Supervisor believes company obstructed competitor's entry into vaginal contraceptive ring market by filing lawsuits
El Paìs Economy – 25 October 2022
The National Commission for Markets and Competition (CNMC) has imposed a fine of 38,934,000 euros 
to the pharmaceutical company Merck Sharp & Dohme (MSD) for abuse of a dominant position, as announced by the guarantor in a note. In accordance with the sanctioning decision, the subsidiary of the American pharmaceutical company in Spain brought legal proceedings in order to delay and hinder the entry of another company into the national market of combined hormonal contraceptives of the vaginal ring type, a product on which had a monopoly. This decision can be appealed in the National High Court.
The pharmaceutical company enjoyed a monopoly, from 2002 to 2018, on the first vaginal ring in Spain, as it held the patent that protected the Nuvaring contraceptive. A competitor, Insud Pharma, had developed an alternative ring to MSD's patent-protected one and began marketing it in June 2017 under the name Ornibel. Among other actions, invoking its patent right and citing reasons of urgency, MSD asked the Commercial Court no. 5 of Barcelona to initiate a procedure for verifying the facts and, subsequently, an "unheard of part" precautionary measure, i.e. without hearing Insud Pharma, to paralyze the production and sale of the Ornibel ring in Spain.
The competition considers it demonstrated that the objective of these legal actions was not to enforce their patent rights, but that they were exercised “in order to suppress the jurisdiction of the new entrant for as long as possible”. Insud Pharma was unable to resume production of Ornibel until the interim measures were lifted in a court order in December 2017. Since the only factory that produced its rings was located in Spain, the interruption of production affected distribution and sales in all countries where it had started to be marketed, which is why the behavior also affected competition in several countries of the European Union.
"Very serious" crime.
The abuse of a dominant position in recently liberalized markets such as the one under investigation is considered a very serious violation of competition law and can lead to fines of up to 10% of the total turnover of the offending company in the year preceding the imposition of the criminal complicity. The supervisory authority fined MSD 38,934,000 euros for having committed a very serious infringement, constituting abuse of a dominant position sanctioned by the law for the defense of competition (LDC) and by the Treaty on the functioning of the European Union (TFEU). The CNMC, in addition to considering the Spanish subsidiary of MSD as the author of the sanctioned practices, declared its parent company MSD Human Health Holding jointly liable for the payment of the fine.
The CNMC recalled in its statement that this type of behavior has long been in the crosshairs of European authorities. In July 2009, the European Commission published its Pharmaceutical Industry Inquiry Report in which it analyzed the reasons for the delays in bringing generic medicines to market. In its investigation, the Commission found that some legal actions ostensibly aimed at protecting patents were part of strategies aimed at extending the scope and duration of the protection they confer, in order to block or hinder the entry of generic medicines into the market .
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