Excessive Pricing of Pharmaceuticals in the EU: Balancing between Exploitation and Exploitative Abuse

Normally, after the end of the exclusivity period offered by patents, medicines fall in public domain attracting competing companies to launch generic production that would bring down price levels. for different reasons, generic production of off-patented medicines does not always take place, allowing the main producer to continue dictate price levels. under some circumstances, this conduct may turn into exploitative abuse. However, excessive pricing itself is not anti-competitive unless other cost-and non-cost-related factors are present that turn excessive pricing a concern of competition law.

The article analyses the most relevant Eu case-law on abusive pricing in the pharmaceutical sector questioning what the right benchmark price is in the light of the United Brands two-limb test. As economic calculations cannot provide universal solutions in these cases, the article suggests that the United Brands test should not be the only method to judge exploitative abuse, but rather a combination of different methods that need to be applied to achieve reliable results. As emphasised in several cases, both economic calculations and other factors should be considered to avoid the risk of false-positive results. furthermore, exploitative abuse exists only in case excessive pricing is additionally unfair. However, judging unfairness, as discussed in this article, is a complicated task where the outcomes depend on the impact of the test results on the competition process.