Disparagement in Pharma: Why Competition Matters?
On July 22, 2024, the European Commission made headlines by accepting commitments from pharmaceutical company Vifor to address potential anticompetitive disparagement of a rival iron deficiency treatment. This case highlights a concerning practice in the pharmaceutical industry: Companies may spread misleading information about competitors’ products to protect their market position.
Disparagement practices involve disseminating negative and often inaccurate information about a competitor’s product to discourage its use. This is particularly concerning as it targets healthcare professionals, who play a crucial role in prescribing decisions in the pharmaceutical sector.
The interconnectedness of anti-competitive practices in the pharmaceutical sector is undeniable. As I noted in a recent paper in the Journal of Antitrust Enforcement, “Disparagement practices are also connected to pay-for-delay agreements and excessive pricing. This practice usually promotes the company’s original medicine and/or its generic product” (Hosseini 2024, 7).
Pay-for-delay agreements, where originator companies pay generic manufacturers to delay market entry, can create an environment where disparagement becomes more likely. With delayed generic competition, originator companies have a stronger incentive to protect their market share through potentially misleading communications about competitors.
The Vifor case centred on allegations that the company spread misleading safety information about Monofer, a competing intravenous iron treatment, to protect its own product, Ferinject. The European Commission was concerned this conduct may have ‘unduly hindered Monofer’s uptake in the European Economic Area’ and that it potentially violated EU competition law, underscoring the serious legal implications of such practices.
This is not an isolated incident. In 2022, the Commission opened an investigation and later sent a Statement of Objections to Teva alleging similar conduct regarding a multiple sclerosis medicine. Back in 2010, French competition authorities investigated several cases of disparagement practices and in 2013, they found Sanofi-Aventis had engaged in misleading advertising about the safety of a generic blood-thinning drug to protect its branded version. The Sanofi case is particularly instructive. As I explained in my paper, “the advertising strategy of this company was found to be misleading regarding the quality and safety of a generic blood-thinning drug (Plavix(R)), according to the French Competition Authority decision” (Hosseini 2024, 7). This case demonstrates how disparagement can be used as a tool to hinder generic competition specifically.
Why does this matter? These practices can “manipulate the normal competition process in the pharmaceutical market” (Hosseini 2024, 7). By discouraging the use of competing products through misinformation, companies can maintain artificially high prices and limit patient access to alternative treatments.
The commitments accepted from Vifor offer insight into potential remedies. The company agreed to launch a “comprehensive and multi-channel communication campaign” to correct previous messaging, refrain from making unsupported safety claims about competitors, and implement compliance measures.
As pharmaceutical markets evolve, with increasing competition from biosimilars and generics, the temptation for branded drugmakers to engage in disparagement may grow. This is particularly concerning in light of the impact of the COVID-19 pandemic on the pharmaceutical sector. As I argued in my paper, “The pandemic established a need to include human rights considerations in competition law and for more effective, patient-centred enforcement” (Hosseini 2024, 16).
Policymakers and competition authorities should consider creating a regulatory environment that discourages these practices. This could increase transparency requirements for communications about competitor products and enhance monitoring of marketing practices in the pharmaceutical sector.
In the post-pandemic world, and considering the recent AI revolution, ensuring fair competition in the pharmaceutical sector has become more crucial than ever for public health and patient access to affordable medicines. As I explained in another paper, the rapid advancement of artificial intelligence technologies opens up new possibilities for pharmaceutical companies to engage in sophisticated disparagement practices. AI-powered algorithms could be used to target healthcare professionals with personalised, seemingly credible misinformation about competing products. Moreover, AI-generated content could blur the lines between factual information and misleading claims, making it harder for regulators to detect and prove instances of disparagement. Failure to address these challenges by competition authorities could significantly impact patient access to a full range of safe, effective, and affordable treatment options.
References:
Hosseini, M. 2024. The evolution of EU competition law and policy in the pharmaceutical sector: long-lasting impacts of a pandemic. Journal of Antitrust Enforcement. https://doi.org/10.1093/jaenfo/jnae037
Hosseini, M. 2024. AI, Pharmaceutical Sector, and EU Competition Law and Policy: What Does the Future Look Like? Competition Policy International, Antitrust Chronicle, May 2024, Volume 2, 23–28.
European Commission. 2024, Commission accepts Vifor’s commitment to address possible anticompetitive disparagement of iron medicine. [Press release]. Brussels. https://ec.europa.eu/commission/presscorner/detail/en/ip_24_3907 22 July 2024.
European Commission. 2022, June 20. Antitrust: Commission opens investigation into possible anticompetitive disparagement by Vifor Pharma of iron medicine [Press release]. Brussels. https://ec.europa.eu/commission/presscorner/detail/en/ip_22_3822 2 July 2024.
This research is part of the COMPHACRISIS project, which has received funding from the European Union’s Horizon Europe MSCA programme (grant agreement no 101061575). The views and opinions expressed are, however, those of the author only and do not necessarily reflect those of the European Union or the European Research Executive Agency.
