Pharmaceutical sector — clarification on approach to market definition for prescription medicines

A decision handed down by the UK Court of Appeal earlier this month provides useful guidance on the correct approach to defining the market in relation to pharmaceutical products. The Court of Appeal held that a patented pharmaceutical product should not be regarded as a distinct market. In its judgment, the Court of Appeal dismissed Chemistree’s appeal, affirming the High Court’s refusal to grant an interim injunction against the supplying pharmaceutical company for an alleged abuse of dominance. The Court of Appeal ruled only on the dominance aspect of the case and concluded that it was, therefore, not necessary to address the allegations of abuse.

AbbVie is a pharmaceutical research and development company that manufactures the patented product Kaletra, a medicine used in HIV treatment. Chemistree is a prescription home delivery and medicine administration service. In 2005, Chemistree entered into a supply agreement with AbbVie for the supply of Kaletra for home delivery in London. Specifically, the contract was entered into in order for Chemistree to fulfil its contractual obligations with NHS Trusts to deliver HIV medicine to patient homes across the City of London.

Over a period of time, Chemistree’s demand for Kaletra rose, spiking at the end of 2012 to more than three times the volume it required at the start of that year. As a result, AbbVie found it had a shortage of supply for the UK market. It requested a breakdown from Chemistree as to its requirements, in order to verify stock supplies to meet UK patient needs and not to meet wholesale purchases. It transpired that Chemistree had also been including in its orders for Kaletra additional quantities of the medicine for prescriptions outside of the UK (to Lithuania) and also for wholesale activities. Just 15 per cent of the total volume of product ordered at the end of 2012 related to the homecare supply contract…

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