Excessive Pharmaceutical Prices as an Anticompetitive Practice – Reviving Compulsory Licensing in Competition Law & Antitrust

Posted by Social Science Research Network

Excessive Pharmaceutical Prices as an Anticompetitive Practice – Reviving Compulsory Licensing in Competition Law & Antitrust

By Behrang Kianzad (University of Copenhagen)

The issue of securing access to patented pharmaceutical products has been in the forefront of global legal debate for many years. This debate intensified further following the enactment of the TRIPS agreement and the global enforcement of Intellectual Property Rights such as patents through the World Trade Organization. To combat the problem, compulsory licensing has been forwarded as one solution, though hitherto mainly discussed from the human rights and right to health perspectives. Less attention has been focused on excessive prices of medicines as an anticompetitive practice in and out of themselves, and how competition law and legal-economics theories and models can inform this deadlocked issue.

Such a treatment of excessive prices under competition law would constitute a sound legal basis for anti-competitive enforcement such as compulsory licensing but also make other tools available to competition authorities such as fines. This could be done making use of the flexibilities entailed in this regard in the TRIPS agreement context, mainly through article 31(k) and article 40.

Shifting focus to the European Competition Law, the notion of “unfair” or excessive prices has been enshrined in article 102 TFEU regarding exploitative pricing abuses by a dominant firm, although the application and enforcement of this has been rather limited in practice. Recent case law and an evolution of thought regarding competition law and legal-economics theories point however to a possible policy shift in this regard.

The paper hence analyzes the unlocked potential entailed in competition law in treating excessive pharmaceutical prices as an anticompetitive practice where applicable and discusses the legal-economic theories underpinning this discourse.