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On February 9, 2021, the National Commission for Markets and Competition (CNMC) fined Advanced Accelerator Applications Ibérica (AAA) and Curium Pharma Spain (Curium) EUR 5.76 million for a cartel involving a market-sharing agreement for the supply of fluorodeoxyglucose (S/0644/18 Radiopharmaceuticals). The CNMC also fined two of the companies’ managers.
This file results from the activities of the CNMC’s Economic Intelligence Unit (EIU). The CNMC created the EIU in 2018 as a special department to enhance the detection of anticompetitive practices through data analysis and other instruments, including AI techniques.
After examining the relevant data, the CNMC’s Competition Directorate carried out dawn raids at both companies’ headquarters in November 2018. As a result, the CNMC initiated sanctioning proceedings against AAA and Curium on February 7, 2019.
According to the CNMC’s decision, AAA and Curium entered into a market-sharing agreement covering the supply of fluorodeoxyglucose (18F-FDG) to public and private hospitals in Spain between June 2014 and November 2018. Hospitals use radiopharmaceuticals in nuclear medicine tests for detecting and monitoring illnesses like cancer, using medical imaging technology such as positron emission tomography (PET). Currently, AAA and Curium are the only companies capable of supplying this radiopharmaceutical product to Spanish hospitals.
According to the CNMC’s decision, the infringing companies implemented their market-sharing strategy through the following arrangements:
- Subcontracting agreements: For hospitals with the highest competitive pressure, the company with the best location to supply the radiopharmaceutical product, i.e., with the closest cyclotron (particle accelerator), did not submit the best offer. Consequently, the company with the cyclotron furthest from the hospital ended up being the successful tenderer for a higher price. The successful tenderer would then subcontract the service to its competitor, with the closer cyclotron, for a lower price than it charged the hospital.
- Non-compete agreements: The infringing companies either deliberately excluded themselves from tenders or submitted offers for the maximum price so the competitor could be awarded the contract.
As a result of the infringement, the CNMC fined AAA EUR 1.5 million, Curium EUR 4.2 million and each of the companies’ managers EUR 46,000.
In addition to the fines, the CNMC initiated proceedings to ban the companies from participating in public procurement procedures under article 71(1)(b) of Act 9/2017 on Public Procurement. This is the sixth time since 2019 the CNMC has referred a decision to the National Public Procurement Advisory Board to decide the duration and scope of a company’s ban from public procurement.
The enforcement of the ban remains uncertain in this case, since the fined (and banned) companies are the only ones supplying fluorodeoxyglucose in the Spanish market, which has significant entry barriers.
According to its press release of April 25, 2019, the CNMC is also investigating a pharmaceutical laboratory commercializing a medicinal product for autoimmune diseases due to an alleged abuse of dominance.
On March 4, 2021, the European Commission (EC) announced sanctioning proceedings against the pharmaceutical company Teva. The company allegedly delayed the market entry of medicinal products competing with its multiple sclerosis medicine, copaxone. The EC will also investigate if Teva launched a communication campaign to hinder access to competitors’ products. Note that the EC already fined Teva and Cephalon on November 26, 2020 for agreeing to delay the market entry of a cheaper generic version of Cephalon’s drug for sleep disorders, modafinil, after Cephalon’s main patents had expired. On February 10, 2021, the EC announced that it accepted Aspen’s commitments in the excessive pricing investigation opened in 2017, as discussed here.
According to the EC Report on competition enforcement in the pharmaceutical sector, pharmaceutical companies have been in the competition authorities’ spotlight for the last decade. There were 29 antitrust decisions against pharmaceutical companies between 2009 and 2017. In 2019, there were 20 ongoing investigations into the pharmaceutical sector.
The decision on the radiopharmaceuticals case confirms, once again, that the CNMC is focused on preventing anticompetitive practices in public procurement, as stated in its 2020 Action Plan. In fact, approximately 30% of CNMC decisions over the last three years have involved public procurement, as discussed here.
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