HIV drug at centre of competition row

Posted: 12th November 2013

Test tubesThe High Court has tested the boundaries of European Union competition laws in the context of a heated trade dispute which sprang from a critical shortage of a market-leading antiretroviral drug used for treating HIV patients.

The drug’s manufacturer had supplied the product to a company that provided home care services to HIV sufferers pursuant to an NHS contract. The company was also licensed as a wholesaler of pharmaceutical products under the Human Medicines Regulations 2012.

The company had placed increasingly large orders for consignments of the drug with the manufacturer, to the point where the latter suffered a critical stock shortage. The manufacturer raised concerns that the drugs might be being sold on to markets outside the UK and requested prescribing information from the company.

It declined to provide such information, citing commercial sensitivity, and the manufacturer responded by cutting down its supplies to the company, only satisfying a fraction of its orders. That prompted the company to launch proceedings, claiming that the manufacturer was abusing its dominant position within the UK market in relation to what was a ‘must have’ drug in the treatment of HIV.

An interim injunction requiring the manufacturer to meet its orders was refused. In dismissing the company’s appeal against that decision, the Court noted evidence that a large proportion of the drug consignments had been used to serve markets outside the UK as part of the company’s wholesale business.

Despite the company’s plea that there was ‘no generic equivalent’ available, the Court found that the drug did not, by itself, constitute a relevant product market. In those circumstances, the manufacturer could not be said to enjoy a ‘dominant position’ within the meaning of Article 102 of the Treaty on the Functioning of the European Union.

Observing that it was not a breach of competition law for a non-dominant supplier to refuse to supply a customer, the Court noted evidence that there were other drugs available that offered similar therapeutic benefits and found that the company’s case was based on ‘unsupported theory’.