European Commission opens unprecedented abuse of dominance probe in animal medicines sector

The EC notes that Zoetis’ Librela is the first and only monoclonal antibody medicine approved in Europe to treat osteoarthritis-associated pain in dogs. It explains that at the same time as developing Librela, Zoetis acquired a rival late-stage pipeline product. This product was set to be exclusively commercialised in the EEA by a third party.

The EC is concerned that Zoetis may have engaged in exclusionary behaviour by terminating the development of this alternative product and refusing to transfer it to that third party.

It is the first time that the EC has opened a formal investigation into a potential abuse relating to the exclusionary termination of a pipeline product which was to be commercialised by a third party. 

The development sends a warning right across the life sciences sector and adds to the novel forms of potential abuse that the EC is currently investigating. Our alert on the EC’s investigation into Teva outlines the EC’s allegation that the company abused its dominant position for the treatment of multiple sclerosis by misusing patent procedures and engaging in a disparagement campaign.

The EC’s Zoetis investigation follows a complaint and, fairly unusually for an abuse of dominance case, a dawn raid. It is indicative of the fact that authorities worldwide are prioritising work in markets impacting household expenditure – the animal health sector falls firmly within that remit in many jurisdictions. In announcing the probe, Competition Commissioner Margrethe Vestager notes that “competition in veterinary medicines ensures pet owners can choose between different safe, innovate and affordable medicines”. In the UK, the Competition and Markets Authority has provisionally decided to launch a formal market investigation into competition in the UK veterinary sector.