ACCC Unsuccessful In Latest Appeal Against Pfizer
Monday 4 June 2018 @ 10.28 a.m. | Legal Research | Trade & Commerce
In a recent decision handed down on 25 May 2018 (ACCC v Pfizer Australia Pty Ltd [2018] FCAFC 78), the Full Court of the Federal Court of Australia has dismissed an appeal by the Australian Competition and Consumer Commission (“ACCC”) against an earlier judgment in relation to Pfizer Australia Pty Ltd (“Pfizer”). The Full Court upheld the single judge decision that Pfizer had not misused its market power or engaged in prohibited anti-competitive exclusive dealing.
The ACCC had alleged that Pfizer breached ss 46 and 47 of the Competition and Consumer Act 2010 (Cth) (the “Act”) by misusing its market power to prevent or deter competition from other suppliers selling generic atorvastatin products to pharmacies, and engaged in exclusive dealing conduct for the purpose of substantially lessening competition, when offering to supply atorvastatin to community pharmacies.
Background to the Action
The ACCC’s case centred on actions taken by Pfizer in 2012 to lessen the impact it would face when its exclusive right to market atorvastatin expired on 18 May 2012. At that time, Lipitor (a cholesterol drug) was the world’s best-selling prescription drug.
During 2012, Pfizer offered significant discounts and the release of rebates accrued on previous sales of Lipitor to pharmacies. Pfizer’s offer was conditional upon pharmacies acquiring a minimum volume of Pfizer’s generic atorvastatin and agreeing to restrict their re-supply of competing genetic atorvastatin products.
The ACCC instituted proceedings against Pfizer in February 2014, alleging in this instance, that Pfizer misused its position as a patent holder of atorvastatin to prevent or deter competition from other suppliers selling generic atorvastatin products to pharmacies.
Claims Made by the ACCC
The Australian Financial Review reports that the ACCC alleged the:
The ACCC alleged [at para 568] of the judgment:
Amendments to the CCA
On 6 November 2017, Federal Parliament amended s 46 of the Competition and Consumer Act 2010 (Cth). The action which ACCC took against Pfizer involved the section 46 before the amendment came into effect, so it needed to demonstrate that a business with substantial market power took advantage of its market power for a specified anti-competitive purpose.
In handing down their judgment (see para 607(f)), their Honours said of s 46:
Comment from the ACCC
Commenting in a recent ACCC Media Release, the ACCC Chairman Rod Sims said:
In separate action by the ACCC, the AFR reports that ACCC is suing Australia's largest private hospital operator Ramsay Healthcare, alleging it engaged in misuse of market power and exclusive dealing by threatening to reduce surgeons' access to operating theatres in Coffs Harbour if they became involved with a competitor.
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Sources:
Australian Competition and Consumer Commission v Pfizer Australia Pty Ltd [2018] FCAFC 78
ACCC unsuccessful in appeal against Pfizer – ACCC Media Release 94/18 (25 May 2018)