Decision of the CMA: Anti-Competition Agreement with Respect to Fludrocortisone Acetate 0.1 Mg Tablets
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Decision of the Competition and Markets Authority Competition Act 1998 Anti-competitive agreement with respect to fludrocortisone acetate 0.1 mg tablets Case 50455 9 July 2020 Page 1 of 269 © Crown copyright 2020 You may reuse this information (not including logos) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit www.nationalarchives.gov.uk/doc/open- government-licence/ or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: [email protected]. Confidential information in the original version of this Decision has been redacted from the published version on the public register. Redacted confidential information in the text of the published version of the Decision is denoted by []. The names of individuals mentioned in the description of the infringement in the original version of this Decision have been removed from the published version on the public register. Names have been replaced by a general descriptor of the individual's role. Page 2 of 269 Contents 1. INTRODUCTION AND EXECUTIVE SUMMARY .......................... 6 A. The purpose of this document ........................................................ 6 B. Summary of the infringement ......................................................... 6 C. Settlements and action being taken ............................................... 9 2. THE INVESTIGATION ................................................................. 10 A. Conduct of the Investigation up to the Statement of Objections ... 10 B. Conduct of the Investigation following the issuance of the Statement of Objections ................................................................................ 12 C. Evidence gathering and engagement ........................................... 14 3. FACTUAL AND REGULATORY BACKGROUND ...................... 18 A. Key companies and individuals .................................................... 18 B. Fludrocortisone Acetate ............................................................... 21 C. Framework for prescribing and dispensing Fludrocortisone Acetate Tablets for human use .................................................................. 27 D. Regulatory framework for the supply of generic pharmaceuticals in the UK such as Fludrocortisone Acetate Tablets .......................... 30 4. CONDUCT UNDER INVESTIGATION ......................................... 39 A. Introduction ................................................................................... 39 B. Parties’ positions and conduct in the Relevant Market prior to the SDA .............................................................................................. 41 C. The Parties negotiate and agree the SDA .................................... 49 D. The SDA was terminated in October 2016 by the entry of Aspen and Tiofarma into the SAA, pursuant to which Aspen purchased the MAs for Ambient Storage Fludrocortisone ............................................ 85 E. Third parties expressed an interest in MAs held by Tiofarma for Ambient Storage Fludrocortisone ................................................. 89 F. Overview of the pricing, cost, volume and revenues related to the supply of Fludrocortisone Acetate Tablets in the UK from 2014 to 2018 ............................................................................................. 91 G. Aspen’s actions with respect to parallel imports of Cold Storage Fludrocortisone into the UK ........................................................ 101 5. THE PARTIES ARE UNDERTAKINGS FOR THE PURPOSE OF COMPETITION LAW ................................................................. 103 A. Legal framework ......................................................................... 103 B. Assessment ................................................................................ 103 6. THE RELEVANT MARKET AND ASPEN’S POSITION ON THE MARKET .................................................................................... 104 A. Market definition ......................................................................... 104 Page 3 of 269 B. Aspen held significant market power in the Relevant Market since November 2014 .......................................................................... 117 7. THE SDA IS AN AGREEMENT FOR THE PURPOSE OF THE CHAPTER I PROHIBITION AND ARTICLE 101 TFEU ............. 132 A. Legal framework ......................................................................... 132 B. Application to this case ............................................................... 133 8. ASSESSMENT OF THE OBJECT AND EFFECT OF THE SDA 154 A. The legal and economic context relevant to the SDA ................. 154 B. Assessment of the object of the SDA ......................................... 184 C. Assessment of the effect of the SDA .......................................... 208 D. Appreciable restriction ................................................................ 227 E. Effect on trade ............................................................................ 228 F. Exclusions .................................................................................. 232 G. Objectively justified transactions and ancillary restraints ............ 232 H. Individual exemptions ................................................................. 233 I. Duration ...................................................................................... 233 9. ATTRIBUTION OF LIABILITY ................................................... 234 A. Legal framework ......................................................................... 234 B. Application to this case ............................................................... 236 10. THE CMA’S ACTION ................................................................. 239 A. The CMA’s decision ................................................................... 239 B. Directions ................................................................................... 239 C. Financial penalties ...................................................................... 239 D. Calculation of the penalties ........................................................ 246 E. Payment of the penalties ............................................................ 260 Annex 1: Glossary ............................................................................ 262 Annex 2: Key individuals referred to in the decision..................... 269 Page 4 of 269 Table of figures Figure 1: Third-party information requests ............................................................... 16 Figure 2: Number of 0.1 mg equivalent doses of fludrocortisone acetate dispensed in England .................................................................................................................... 25 Figure 3: Calculation of the Supply Price in the negotiation leading up to the SDA, assuming a commission level at []% .................................................................... 62 Figure 4: Calculation of the Supply Price under the SDA ......................................... 63 Figure 5: ASP and NHS England Reimbursement Price of Aspen’s Fludrocortisone Acetate Tablets (on a monthly basis, 2014-2018) .................................................... 92 Figure 6: Costs of Cold Storage Fludrocortisone and Ambient Storage Fludrocortisone ........................................................................................................ 96 Figure 7: Annual volumes of Fludrocortisone Acetate Tablets (2014-2018) ............. 97 Figure 8: Annual market shares of the supply of Fludrocortisone Acetate Tablets for Aspen and parallel importers 2014–2018 (based on sales revenues and volumes) ............................................................................................................................... 119 Figure 9: Average monthly selling price and annual volumes of Aspen’s and NHS Fludrocortisone Acetate Tablets (on a yearly basis, 2014-2018) ........................... 124 Page 5 of 269 1. INTRODUCTION AND EXECUTIVE SUMMARY A. The purpose of this document 1.1. This Decision is addressed to: (a) Aspen Pharmacare Holdings Limited1 (‘Aspen Holdings’), Aspen Global Incorporated2 (‘Aspen Global Inc.’), Aspen Pharma Ireland Limited3 and Aspen Pharma Trading Limited,4 which from at least 1 March 2016 formed part, together with Aspen Europe GmbH,5 of an undertaking which is referred to in this Decision as ‘Aspen’; (b) Amilco Limited,6 which from at least 1 March 2016 constituted an undertaking which is referred to in this Decision as ‘Amilco’; and (c) Tiofarma Beheer B.V.7 and Tiofarma B.V.,8 which from at least 1 March 2016 together formed part of an undertaking which is referred to in this Decision as ‘Tiofarma’. 1.2. By this Decision, the CMA finds that Aspen, Amilco and Tiofarma (each a ‘Party’ and together the ‘Parties’) infringed the prohibition imposed by section 2(1) of the Act (the ‘Chapter I prohibition’) and Article 101(1) of the Treaty on the Functioning of the European Union (‘TFEU’).9 1.3. A glossary and a list of key individuals referred to in this Decision are attached at Annex 1 and Annex 2. B. Summary of the infringement 1.4. Fludrocortisone acetate 0.1 mg (100 microgram) tablets containing the active pharmaceutical ingredient (‘API’) fludrocortisone acetate (‘Fludrocortisone Acetate Tablets’) are a prescription-only medicine used primarily to treat 1 A company incorporated in the Republic of South Africa under registration