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ACCC appeals Pfizer decision

gavelThe Australian Competition and Consumer Commission (ACCC) has lodged a Notice of Appeal from the Federal Court’s decision to dismiss the watchdog’s proceedings against Pfizer Australia.

The ACCC alleged Pfizer had contravened the Competition and Consumer Act 2010 by misusing its substantial market power and engaging in exclusive dealing conduct for the purpose of substantially lessening competition in relation to particular cholesterol lowering products by its offers to supply its originator brand of atorvastatin, Lipitor, and its own generic atorvastatin product to community pharmacies in early 2012.

Atorvastatin is a pharmaceutical product used to lower cholesterol. Pfizer’s originator brand of atorvastatin, Lipitor, was for a number of years the highest selling prescription medicine under the Pharmaceutical Benefits Scheme.

Pfizer’s offers to suppliers were first made prior to Pfizer’s loss of patent protection for the atorvastatin molecule, when other suppliers of generic medicines were not permitted to make competing offers to supply a generic atorvastatin product to pharmacies.

Pfizer offered significant discounts and the payment of rebates previously accrued on sales of Pfizer’s Lipitor, conditional on pharmacies acquiring a minimum volume of Pfizer’s generic atorvastatin product and agreeing to restrict their re-supply of competing generic atorvastatin products.

The court dismissed the ACCC’s application, finding that while Pfizer had taken advantage of its market power by engaging in the alleged conduct, Pfizer’s market power was no longer “substantial” at the time the offers were made in January 2012.

The court also found that the ACCC had failed to establish that Pfizer had pursued its conduct for the proscribed purpose of deterring or preventing competitors from engaging in competitive conduct or for the purpose of substantially lessening competition.

ACCC chairman, Rod Sims, said cases involving allegations of misuse of market power and anti-competitive practices will always be a priority for the ACCC.

“It is therefore important that the ACCC seeks clarity from the Full Court on issues of market power and anti-competitive purpose, such as those raised by this case”, Sims said.

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