...............................43 i) Introduction .............................................................................43 ii) The lifecycle of a medicine.........................................................44 iii) Competition between branded and generic medicines....................46 iv) The benefits of full generic competition .......................................47 H. The regulatory framework relevant to generic competition..................50 i) Introduction .............................................................................50 ii) BPC and BNF roles in generating generic names ...........................50 iii) GP prescribing..........................................................................53 iv) Pharmacy dispensing.................................................................60 v) Medicine pricing .......................................................................61 vi) The withdrawal of medicines......................................................67 I. The publication of a generic name for GL .........................................68 J. The Withdrawal ............................................................................83 i) Introduction .............................................................................83 ii) The decision to withdraw GL NHS packs .....................................83 iii) RB's presentation of the Withdrawal to stakeholders................... 104 iv) The process of withdrawing GL NHS packs................................ 114 v) RB's assessment of the success of the Withdrawal..................... 117 3 Legal Background ........................................................................... 121 A. Introduction................................................................................ 121 B. The Chapter II prohibition ............................................................. 122 i) General.................................................................................. 122 ii) Application of Section 60 – consistency with European Union law ....................................................................................... 123 C. Application of Article 102 TFEU.................................................... 124 D. Relevant case law in relation to 'undertaking' ................................. 124 i) The notion of an undertaking ................................................... 124 ii) Attribution of liability for infringements ..................................... 125 E. Dominance ................................................................................. 128 i) Market definition .................................................................... 128 ii) Definition of dominance........................................................... 129 F. Abuse........................................................................................ 131 i) The concept of Abuse ............................................................. 131 ii) Legal framework for assessing abuse ........................................ 134 G. Effect on trade............................................................................ 141 i) Introduction ........................................................................... 141 ii) Effect on trade within the United Kingdom................................. 141 iii) Effect on trade between Member States.................................... 142 H. Burden and standard of proof ....................................................... 143 4 The Relevant Market....................................................................... 147 A. Introduction................................................................................ 147 B. Framework for defining the relevant market.................................... 148 i) Introduction ........................................................................... 148 ii) The hypothetical monopolist test .............................................. 149 iii) Market definition in the pharmaceutical sector............................ 152 iv) Market definition in AstraZeneca .............................................. 156 C. The focal products in this case ..................................................... 161 D. The relevant product market......................................................... 162 i) Introduction ........................................................................... 162 ii) The ATC, EPhMRA and the British National Formulary classification systems ............................................................. 163 iii) Modes of action of alginates and anti-ulcerants .......................... 168 iv) Therapeutic uses as set out in the prescribing literature............... 169 v) Reckitt Benckiser's contemporaneous documents ....................... 174 vi) Sales trends of alginates and anti-ulcerants................................ 193 vii) Conclusions on the relevant product market............................... 214 E. The interaction between the prescription and OTC sales channels ..... 216 i) Introduction ........................................................................... 216 ii) Differences in purchasing and pricing mechanisms...................... 218 iii) The effect of OTC prices on pricing in the NHS prescription channel ................................................................................. 219 iv) The effect of changes to OTC and NHS prescription channel pricing on purchasing volumes in each channel........................... 221 v) Reckitt Benckiser's internal documents...................................... 222 vi) Conclusion on the relevant sales channel................................... 225 F. The relevant geographic market .................................................... 225 G. Conclusions on the relevant market ............................................... 226 5 Dominance .................................................................................... 228 A. Introduction................................................................................ 228 B. Actual Competition...................................................................... 229 i) Market shares ........................................................................ 229 ii) Barriers to expansion............................................................... 238 C. Potential competition ................................................................... 242 i) Barriers to entry...................................................................... 242 D. Countervailing buyer power .......................................................... 247 E. Conclusions on dominance ........................................................... 251 6 Abuse........................................................................................... 253 A. Introduction...............................................................................