Brazil joins the ‘pay-for-delay’ party


Many of our pharma-themed blog posts have focused on the actions that European and US regulators have been taking in the sector. However, it’s not just the EU and the US that are exploring the boundaries of their antitrust laws in the sector: Sophie has already mentioned the phenomenon of global convergence here, commenting on the investigation into Pfizer in Australia for conduct which might have the effect of delaying generic entry after patent expiry. We thought we’d mention that the Brazilian authority has now also joined the ‘pay-for-delay’ party.

On 6 August, the Brazilian competition authority fined Merck around $1.8 million for conspiring to prevent distributors from working with generic drugmakers. The Administrative Council for Economic Defense, known as CADE, concluded that the German pharma giant had met with Brazil’s major drug companies to hatch a plan to limit the sale of generic drugs in the country, to the detriment of consumers.

“The anti-competitive effects of the practice are clear,” CADE spokesman Alessandro Octaviani said in a statement. CADE took the view that even a short delay in generic entry would prevent cheaper products from reaching consumers. In contrast (and perhaps predictably), a Merck spokesman said that the German company was surprised by the decision and suggested that there was a lack of evidence “demonstrating any anti-trust violation”. It is understood that Merck may file an appeal.

The antitrust community has always known that often the enforcement activities of jurisdictions around the world take their cue from the US and/or the EU – given the marked increase in the communication between authorities internationally, this is unsurprising. If anything, this puts even more emphasis on the activities of the EU and US authorities, especially at a time when the politicisation of antitrust enforcement is rising up the agenda…