DG COMP 2016 Report on Competition Policy: overview on the Life Sciences sector

On 31 May, the European Commission published its 2016 Report on Competition Policy. The Report, which is composed of a Communication and a detailed Staff Working Document, develops on the Commission’s main generic and sectorial policy, legislative initiatives and decisions adopted in application of EU competition law during 2016.

For the Life Sciences sector in particular, the Commission’s enforcement activities with respect to pharmaceuticals and health services indicate that the main challenge in this sector remains to find a balance between promoting innovation by rewarding companies for successful R&D investments and encouraging access to affordable medicines and services by enabling a competitive market environment. In the Commission’s view, this challenge is complicated by the high degree of regulatory activity in Member States leading to “significant national variations of medicine pricing and wholesale and pharmacy margins.” The Commission thus keeps monitoring agreements within the sector in order to tackle this challenge, as shown in particular in the publication of the Seventh Report on the Monitoring of Patent Settlements of December 2016.

Furthermore, the Report confirms some trends in the life sciences sector:

• M&A consolidation (e.g., the acquisition by Teva of Allergan’s generics business)
• Contribution of M&A enforcement to the promotion of innovation as indicated in the Commission´s Competition policy brief on "EU merger control and innovation" of April 2016
• The use of theories of harm – and of remedies where appropriate to preserve innovation – during the merger assessment

Finally, the Report sums up the Commission’s State aid actions in the health services sector stemming from complaints by private health service providers about alleged aid granted in favour of public hospitals.

This post was originally co-authored by Patricia Carmona Botana.