EU Pharmaceutical Market: Problems of Competition

DOI: 10.20542/0131-2227-2020-64-2-53-62

N. Kondrat’eva (,
Institute of Europe RAS, 11–3, Mokhovaya Str., Moscow, 125993, Russian Federation;
D. Khromakov (,
Institute of Europe RAS, 11–3, Mokhovaya Str., Moscow, 125993, Russian Federation

Abstract. The paper reviews recent developments in the enforcement of competition rules in EU pharmaceutical sector. Based on a number of antitrust cases dealt with by the European Commission, it concludes that even big and developed markets with a large number of independent actors, such as the European Union, need regulation in order to tackle anticompetitive agreements and behavior. In the first section of the text, major parameters of the industry are examined, including current production value, employment, labor productivity and trade figures. Additionally, the importance of R&D for pharmaceutical companies is emphasized especially in the light of improving global competitiveness. The second part critically discusses several most significant antitrust investigations launched by the EC over the past decade. The list of competition law infringements include price fixing, false or misleading representations, abuse of a dominant position and market or customer allocation. The method of setting fines and offering reductions is also considered. The article highlights that the goal of these investigations is not to damage the economic viability of an offender but to make antitrust violations unprofitable and thus to prevent them. The final chapter stresses that companies have the right to appeal to a court against the decision of a competition authority. The fines imposed by the European Commission are reviewed by the Court of Justice of the European Union. There have been successful appeals, but the trend is to gradually expand the definition of restriction of competition. In summary, the existing regulation framework is necessary to promote competition and protect consumer rights. The EU policy on antitrust strives to strike a balance between the interests of original pharmaceutical companies and generic producers. The former are supported by patents, government subsidies and the demand for new treatment options; for the latter, it is crucial how efficiently the authorities control attempts to preserve exclusivity by unfair market practices since the fact that patents expire is their major source of income. The European experience in this area is especially important today when the single market for medicines in the Eurasian Economic Union has entered its final stage.

Keywords: European Union, pharmaceutical market, perfect competition, competition policy, European Single Market, European Commission, Court of Justice of the European Union


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For citation:
Kondrat'eva N., Khromakov D. EU Pharmaceutical Market: Problems of Competition. World Eonomy and International Relations, 2020, vol. 64, no. 2, pp. 53-62.

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