Dutch regulator intervenes to encourage biosimilars competition

Out-Law News | 21 Feb 2022 | 2:35 pm | 1 min. read

A regulatory intervention in the Netherlands has put an end to a discounting scheme for a popular medicine in a bid to make it easier for biosimilar products to compete in the market.

The intervention by the Authority for Consumers and Markets (ACM) concerns Pfizer’s anti-rheumatic drug Enbrel.

According to the ACM, Pfizer told the regulator it “will no longer persuade hospitals in the Netherlands into purchasing anti-rheumatic drug Enbrel through its discount schemes” after the ACM had raised concerns about the effect of the discounting on competition in the market.

Pfizer previously held a monopoly on the supply of Enbrel in the Netherlands. However, when a patent it held expired in 2015 it enabled biosimilar medicine manufacturers to launch their own rival products. The ACM investigated the subsequent discounting practices that Pfizer deployed to maintain its advantage in the market.

In its investigation, the ACM examined contracts Pfizer had concluded with hospitals in the Netherlands. It found that they included a clause that linked the level of discounts the health providers could benefit from in future orders of Enbrel to the volume of the products ordered. The ACM said the use of the clause “created the risk of a substantial financial barrier emerging for hospitals to switch drug”.

Following engagement with Pfizer, the ACM provisionally concluded that “the pricing structure that Pfizer used seemed to be at odds with competition rules”, but it closed its investigation into whether the practices constituted an abuse of a dominant market position, in breach of competition laws, following Pfizer’s commitments to end the discounting scheme.

The ACM said: “Former patent owners with strong market positions must ensure that the discounts they give do not have any anticompetitive effects. Bids with large differences in discount rates that depend on whether or not certain conditions are met are more likely to be anticompetitive. ACM expects drug manufacturers to make reasonable, competitive bids for all patients. Should ACM receive reports that manufacturers hinder hospitals that wish to switch to biosimilars, ACM will take enforcement action.”

In a statement, Pfizer said: “Pfizer values good relationships with all relevant regulators, including the ACM. As part of that relationship, there was a constructive dialogue and although Pfizer disagrees with the ACM on important points it nonetheless took steps to achieve an outcome satisfactory to the ACM. Pfizer equally values fair competition and complies with relevant laws and regulations.”