Excessive Pricing in Pharmaceutical Markets

January 2019

CPI Europe Column edited by Anna Tzanaki (Competition Policy International) & Juan Delgado (Global Economics Group) presents:

Excessive Pricing in Pharmaceutical Markets By Pedro Caro de Sousa (OECD)1

Introduction

This piece summarises the contents of a background note written for an OECD roundtable on excessive pricing in pharmaceuticals which took place in Paris on 28 November 2018.2

There are strong arguments for not intervening against exploitative excessive pricing, which have led to the development of stringent enforcement screens that build on the assumption that such cases should only be brought in exceptional circumstances. However, recent years have seen significant calls for intervention against high prices for pharmaceutical products, and there have been a number of competition enforcement cases regarding exploitative excessive pricing in this sector. These cases meet the criteria set out in enforcement screens developed as regards excessive pricing.

At the same time, the conditions that justify bringing such cases in the first place seem to have become relatively common in the pharmaceutical sector. Given the cost and challenges of bringing excessive pricing cases, these developments raise questions regarding what is the best response to high prices in this sector and whether there are alternatives to bringing exploitative excessive pricing cases. The application of competition law against high prices in the pharmaceutical sector requi…

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