Frederick M. Abbott
Excessive Pricing Doctrine in the Pharmaceutical Sector: The Space for Reform,
in EU Competition Law and Pharmaceuticals, W. Sauter, M. Canoy and J. Mulder (eds), Edward Elgar, 2022 (forthcoming)
SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3957946 (pre-publication text)
This chapter reflects on the evolution of competition law jurisprudence regarding excessive pricing of pharmaceutical products. It suggests areas where improvements might be considered. This includes, first, establishing per se rules regarding levels of pricing increases that might be considered excessive based on cost-plus baselines and comparison with prices charged. This would reduce the resources expended by competition authorities and shorten prosecution timelines. The second set of improvements involves identifying the appropriate methodology for use in determining reasonable baseline or normal prices to compare against prices charged, particularly when a rule of reason analysis is required. Reasonable cost-plus baselines both for generic and originator products, taking account of risk, can be established. Finally, the so-called “two-step” methodology for determining excessive pricing derived from the CJEU’s 1978 decision in United Brands is revisited. Outside the per se circumstance, this chapter recommends unitary determination of excessive pricing based on cost and context.