Relevant Cases

After the passing of the new Law on Guarantees and Rational Use of Drugs, in 2006, and taking into account that submittal of lower prices for generic drugs, an Order approved at the end of that year, the new benchmark prices, that means, the maximum price that the Government is willing to pay for those drugs being dispensed that are funded by the pharmaceutical compensation services of the National Health System. Once the Order was passed, Davur Laboratories (Teva Group) launched a marketing campaign to advertise the lowering of drug prices after the Order, with messages such as “we are setting the prices back in their place”, “with these prices prescriptions are respected, for real”.

Given the difficulties of applying the new regulation to prices and the confusion this campaign could cause among the pharmacists when dispensing a particular drug, the Pharmacists’ Associations Federación Empresarial de Farmacéuticos Españoles (FEFE), Confederación Empresarial de Oficinas de Farmacia de Andalucía (CEOFA), and Seville and Malaga’s Business Associations (APROFASE y APROFARMA), distributed a letter to all pharmacies with certain comments and clarifications.
An Order by the Competition Authority of December 24, 2009, described the actions implemented by FEFE, APROFARMA, APROFASE and CEOFA as a collective recommendation aimed at harmonizing the behavior of the different pharmacy offices with respect to (against) Laboratorios Davur (boycott), in the market of generic drugs subject to a physician’s prescription and to the benchmark prices system, imposing a €1 million fine.

After a contentious administrative appeal was filed, the National High Court Judgment of January 18, 2011 (RJCA 2011, 3) maintained the practice qualification, while reducing the fine to half the previous amount.

The appeal before the Supreme Court analyzed in detail both the new drug prices and the pharmaceutical sector regulation , and the characteristics identified by the Supreme Court’s case law for a particular behavior to be considered as a collective recommendation and which requires, in any case, the implementation of competition rules to a particular agreement not be an abstract processes but one conducted through a specific examination of the content of its dispositions, its economic and legal context, the objective it tries to fulfill and its ability to restrict competition in a plausible way.

After conducting a detailed analysis of the behavior of the Business Associations and, of any pharmaceutical regulation and competition rights applicable to the case, the Supreme Court Judgment of October 24, 2014, (RJ 2014\5831) comes to the conclusion that it is not pertinent to qualify their behavior as a competition restrictive practice and it fully annuls the economic fine of €1 million imposed upon the Business Associations.