All the questions
Mergers may involve two previously independent businesses, the acquisition of control of one business by another, or the creation of a full-function joint operation.
Mergers exceeding the following thresholds are subject to French merger control:
- the cumulative worldwide turnover excluding tax of all the companies party to the concentration exceeds 150 million euros;
- the cumulative worldwide turnover excluding tax of at least two of the companies concerned in France exceeds 50 million euros; Where
- the operation does not fall within the competence of the European Union.
Under these powers, the FCA has recently cleared several mergers in the field of laboratory testing. For certain transactions, the FCA required that prior corrective measures (mainly the sale by the buyer of some of its sites to third parties) be implemented by the parties before the issuance of the authorization in order to mitigate the impact on market competition. concerned.34
The Autorité also recently asked the European Commission to postpone the proposed merger of McKesson and Phoenix, two pharmaceutical wholesalers, because this operation mainly concerned the French market. 35
Since 2021, the European Commission has decided to use Article 22 of the EU Merger Regulation (EUTMR)36 to control certain transactions below the Community thresholds and below the national thresholds.
The pharmaceutical sector is particularly targeted by this referencing mechanism. Its first implementation is Illuminated case where a referral has been submitted by CAF. At the time of writing, the analysis of the merits of this case is in progress.
In October 2021, after the parties merged despite a standstill obligation imposed by the European Commission, the latter adopted interim measures to safeguard the independence of the companies, pending the completion of its in-depth investigation.37. Illumina then challenged the jurisdiction of the Commission to do so.38
Two practices have been identified in the pharmaceutical sector: vertical and horizontal anti-competitive agreements (cartel) and abuse of a dominant position. The most common practices are very specific, such as smearing, late payment agreements, and predatory pricing.
Recently, CAF issued two major rulings regarding the disparagement.
The first decision is a 2017 decision regarding the delay and limitation of the development of fentanyl generics in which the FCA imposed a fine on the originator company (Janssen-Cilag).39 This was first confirmed by the Paris Court of Appeal in 2019,40 which recalled the possibility for the Autorité to assess the merits, from the point of view of competition law, of the intervention and communications of a pharmaceutical company with health regulators. She also stressed that this prerogative does not amount to conferring on the Authority the possibility of contesting the legality of the decisions of the health authorities.
On the contrary, in this case, the finding of abuse was based on the conclusion that Janssen-Cilag’s exchanges with the ANSM had nothing to do with a scientific debate, which remains the prerogative of the ANSM, but were simply intended to reopen a legal debate that had already been closed.
Earlier in 2022, the Supreme Court heard the case41 and concluded that the FCA rightly sanctioned Janssen-Cilag because its practices sought to preserve its market position by disparaging generic products and improperly encouraging health authorities not to approve them.
The second decision is a 2020 decision dealing with practices in the area of the treatment of age-related macular degeneration (AMD).42 Genentech has developed two drugs: Lucentis, which treats AMD, and Avastin, which is an anticancer drug. Genentech licenses them from Roche and Novartis. Knowing that Avastin gives positive results on AMD, ophthalmologists began to prescribe it for use outside the scope of its MA. CAF fined Genentech, Roche and Novartis a total of 444 million euros for abuse of collective dominance for implementing an Avastin-smearing strategy to preserve the sale of Lucentis, which is seven times more expensive than Avastin. Roche then filed a lawsuit against CAF, arguing that it should stop making its decision public or at least make it clear that an appeal has been filed.43