ACM closes investigation into AstraZeneca

The Netherlands Authority for Consumers and Markets (ACM) has carried out an investigation into the large price difference between the price that international pharmaceutical company AstraZeneca asked for heart burn drug Nexium sold inside hospitals, and the price for the same drug when sold outside of hospitals. AstraZeneca offered Nexium to Dutch hospitals at a deep discount whereas patients outside of hospitals had to pay a much higher price when buying them at pharmacies.

ACM suspected that AstraZeneca offered this drug to hospitals at below cost price in order to make it unattractive for certain competitors to enter the market. These competitors offer cheaper heart burn drugs (generic versions) outside of hospitals. Patients tend to continue to use the same brand that they had been given by their hospitals, and GPs are inclined to prescribe the same brand, too. ACM suspected that, as a result thereof, AstraZeneca faced little competition. AstraZeneca was thus able to offer Nexium at much higher prices outside of hospitals. This way, the losses incurred by offering Nexium to hospitals at a deep discount could thus be offset.

As it has not sufficiently been determined in this case that AstraZeneca enjoyed a dominant position, no violation of the Dutch Competition Act has been established. It could not be established that a sufficiently substantial group of patients that were prescribed the expensive branded drug Nexium outside of hospitals could also have benefited from a cheaper, generic version of the drug.