Excessive Pricing Doctrine in the Pharmaceutical Sector: The Space for Reform

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This chapter reflects on the evolution of competition law jurisprudence regarding the excessive pricing of pharmaceutical products, and suggests areas where improvements might be considered. This includes, first, establishing per se rules regarding pricing increases that might be considered excessive based on cost-plus baselines. This would facilitate the work of competition authorities and shorten prosecution timelines. The second set of improvements would involve identifying an appropriate methodology by which to determine reasonable baseline or normal prices to compare with the prices actually 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.