European Commission's Failure to Determine Whether Originator "Tool-Boxes" Are Appropriate Responses to Generic "Tool-Boxes," or Abuses Under Article 82 EC

IN 2008 AND 2009, the European Commission conducted its Pharmaceutical Sector Inquiry based on a suspicion that a slower rate of approval for new drugs may have resulted from violations of European Union competition law. The Commission issued Preliminary and Final Reports detailing the findings of the Inquiry, which did not include any findings of the sort of competition law violations originally sought. Instead, one of its chief findings was that originator pharmaceutical companies engaged in business practices the Commission termed "tool-boxes" allegedly designed to deter or delay the entry of generic copies into the market. Both Reports concluded that these "tool-box" practices resulted in approximately (sic)3 billion in losses to consumers and accordingly could be considered abuses of dominance under Article 82 EC (now Article 102 TFEU). However, the Commission did not consider whether such originator business practices were actually legitimate defenses by dominant undertakings against attacks by generic pharmaceutical companies of a sort the European Court of Justice holds justifiable under Article 82 EC. This lapse is difficult to understand, as the evidence in both Reports, as well as publicly available evidence, demonstrates that generic companies engage in similar business practices that may be termed "generic tool-boxes.