OREANDA-NEWS.  March 27, 2013. The second meeting of the Working Group on Competition in the Pharmaceutical Sector (co-chaired by the Federal Antimonopoly Service (FAS Russia) and Italian Competition Authority) and the Headquarters for Joint Investigations of Violations of the Antimonopoly Law of the CIS Member-States took place in Moscow.

Participants included: Senior Investigative Officer of the Italian Competition Authority, Luca Arnaudo; Deputy Head of FAS in charge of the Headquarters for Joint Investigations of Violations of the Antimonopoly Law of the CIS Member-States Anatoly Golomolzin; the Head of ICAP Secretariat, Deputy Head of a Department of the CIS Executive Committee, Azam Usmanov; as well as representatives of the competition authorities of Austria (Natalia Maierhofer), Kazakhstan (Timur Baimukhanov), Ukraine (Elena Shevchuk), Bulgaria (Georgy Manolov), Azerbaijan (Matin Badalov) and the FAS Department for Control over Social Sphere and Trade (Timophey Nizhegorodtsev and Nadezhda Sharavskaya).

The group discussed some important methodological issues of defining pharmaceutical markets, analyzing drug prices in the CIS and on the relevant markets of the countries, particular, members of the European Union, and the issues related to preparing a Review on the state of competition on the pharmaceutical markets of the CIS member-states.

Regarding an issue of defining product boundaries of pharmaceutical markets, a representative of the Italian Competition Authority, Luca Arnaudo, pointed out that Italy recognizes substitute drugs that have the same international non-proprietary name as well as drugs with different molecules but with the same therapeutic effect and mode of action. In this case, product boundaries of the market are defined as the market of drugs for treating a particular disease.

Italian Competition Authority focuses its attention mainly on eliminating attempts of “Big Pharmaceuticals” (transnational companies, the aggregate income of which exceeds \\$1trillion per year) not to allow generics to the market. “It is better to open markets for generics and prices will go down”, commented Luca Arnaudo.

Specifics of analysis of pharmaceutical markets and antimonopoly enforcement practice were given in a report of Natalia Maierhofer – a representative of Austria’s Competition Authority. As an example, she discussed a case initiated against “AstraZeneca” for abusing market dominance, where Austria’s antimonopoly body focuses only on market entry barriers that lead to unreasonably high prices.

Therefore, FAS proposed to carry out joint investigations upon facts of antimonopoly violations by preventing market entry and analyzing the reasons for absence of generics on pharmaceutical markets when patents for original drugs are terminated.

Participants supported the criteria for choosing drugs put forward by FAS, which will be in the centre of attention of CIS member-states: criteria of the biggest budget expenses, monopolistic prices, importance, demand and comparability. Currently, for the purposes of analysis 24 drugs are selected, which do not have registered analogues on the pharmaceutical market in Russia and are produced by the largest companies in the world.

In the course of the discussion, participants agreed with a proposal of Timur Baimukhanov, Deputy Chairman of the Agency of the Republic of Kazakhstan for Competition Protection, on the mechanisms and measures for analyzing prices on pharmaceutical markets of the CIS member-states. Ukraine’s experience on compiling a list of analyzed drugs based on agreed criteria as well as antimonopoly investigation practice is also quite important (Elena Shevchuk).

“It was a positive exchange of experience between competition authorities of the countries – members of the European Union and the CIS, which will be used in national and international investigations and taken into account drafting a report on the state of competition on the pharmaceutical markets of the CIS member-states”, Deputy Head of FAS Anatoly Golomolzin commented the outcome of the meeting.

The first joint meeting of the Working Group on competition in the pharmaceutical sector (co-chaired by FAS Russia and Italy’s Competition Authority) and the Headquarters for Joint Investigations of Violations of Antimonopoly Law of the CIS Member-States took place on 13th September 2012 in Kazan.