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Abuse of a Dominant Position by Pharmaceutical Undertakings in EC Law

Männik, Martin (2006)
Department of Law
Abstract
In June 2005 the Commission imposed a &euro&semic60 million fine on AstraZeneca for abusing its dominant position. This was followed in December 2005 by the Discussion Paper on the application of Article 82 EC, issued by the Directorate-General for Competition of the European Commission. This thesis discusses the interpretation of Article 82 EC and does this from the perspective of pharmaceutical undertakings. The second chapter presents an overview of the pharmaceutical industry and its characteristics that make it unique - prices regulated by national authorities, very high R&amp&semicD costs and reliance on patents, patients' low price elasticity and the public service obligations of pharmaceutical undertakings. The third chapter... (More)
In June 2005 the Commission imposed a &euro&semic60 million fine on AstraZeneca for abusing its dominant position. This was followed in December 2005 by the Discussion Paper on the application of Article 82 EC, issued by the Directorate-General for Competition of the European Commission. This thesis discusses the interpretation of Article 82 EC and does this from the perspective of pharmaceutical undertakings. The second chapter presents an overview of the pharmaceutical industry and its characteristics that make it unique - prices regulated by national authorities, very high R&amp&semicD costs and reliance on patents, patients' low price elasticity and the public service obligations of pharmaceutical undertakings. The third chapter analyzes the aim of Article 82 EC, the concept of an undertaking and the market definition in Article 82 EC cases. The analysis refers to problems that emerge when applying EC competition rules on the abuse of dominance to pharmaceutical undertakings. The chapter thereafter concentrates on the concept of dominance and concludes that is it is crucial that the Commission's assessment regarding the relevant market and dominance would take into account all the relevant facts and apply the ''rule of reason''. The fourth chapter deals with abuse of dominance and lays down principles set forth in the Discussion Paper. Thereafter the author presents the facts of the AstraZeneca case and his assessment to the Commission's interpretation of Article 82 EC in that particular case. The author concludes that pharmaceutical undertakings must be able to protect their legitimate business interests. Conduct that is objectively justified must not be caught by Article 82 EC. The Commission understates the importance of R&amp&semicD and buyer power in the pharmaceutical industry. The Commission's favourism on parallel trade and generic drugs in Article 82 EC cases is not economically rational and would not in the long run (due to likely smaller investments in R&amp&semicD and uncertainties for pharmaceutical undertakings) benefit neither generic producers nor consumers. The conduct of AZ was legitimate and objectively justified. (Less)
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author
Männik, Martin
supervisor
organization
year
type
H1 - Master's Degree (One Year)
subject
keywords
European Affairs
language
English
id
1555037
date added to LUP
2010-03-08 15:22:53
date last changed
2010-03-08 15:22:53
@misc{1555037,
  abstract     = {In June 2005 the Commission imposed a &euro&semic60 million fine on AstraZeneca for abusing its dominant position. This was followed in December 2005 by the Discussion Paper on the application of Article 82 EC, issued by the Directorate-General for Competition of the European Commission. This thesis discusses the interpretation of Article 82 EC and does this from the perspective of pharmaceutical undertakings. The second chapter presents an overview of the pharmaceutical industry and its characteristics that make it unique - prices regulated by national authorities, very high R&amp&semicD costs and reliance on patents, patients' low price elasticity and the public service obligations of pharmaceutical undertakings. The third chapter analyzes the aim of Article 82 EC, the concept of an undertaking and the market definition in Article 82 EC cases. The analysis refers to problems that emerge when applying EC competition rules on the abuse of dominance to pharmaceutical undertakings. The chapter thereafter concentrates on the concept of dominance and concludes that is it is crucial that the Commission's assessment regarding the relevant market and dominance would take into account all the relevant facts and apply the ''rule of reason''. The fourth chapter deals with abuse of dominance and lays down principles set forth in the Discussion Paper. Thereafter the author presents the facts of the AstraZeneca case and his assessment to the Commission's interpretation of Article 82 EC in that particular case. The author concludes that pharmaceutical undertakings must be able to protect their legitimate business interests. Conduct that is objectively justified must not be caught by Article 82 EC. The Commission understates the importance of R&amp&semicD and buyer power in the pharmaceutical industry. The Commission's favourism on parallel trade and generic drugs in Article 82 EC cases is not economically rational and would not in the long run (due to likely smaller investments in R&amp&semicD and uncertainties for pharmaceutical undertakings) benefit neither generic producers nor consumers. The conduct of AZ was legitimate and objectively justified.},
  author       = {Männik, Martin},
  keyword      = {European Affairs},
  language     = {eng},
  note         = {Student Paper},
  title        = {Abuse of a Dominant Position by Pharmaceutical Undertakings in EC Law},
  year         = {2006},
}