Climate change ahead

The pharmaceutical industry faces a tougher regulatory climate following the European Court of Justice’s (ECJ’s)decision to uphold AstraZeneca’s €52.5m fine for blocking cheaper rivals to its ulcer drug Losec.

The decision in AstraZeneca v. Commission: C-457/10P last week marked the end of a dispute dating back to the 1990s, when AstraZeneca was first investigated for potentially abusing its position to prevent generics entering the market.

Pharmaceuticals lawyers warned the decision could create extra burdens on innovative players in the industry. Marie Manley, head of Bristows’ pharmaceutical regulatory team, says: “The Commission will be delighted with the ECJ’s endorsement to its approach; innovative pharma less so. The pharmaceutical industry is now subject to a set of onerous but not fully clear obligations. Ensuring compliance will require pharmaceutical companies to build in more checks and balances to their internal procedures.”

Pat Treacy, head of Bristows’ competition team, says: “The effects of this judgment resonate beyond the pharmaceutical sector. Companies which may be dominant now have an obligation to conduct themselves transparently when dealing with the public authorities.”