Notícias setor farmacêutico Austrália

Caso Alkaloids of Australia

 Doc1(https://www.accc.gov.au/media-release/alkaloids-of-australia-and-its-
former-export-manager-sentenced-in-criminal-price-fixing-
cartel#:~:text=The%20Court%20heard%20Mr%20Joyce,the%20economy%20a
s%20a%20whole.%E2%80%9D)
 Doc2(https://www.accc.gov.au/media-release/criminal-cartel-charges-laid-
against-pharmaceutical-ingredient-company-and-its-former-export-manager)
 Doc3(https://www.australiancompetitionlaw.info/cases/cdpp-v-alkaloids-of-
australia#:~:text=Following%20an%20ACCC%20investigation%20and,called%
20the%20Trade%20Practices%20Act.)
Caso Pfizer

 Doc1(https://www.accc.gov.au/media-release/accc-unsuccessful-in-appeal-
against-pfizer)
 Doc2(https://www.accc.gov.au/media-release/accc-takes-action-against-pfizer-
australia-for-alleged-anti-competitive-conduct)
 Doc3(https://www.corrs.com.au/insights/power-and-purpose-protecting-a-
competitive-position-after-accc-v-pfizer-ii)
Caso Juno Pharmaceuticals Pty Ltd, Natco Pharma Ltd, Celgene Corporation,
and Celgene Pty Ltd

 Doc1(https://www.accc.gov.au/public-registers/authorisations-and-notifications-
registers/authorisations-register/juno-pharmaceuticals-pty-ltd-
ors#:~:text=Description%20of%20Conduct,document%20below%20for%20furth
er%20details.)
 Doc2(https://www.accc.gov.au/system/files/public-
registers/documents/Submission%20by%20RonaiPalombi%20-
%2029.04.22%20-%20PR%20-%20AA1000592%20Juno%20%26%20Ors.pdf)
 Doc3(https://www.dlapiper.com/en/insights/publications/2022/09/deterring-
payfordelay-juno-pharmaceuticals-pty-ltd-ors)
04/04/2025, 09:18 Alkaloids of Australia and its former export manager sentenced in criminal price fixing cartel | ACCC

AU S TR A LI A N
CO MP E TITIO N
& C O NS UM E R
C O MMI S S IO N

Alkaloids of Australia and its former export

manager sentenced in criminal price fixing cartel

Date
29 November 2022

Topics

Competition and exemptions Compliance and enforcement

The Federal Court has sentenced a family-owned Australian pharmaceutical company and its former export manager for engaging in criminal
cartel conduct, following a criminal prosecution by the Commonwealth Director of Public Prosecutions, that arose from an investigation by the
ACCC.

Alkaloids of Australia, which produces scopolamine N-butylbromide (SNBB), the active pharmaceutical ingredient used in common anti-
spasmodic medications, was convicted and fined $1,987,500.

Its former export manager, Christopher Kenneth Joyce, was also convicted and was sentenced to two years and eight months’ imprisonment to
be served as an intensive corrections order, including 400 hours of community service.

Mr Joyce was also disqualified from managing corporations for five years and fined $50,000.

In late-2021, Mr Joyce and Alkaloids of Australia pleaded guilty to three criminal charges, and admitted to a further seven offences, in respect of
making, attempting to make, and giving effect to several cartel arrangements with overseas pharmaceutical ingredient suppliers that involved
price fixing, bid rigging, output restriction and market allocation.

The Court took into account Mr Joyce and Alkaloids of Australia’s early guilty pleas in sentencing.

“We welcome these outcomes, which should serve as a strong reminder that criminal cartel conduct is a serious offence attracting serious
consequences, including significant fines, banning orders, and imprisonment for individuals,” ACCC Commissioner Liza Carver said.

“The sentence imposed on Mr Joyce is the longest sentence of imprisonment imposed on an individual under the criminal cartel laws so far.”

The charges relate to seven years of cartel conduct in the period from July 2009, when criminal cartel laws came into force in Australia.

“This was a particularly concerning and serious case of cartel conduct by Alkaloids of Australia over a sustained period which included price
fixing that had worldwide impact,” Ms Carver said.

The Court heard Mr Joyce (on behalf of Alkaloids of Australia) regularly met at industry conventions and communicated via email and phone
with competing manufacturers of SNBB around the world and agreed to fix the minimum price for SNBB, to allocate customers between each
other and to arrange what price would be quoted to customers to ensure a particular manufacturer won the sale.

In addition, Mr Joyce (on behalf of Alkaloids of Australia) attempted to induce competing SNBB manufacturers to limit the production of SNBB
and/or its precursor plant, Duboisia, which is grown in Australia.

“Alkaloids of Australia produces and supplies an active ingredient derived from a plant predominantly grown and processed in the Kingaroy
region in Queensland and exported for use in medications globally, so the cartel conduct potentially increased prices for consumers and
businesses around the world,” Ms Carver said.

“Investigating serious cartels remains an important priority for us, because of the harm such anti-competitive conduct has on consumers, other
businesses, and the economy as a whole.”
https://www.accc.gov.au/media-release/alkaloids-of-australia-and-its-former-export-manager-sentenced-in-criminal-price-fixing-cartel#:~:text=The Court heard Mr Joyce,the economy as a whole.” 1/3
04/04/2025, 09:18 Alkaloids of Australia and its former export manager sentenced in criminal price fixing cartel | ACCC

Background
Alkaloids of Australia is a pharmaceutical ingredient company that produces and supplies SNBB (scopolamine N-butylbromide, also known as
hyoscine butylbromide), which is an active pharmaceutical ingredient in antispasmodic medications taken to relieve stomach pain and bowel
cramps. The company is based in Queensland.

SNBB is manufactured from the Duboisia plant, which is native to Australia. Duboisia plants are grown commercially in and around Kingaroy in
Queensland for the pharmaceutical industry. SNBB is produced in Australia and the medications are then imported into Australia as a final
product.

On 1 December 2020, Alkaloids of Australia and its former export manager, Christopher Joyce were charged with criminal cartel offences under
the Competition and Consumer Act, formerly called the Trade Practices Act, following an ACCC investigation.

On 26 October 2021 and 16 November 2021 respectively, Christopher Joyce and Alkaloids of Australia each pleaded guilty to three charges, and
admitted guilt in respect of seven further offences, relating to conduct in respect of cartel arrangements between Alkaloids of Australia and
other SNBB suppliers.

Note to editors
A cartel exists when businesses agree to act together instead of competing with each other. Conduct can include price fixing, sharing markets,
rigging bids and controlling the output or limiting the amount of goods and services. More information on cartel conduct can be found on the
ACCC’s website at Cartels.

The ACCC investigates cartel conduct, manages the immunity process and, in respect of civil cartel contraventions, takes proceedings in the
Federal Court.

The CDPP is responsible for prosecuting criminal cartel offences in accordance with the Prosecution Policy of the Commonwealth. The ACCC
refers serious cartel conduct to the CDPP for consideration of prosecution in accordance with the Memorandum of Understanding between the
CDPP and the ACCC regarding Serious Cartel Conduct.

For corporations, the maximum fine for each criminal cartel offence before 9 November 2022 is the greater of:

$10 million,

three times the total benefits that have been obtained and are reasonably attributable to the commission of the offence, or

if the total value of the benefits cannot be determined,10 per cent of the corporation’s annual turnover connected with Australia.

An individual convicted of a criminal cartel offence before 9 November 2022 may be sentenced to up to 10 years’ imprisonment or fined up to
$444,000, or both.

The maximum fines and civil penalties for cartel conduct by corporations were substantially increased with effect from 9 November 2022, by
legislation passed by Parliament in October.

Anyone who thinks they may be involved in cartel conduct is urged to call the ACCC Cartel Immunity Hotline on (02) 9230 3894. More
information about the immunity process is available on the ACCC website at Cartels.

You can report suspected cartel conduct by using the anonymous cartel portal.

Use this form to make a general enquiry.

Release number
167/22

General enquiries
Contact us to report an issue or make an enquiry.

Media enquiries
Media Team - 1300 138 917, [email protected]

https://www.accc.gov.au/media-release/alkaloids-of-australia-and-its-former-export-manager-sentenced-in-criminal-price-fixing-cartel#:~:text=The Court heard Mr Joyce,the economy as a whole.” 2/3

04/04/2025, 09:20 Criminal cartel charges laid against pharmaceutical ingredient company and its former export manager | ACCC

AU S TR A LI A N
CO MP E TITIO N
& C O NS UM E R
C O MMI S S IO N

Criminal cartel charges laid against

pharmaceutical ingredient company and its
former export manager

Date
1 December 2020

Topics

Competition and exemptions Compliance and enforcement

Alkaloids of Australia Pty Ltd and its former export manager, Christopher Kenneth Joyce, have each been charged with 33 criminal cartel
offences, contrary to the Competition and Consumer Act 2010, formerly the Trade Practices Act 1974, following a criminal investigation by the
ACCC.

The matters will be prosecuted by the Commonwealth Director of Public Prosecutions (CDPP).

Alkaloids of Australia produces and supplies the active pharmaceutical ingredient SNBB (scopolamine N-butylbromide, also known as hyoscine
butylbromide), which is the active pharmaceutical ingredient in antispasmodic medications taken to relieve stomach pain and bowel cramps.

The ACCC alleges that Alkaloids of Australia and other overseas suppliers of SNBB made and gave effect to arrangements to fix prices, restrict
supply, allocate customers and/or geographical markets, and/or to rig bids for the supply of SNBB to international manufacturers of generic
antispasmodic medications.

The allegations extend over a period of almost 10 years, beginning on 24 July 2009, when criminal cartel laws came into force in Australia.

“Cartel conduct, such as price fixing, market and customer allocation, and bid rigging, is a very serious breach of the law,” ACCC Chair Rod Sims
said.

“The specific purpose of most cartels is to increase the profits of the cartel members by agreeing to act together instead of competing with
each other.”

“We are committed to pursuing cartel conduct allegations, in order to protect businesses and consumers from the economic harm of such
conduct,” Mr Sims said.

The matter is listed in the Downing Centre Local Court on 19 January 2021.

Background
Alkaloids of Australia is a company which produces active pharmaceutical ingredients, based in Queensland and NSW.

SNBB is manufactured from the Duboisia plant, which is native to Australia. Duboisia plants are grown commercially for the pharmaceutical
industry in and around Kingaroy in Queensland. SNBB is produced in Australia and exported for use in antispasmodic medications. The
medications are then imported into Australia as a final product.

Note to editors
The ACCC investigates cartel conduct, manages the immunity process and, in respect of civil cartel contraventions, takes proceedings in the
Federal Court.

https://www.accc.gov.au/media-release/criminal-cartel-charges-laid-against-pharmaceutical-ingredient-company-and-its-former-export-manager 1/2
04/04/2025, 09:20 Criminal cartel charges laid against pharmaceutical ingredient company and its former export manager | ACCC

The CDPP is responsible for prosecuting criminal cartel offences in accordance with the Prosecution Policy of the Commonwealth. The ACCC
refers serious cartel conduct to the CDPP for consideration of prosecution in accordance with the Memorandum of Understanding between the
CDPP and the ACCC regarding Serious Cartel Conduct.

For corporations, the maximum fine for each criminal cartel offence is the greater of:

$10 million

three times the total benefits that have been obtained and are reasonably attributable to the commission of the offence, or

if the total value of the benefits cannot be determined, 10 per cent of the corporation’s annual turnover connected with Australia.

An individual convicted of a criminal cartel offence may be sentenced to up to 10 years’ imprisonment or fined up to $420,000, or both.

Anyone with information about cartel conduct is urged to call the ACCC Cartel Hotline on (02) 9230 3894.

General enquiries
Contact us to report an issue or make an enquiry.

Media enquiries
Media Team - 1300 138 917, [email protected]

Keep up-to-date on the latest media releases from the ACCC via email updates.

Subscribe to media releases

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04/04/2025, 09:22 CDPP v Alkaloids of Australia — Australian Competition Law

Home News Law Legislation Cases

Australian Competition Law
Reading room Reports Other About 🔎︎

CDPP v Alkaloids of Australia

Commonwealth Director of Public Prosecutions v Alkaloids of Australia Pty Ltd [2022]
FCA 1424 (sentencing)

Commonwealth Director of Public Prosecutions v Joyce [2022] FCA 1423 (conviction

and sentence)

Facts and summary

Snapshot On 1 December 2020 criminal cartel charges were been

laid against pharmaceutical ingredient company,
Federal Court Alkaloids of Australia Pty Ltd, and its former export
(Alkaloids) manager, Christopher Kenneth Joyce. Each were been
charged with 33 criminal offences.
Year
2022 The ACCC alleges Alkaloids of Australia and overseas
suppliers of the ingredient SNBB (hyoscine
File number
butylbromide) ‘made and gave effect to arrangements
NSD1196/2021
https://www.australiancompetitionlaw.info/cases/cdpp-v-alkaloids-of-australia#:~:text=Following an ACCC investigation and,called the Trade Prac… 1/10
04/04/2025, 09:22 CDPP v Alkaloids of Australia — Australian Competition Law

Judge to fix prices, restrict supply, allocate customers and/or

Justice geographical markets, and/or to rig bids for the supply
Abraham of SNBB to international manufacturers of generic
antispasmodic medications’ over a period of almost 10
Sentence
years.
hearing
5 Sept 2022 The matter will be prosecuted by the Commonwealth
Director of Public Prosecutions and was first listed in the
Federal Court Downing Centre Local Court for 19 January 2021.
(Joyce)
On 26 October 2021 Christopher Kenneth Joyce

Year pleaded guilty to criminal cartel conduct and was

2021 committed to the Federal Court of Australia for

sentence. Joyce was convicted and sentenced to 32
File number months imprisonment (to be served by way of
NSD1149/2021 intensive correction in the community), a fine of
$50,000 and disqualification from managing
Judge
Justice corporations until 29 November 2027.

Abraham
In November 2021 Alkaloids of Australia pleaded guilty

Sentence to cartel conduct. They were convicted and fined a

total of AU$1,887,500.
hearing
8 November
2022 ACCC media release

Local Court Criminal cartel charges laid against

pharmaceutical ingredient company and its

Year former export manager

2020
1 December 2020

Court
Alkaloids of Australia Pty Ltd and its former export
Sydney
manager, Christopher Kenneth Joyce, have each
Downing
been charged with 33 criminal cartel offences,
Centre
contrary to the Competition and Consumer Act

First 2010, formerly the Trade Practices Act 1974,

appearance following a criminal investigation by the ACCC.

https://www.australiancompetitionlaw.info/cases/cdpp-v-alkaloids-of-australia#:~:text=Following an ACCC investigation and,called the Trade Prac… 2/10

04/04/2025, 09:22 CDPP v Alkaloids of Australia — Australian Competition Law

19 January The matters will be prosecuted by the

2021 Commonwealth Director of Public Prosecutions
(CDPP).
Issues
Cartel Alkaloids of Australia produces and supplies the
conduct active pharmaceutical ingredient SNBB
(scopolamine N-butylbromide, also known as
Charge date
hyoscine butylbromide), which is the active
1 December
pharmaceutical ingredient in antispasmodic
2020
medications taken to relieve stomach pain and
Guilty Plea bowel cramps.

(Joyce)
The ACCC alleges that Alkaloids of Australia and
25 October
other overseas suppliers of SNBB made and gave
2021
effect to arrangements to fix prices, restrict

Prosecutor supply, allocate customers and/or geographical

Commonwe markets, and/or to rig bids for the supply of SNBB

alth Director to international manufacturers of generic

of Public antispasmodic medications.

Prosecution
The allegations extend over a period of almost 10
Accused years, beginning on 24 July 2009, when criminal
Alkaloids of cartel laws came into force in Australia.

Australia Pty
“Cartel conduct, such as price fixing, market and
Ltd
customer allocation, and bid rigging, is a very
Christopher
serious breach of the law,” ACCC Chair Rod Sims
Kenneth
said.
Joyce
“The specific purpose of most cartels is to
Copyright
increase the profits of the cartel members by
ACCC agreeing to act together instead of competing
media with each other.”

release
“We are committed to pursuing cartel conduct
©
allegations, in order to protect businesses and
Commonwe
consumers from the economic harm of such
alth of
conduct,” Mr Sims said.

https://www.australiancompetitionlaw.info/cases/cdpp-v-alkaloids-of-australia#:~:text=Following an ACCC investigation and,called the Trade Prac… 3/10

04/04/2025, 09:22 CDPP v Alkaloids of Australia — Australian Competition Law

Australia The matter is listed in the Downing Centre Local

2020, 2021 Court on 19 January 2021.

ACCC Media Background

release
Alkaloids of Australia is a company which
sourced
produces active pharmaceutical ingredients,
from the
based in Queensland and NSW.
ACCC
website and SNBB is manufactured from the Duboisia plant,
reproduced which is native to Australia. Duboisia plants are
pursuant to grown commercially for the pharmaceutical
Creative industry in and around Kingaroy in
Commons Queensland. SNBB is produced in Australia and
By exported for use in antispasmodic medications.
Attribution The medications are then imported into Australia
3.0 Australia as a final product.
licence as
Note to editors
specified on
the ACCC The ACCC investigates cartel conduct, manages
copyright the immunity process and, in respect of civil cartel
page. contraventions, takes proceedings in the Federal
Court.
Copyright
Case The CDPP is responsible for prosecuting criminal
extracts cartel offences in accordance with the
reproduced Prosecution Policy of the Commonwealth. The
pursuant to ACCC refers serious cartel conduct to the CDPP
the Federal for consideration of prosecution in accordance
Court's with the Memorandum of Understanding between
copyright the CDPP and the ACCC regarding Serious Cartel
notice: FCA Conduct.
Copyright
Page, For corporations, the maximum fine for each

permitting criminal cartel offence is the greater of:

reproduction
• $10 million
of case
material.

https://www.australiancompetitionlaw.info/cases/cdpp-v-alkaloids-of-australia#:~:text=Following an ACCC investigation and,called the Trade Prac… 4/10

04/04/2025, 09:22 CDPP v Alkaloids of Australia — Australian Competition Law

Text sourced • three times the total benefits that have been
from official obtained and are reasonably attributable to
the commission of the offence, or

• if the total value of the benefits cannot be

determined, 10 per cent of the corporation’s
annual turnover connected with Australia.

An individual convicted of a criminal cartel

offence may be sentenced to up to 10 years’
imprisonment or fined up to $420,000, or both.

Local Court Alkaloids of Australia Pty Ltd

In November 2021 Alkaloids of Australia Pty Ltd has

pleaded guilty to three charges of criminal cartel
conduct and has admitted a further seven offences.
The conduct involved price fixing, bid rigging and
market allocation arrangements with overseas
pharmaceutical ingredient suppliers.

View ACCC media release.

Christopher Joyce

Christopher Joyce pleaded guilty on 26 October 2021

and was committed to the Federal Court of Australia
for sentencing.

ACCC media release

26 October 2021

Christopher Kenneth Joyce, the former export

manager of pharmaceutical ingredient company
Alkaloids of Australia Pty Ltd, has today pleaded
guilty to criminal cartel conduct in Sydney’s
Downing Centre Local Court.
https://www.australiancompetitionlaw.info/cases/cdpp-v-alkaloids-of-australia#:~:text=Following an ACCC investigation and,called the Trade Prac… 5/10
04/04/2025, 09:22 CDPP v Alkaloids of Australia — Australian Competition Law

Following an ACCC investigation and referral to

the Commonwealth Director of Public
Prosecutions (CDPP), on 1 December 2020
Alkaloids of Australia and Christopher Joyce were
charged with criminal cartel offences under the
Competition and Consumer Act, formerly called
the Trade Practices Act.

Alkaloids of Australia produces and supplies SNBB

(scopolamine N-butylbromide), which is an active
pharmaceutical ingredient in antispasmodic
medications.

Earlier today, Christopher Joyce pleaded guilty to

three charges, and admitted his guilt in respect of
seven further offences, relating to his conduct
involving price fixing, bid rigging and market
allocation cartel arrangements between Alkaloids
of Australia and other overseas SNBB suppliers.

The price fixing charges to which Christopher

Joyce has pleaded guilty extend over a period of
about eight years from July 2009, when criminal
cartel laws came into force in Australia.

“This is the first guilty plea by an individual to

criminal cartel conduct under the criminal cartel
laws,” ACCC Chair Rod Sims said.

Christopher Joyce has been committed to the

Federal Court of Australia for sentence, and the
matter is next listed for a case management
hearing on 10 November 2021.

The proceedings against Alkaloids of Australia are

continuing.

Alkaloids of Australia is yet to enter pleas to the

criminal cartel charges it is facing. That matter is

https://www.australiancompetitionlaw.info/cases/cdpp-v-alkaloids-of-australia#:~:text=Following an ACCC investigation and,called the Trade Prac… 6/10

04/04/2025, 09:22 CDPP v Alkaloids of Australia — Australian Competition Law

listed in the Downing Centre Local Court on 9

November 2021.

As these matters are currently before the court,

the ACCC will not be providing further comment
at this time.

Background

Alkaloids of Australia is a company which

produces active pharmaceutical ingredients,
based in Queensland and NSW.

SNBB (scopolamine N-butylbromide, also known

as hyoscine butylbromide) is the active
pharmaceutical ingredient in antispasmodic
medications taken to relieve stomach pain and
bowel cramps.

SNBB is manufactured from the Duboisia plant,

which is native to Australia. Duboisia plants are
grown commercially in and around Kingaroy in
Queensland for the pharmaceutical industry.

SNBB is produced in Australia and the

medications are then imported into Australia as a
final product.

Note to editors

The ACCC investigates cartel conduct, manages

the immunity process and, in respect of civil cartel
contraventions, takes proceedings in the Federal
Court.

The CDPP is responsible for prosecuting criminal

cartel offences in accordance with the
Prosecution Policy of the Commonwealth. The
ACCC refers serious cartel conduct to the CDPP
for consideration of prosecution in accordance

https://www.australiancompetitionlaw.info/cases/cdpp-v-alkaloids-of-australia#:~:text=Following an ACCC investigation and,called the Trade Prac… 7/10

04/04/2025, 09:22 CDPP v Alkaloids of Australia — Australian Competition Law

with the Memorandum of Understanding between

the CDPP and the ACCC regarding Serious Cartel
Conduct.

An individual convicted of a criminal cartel

offence may be sentenced to up to 10 years’
imprisonment or fined up to $444,000, or both.

Anyone with information about cartel conduct is

urged to call the ACCC Cartel Hotline on (02) 9230
3894.

Release number:

164/21

Federal Court

Alkaloids of Australia Pty Ltd

CDPP v Alkaloids of Australia Pty Ltd

NSD1196/2021
Filing date: 17 November 2021

Convicted and fined a total of AU$1,887,500.

Christopher Joyce

CDPP v Christopher Kenneth Joyce

NSD1149/2021
Filing date: 3 November 2021

Joyce was convicted and sentenced to 32 months imprisonment (to be served

by way of intensive correction in the community), a fine of $50,000 and
disqualification from managing corporations until 29 November 2027.

https://www.australiancompetitionlaw.info/cases/cdpp-v-alkaloids-of-australia#:~:text=Following an ACCC investigation and,called the Trade Prac… 8/10

04/04/2025, 09:26 ACCC unsuccessful in appeal against Pfizer | ACCC

AU S TR A LI A N
CO MP E TITIO N
& C O NS UM E R
C O MMI S S IO N

ACCC unsuccessful in appeal against Pfizer

Date
25 May 2018

Topics

Competition and exemptions Compliance and enforcement

The Full Court of the Federal Court of Australia has dismissed an appeal by the ACCC against an earlier judgment in relation to Pfizer Australia
Pty Ltd (Pfizer).

The ACCC alleged that Pfizer breached the Competition and Consumer Act 2010 by misusing its market power to prevent or deter competition
from other suppliers selling generic atorvastatin products to pharmacies, and engaged in exclusive dealing conduct for the purpose of
substantially lessening competition, when offering to supply atorvastatin to community pharmacies.

“The ACCC brought this appeal because it was concerned that Pfizer’s use of its market position as supplier of the top selling branded
atorvastatin immediately before generic products were able to enter the market harmed the competitive process and therefore consumers,”
ACCC Chairman Rod Sims said.

“Over a million Australians rely on the drug atorvastatin to keep their cholesterol levels down.”

“The ACCC is carefully considering the judgment.”

“The ACCC remains committed to pursuing cases involving anti-competitive conduct, particularly misuse of market power, because of the harm
that can be caused to the competitive process and ultimately to consumers,” Mr Sims said.

Background
In early 2012, Pfizer offered significant discounts and the release of rebates accrued on previous sales of Lipitor to pharmacies. Pfizer’s offer
was conditional upon pharmacies acquiring a minimum volume of Pfizer’s generic atorvastatin and agreeing to restrict their re-supply of
competing genetic atorvastatin products.

The ACCC instituted proceedings against Pfizer in February 2014.

The ACCC alleged that Pfizer misused its position as a patent holder of atorvastatin to prevent or deter competition from other suppliers selling
generic atorvastatin products to pharmacies.

The ACCC also alleged Pfizer’s conduct was for the purpose of substantially lessening competition in the market for atorvastatin.

The trial took place in October 2014 and judgment at first instance was given on 25 February 2015.

The appeal was heard by the Full Federal Court in November 2015.

Section 46 of the Competition and Consumer Act 2010 was amended by Parliament effective 6 November 2017. The ACCC took action against
Pfizer using the pre-amendment section 46, which required a business with substantial market power to take advantage of its market power for
a specified anti-competitive purpose.

Release number
94/18

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04/04/2025, 09:27 ACCC takes action against Pfizer Australia for alleged anti-competitive conduct | ACCC

AU S TR A LI A N
CO MP E TITIO N
& C O NS UM E R
C O MMI S S IO N

ACCC takes action against Pfizer Australia for

alleged anti-competitive conduct

Date
13 February 2014

Topics

Competition and exemptions Compliance and enforcement

The Australian Competition and Consumer Commission has instituted proceedings in the Federal Court of Australia against Pfizer Australia Pty
Ltd (Pfizer) for alleged misuse of market power and exclusive dealing in relation to its supply of atorvastatin to pharmacies in contravention of
the Competition and Consumer Act 2010.

Atorvastatin is a pharmaceutical product used to lower cholesterol and Pfizer’s originator brand of atorvastatin, Lipitor, was for a number of
years the highest selling prescription medicine under the Pharmaceutical Benefits Scheme.

Prior to the loss of patent protection in May 2012, Lipitor was prescribed to over one million Australians, with annual sales exceeding $700m.

The ACCC’s allegations relate to offers made by Pfizer to pharmacies in early 2012 for the supply of Lipitor and Pfizer’s own generic atorvastatin
product.

The ACCC alleges that Pfizer offered significant discounts and the payment of rebates previously accrued on sales of Pfizer’s Lipitor,
conditional on pharmacies acquiring a minimum volume of up to 12 months’ supply of Pfizer’s generic atorvastatin product

The offers were first made prior to Pfizer’s loss of patent protection for the atorvastatin molecule, when other suppliers of generic medicines
were prevented from making competing offers to supply a generic atorvastatin product to pharmacies.

“The ACCC alleges that Pfizer engaged in this conduct for the purpose of deterring or preventing competitors in the market for atorvastatin from
engaging in competitive conduct, as well as for the purpose of substantially lessening competition,” ACCC Chairman Rod Sims said.

“Deterring anti-competitive conduct is an ACCC enforcement priority because of the harm that it can cause to the competitive process and
ultimately to consumers, particularly with such a widely used product.”

“This case also raises an important public interest issue regarding the conduct of a patent holder nearing the expiry of that patent and what
constitutes permissible competitive conduct,” Mr Sims said.

The ACCC is seeking pecuniary penalties, declarations and costs.

A directions hearing has been set for 9.30am on 18 March 2014 in the Federal Court, Sydney.

Release number
NR 020/14

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Power and purpose:

Protecting a competitive position after ACCC v Pfizer

(II)

31 July 2018

Summar y

On 25 May 2018, in ACCC v Pfizer,[1] the Full Cour t confirmed that a patent owner with

substantial market power may not necessarily be acting with an anti-competitive purpose if it

seeks to protect its market position when faced with significant competitive threats in the lead

up to patent expir y. On 25 June 2018, the ACCC announced that it had sought special leave to

the High Cour t.

Australia’s competition law has changed since the matter was brought and decided by two

Cour ts, and the case may yet be heard by the High Cour t. However, the judgment provides

some clarity on the issue of anti-competitive purpose. This is a central issue in pharmaceutical

markets, where originator pharmaceutical companies continue to search for new ways to

protect assets in which they have made substantial investments as patent expir y approaches.

When will an originator with a product approaching a ‘patent cliff’ retain sufficient market

power to contravene Australia’s competition law, and how should its actions to protect its

competitive advantage be assessed?

Background to Cour t action

For over a decade, Pfizer ’s cholesterol lowering drug, Lipitor (molecule: ator vastatin), was the

biggest-selling drug in the world. By the end of 2011, Lipitor was the highest selling drug in

Australia in terms of both volume and value under the Pharmaceutical Benefits Scheme (PBS).

Pfizer ’s patent over Lipitor gave it the exclusive right to supply ator vastatin in Australia until 18

May 2012. The patent expir y date was well known to, and a major event for, Pfizer and generic

pharmaceutical suppliers.

The matter concerns Pfizer ’s attempts between 2011 and 2012 to combat the likely “erosion”

of Lipitor ’s market share after patent expir y. In late 2010, Pfizer recognised that from early

2012 its marketing strategies would have to accommodate the inevitable switching of patients

from Lipitor to generic ator vastatin.

To avoid being “slaughtered” in the market, Pfizer took a number of steps including:

the establishment in Januar y 2011 of a supply model which involved Pfizer supplying

pharmacies directly (rather than through wholesalers);

the establishment in Januar y 2011 of an accrual funds scheme whereby Pfizer set aside a

percentage of the price of purchases of Pfizer products (including Lipitor) to be rebated to

pharmacies on terms to be announced at a later date (and not known by the pharmacies at

the date of accrual);

in Januar y 2012, making a bundled offer to pharmacies of Lipitor and generic ator vastatin,

which Pfizer called ator vastatin Pfizer. This bundled offer tied the accrual funds scheme

rebates to the quantity of Lipitor and ator vastatin Pfizer purchased by pharmacies. The

more ator vastatin Pfizer purchased, the greater the propor tion of the release of the

pharmacy ’s accrual funds. Discounts on the price of ator vastatin Pfizer and Lipitor were

also offered, dependent on the conversion rate from Lipitor to ator vastatin Pfizer.

Contraventions

The ACCC pleaded broadly the same case before the Full Cour t as it did before the primar y

judge.

The ACCC claimed that the above conduct contravened s 46(1)(c) of the Competition and

Consumer Act 2010 (Cth) (CCA) by taking advantage of the substantial degree of market

power which the ACCC alleged that Pfizer held in the market for the supply of ator vastatin to

pharmacies (ator vastatin market) for an anti-competitive purpose, namely deterring or

preventing generic manufacturers from engaging in competitive conduct.

In addition, the ACCC claimed that Pfizer had engaged in the practice of exclusive dealing

within the meaning of section 47 CCA by requiring pharmacies who wished to acquire

ator vastatin Pfizer also to purchase specified quantities of Lipitor, contravening a number of

sub-sections of section 47 CCA. Section 47 CCA provides that exclusive dealing of this type is

prohibited only if it is has the purpose or likely effect of substantially lessening competition.

The ACCC ran its section 47 case as a “purpose” case and not as a “likely effect” case.
Full Cour t’s judgment

The Full Cour t accepted the ACCC’s arguments in par t. Foster, Greenwood and Middleton JJ

concluded that:

unlike the primar y judge, who found that by Januar y 2012 Pfizer no longer had a

substantial degree of market power, in both Januar y and Februar y 2012, when the

bundled offers were made, Pfizer did retain a substantial degree of market power;

the primar y judge was correct when he found that in 2010 and 2011, when Pfizer had

market power, it took advantage of that market power by implementing the direct supply

model and establishing the accrual funds scheme. However, the primar y judge erred in

concluding that in making the bundled offers in Januar y and Februar y 2012, Pfizer would

not have taken advantage of its market power had any sur vived at that stage; and

impor tantly, the primar y judge was correct that, at no time, did Pfizer act with an anti-

competitive purpose.

Market power on the edge of a ‘patent cliff’

In finding that Pfizer continued to maintain substantial market power in Januar y and Februar y

2012, the Full Cour t clarified that even the prospect of “significant potential competition” from

generic manufacturers, ahead of the expir y of the patent over the biggest drug on the market,

was not enough to diminish the originator ’s substantial market power at that stage.

Pfizer ’s ability to introduce its own generic, as par t of a bundled offer in Januar y 2012, without

seriously affecting the price of its Lipitor branded product, was critical to the Cour t’s finding.

The Full Cour t considered that Pfizer ’s behaviour demonstrated that it was not yet constrained

by the future “inevitable” generic competition.

The finding that Pfizer, despite being faced with one of the most anticipated generic launches,

possessed substantial market power until at least around three months before patent expir y

suggests that originators’ market power is likely to subsist until ver y close to patent expir y.

However, as the Cour t did not expressly state that Pfizer retained market power up to the date

of patent expir y, it remains unclear exactly when Pfizer ’s market power diminished and what

level of competitive conduct pre-patent expir y would have been enough to tip the balance of

power away from Pfizer.

Several questions therefore remain.

Is it possible that there are other pharmaceutical markets (for other products) in which

market power would subsist up until the date of patent expir y? These might include

products which are not likely to be subject to such intense launches, products from which

it is medically difficult to switch, ver y low-value products, or ver y high-value products.

This finding highlights that originators will need to pay attention to the “effect” of sharp

commercial practices in the months leading up to patent expir y.

 On one view, as competitive generic entr y could not occur until June 2012 (the PBS listing

date for generic ator vastatin), it may be arguable that Pfizer did not lose substantial

market power until this point in time, shor tly after it lost exclusivity in the market.

A s to what type of launch would count as a competitive threat, the decision suggests that

only PBS launches would suffice. Alternatively, it is arguable that such an approach

ignores the commercial realities of the pharmaceutical market and the bargaining that

occurs between pharmaceutical companies and pharmacies in the months ahead of PBS

listing. In this context, it is possible that market power does not continue to exist

immediately prior to and at the date of patent expir y. However, such a view is at odds with

the monopoly and exclusivity provided by a patent and a decision of the Full Cour t handed

down last year, which held that an offer to supply post-patent expir y can amount to patent

infringement where the offer is made during the term of the patent.[2]

Purpose, “taking advantage” and a new effects test

The Full Cour t confirmed that by their nature direct-to-pharmacy models, the accrual fund

schemes, and the bundled offers could expose no anti-competitive purpose. Most impor tantly

in this regard, the bundling of Lipitor with ator vastatin Pfizer in Januar y and Februar y 2012

was not evidence (of itself) of Pfizer having a proscribed purpose when it did so.

The Full Cour t judgment also confirms that protecting a market position in the face of

competition does not expose an anti-competitive purpose. Even where internal documents

used “offensive” language, such as “blocking” competition, in the circumstances, the Full Cour t

considered that Pfizer ’s actions were “defensive” and it entered into the conduct to prevent

inevitable share “erosion”.

However, “colour ful’ language used in internal documents was persuasive for the ACCC in this

regard. Those “blocking” documents were the focus of the ACCC's case and helped to create

the controversy. While that characterisation found no favour with the primar y judge or Full

Cour t, this does not mean that language is any less impor tant in internal documents after this

case – and hyperbolic language of this type remains risk y.

A s well as determining the purpose of a corporation’s actions, there is now an “effects test” to

contend with. Australian competition law changed substantially in late 2017. The biggest

change was to the unilateral conduct prohibitions. The old market power prohibition stopped

corporations with market power from taking advantage of that power for a prohibited purpose

(deterring entr y or competitive conduct, or harming competitors). Now, the law prohibits

corporations with market power from engaging in conduct with the purpose or effect of

substantially lessening competition.

The Full Cour t considered only the purpose case(s) put before it. However, there are

impor tant takeouts for the new effects test universe. Ator vastatin was a major event for

generic pharmaceutical suppliers. By June 2012, 77% of the ator vastatin market was being

supplied by suppliers of generics.

The Full Cour t considered that, in context, the strategies Pfizer had developed and put in place

were not expected to have effect in the market for ver y long and were not expected to achieve

much more than gaining a “first-mover advantage” for Pfizer. Nothing Pfizer did changed those

circumstances. Nor did it (realistically) expect any change. Similarly to the assessment of

market power above, we question whether there are a range of pharmaceutical products

where generics would not be likely to launch so effectively and intensely. In those

circumstances, a Cour t could easily apply different reasoning to that which the Full Cour t

employed. If “erosion” is expected to be substantially slower, or a position is more easily able

to be defended – would the Full Cour t’s conclusions have been the same under an effects test?

In the same way, an impor tant element under an effects test could be that even though

generics are able to engage in some competitive conduct pre-patent expir y, they cannot

engage in the same conduct, in the same way, as the originator, or launch offers or products at

the same time as the originator. This was a key point for the primar y judge and Full Cour t with

regard to the “taking advantage” test under the old law. In effect, the Cour ts asked whether a

firm without market power in a workably competitive market could have taken the same action

as Pfizer. For the Full Cour t, the answer was “no”.

In these circumstances, could activity directed to obtain a “first mover advantage” (i.e. to get

stock on the shelves of a chemist before other generic manufacturers) have the effect of

substantially lessening competition? Even though the “taking advantage” limb has now been

removed from the law, this context could be impor tant in assessing the effects of similar

conduct.

Where to next?

The ACCC has sought special leave from the High Cour t to appeal the Full Cour t‘s judgment.

“The ACCC is seeking clarity … on how to assess anti-competitive purpose”, said an ACCC

Commissioner.[3] The ACCC is also seeking special leave on the issue of when a

“requirements contract” will amount to exclusive dealing. The assessment of purpose is

complex but well-trodden ground in Australian competition law and four seasoned

competition law judges appear to be in violent agreement as to the nature and application of

the purpose test in this matter. In those circumstances, it will be interesting to see the points of

law on which the ACCC seeks to persuade the High Cour t to grant special leave.

[1] Australian Competition and Consumer Commission v Pfizer Australia Pty Ltd [2018] FCAFC 78. (ACCC v Pfizer)

[2] Warner-Lambert Company LLC v Apotex Pty Limited [2017] FCAFC 58 at [6]-[7].

[3] See https://www.accc.gov.au/media-release/accc-seeks-special-leave-to-appeal-full-federal-cour t%e2%80%99s-

pfizer-judgment.

AUTHORS
04/04/2025, 10:19 Juno Pharmaceuticals Pty Ltd & Ors | ACCC

AU S TR A LI A N
CO MP E TITIO N
& C O NS UM E R
C O MMI S S IO N

Juno Pharmaceuticals Pty Ltd & Ors

Date lodged: 3 December 2021

Status: Completed

Outcome: Withdrawn on 29 July 2022

Description of Conduct
On 3 December 2021, the ACCC received an application for authorisation from Juno Pharmaceuticals Pty Ltd (Juno), Natco Pharma Ltd (Natco),
Celgene Corporation and Celgene Pty Ltd (together, Celgene) (altogether, the Applicants).

The Applicants sought authorisation to enter into, and give effect to, certain operative provisions of a settlement and licence agreement that
would enable Juno and Natco to bring to market generic versions of Revlimid® and Pomalyst® from a specified launch date for each drug. The
Applicants sought authorisation until 2 August 2027, when the last of the relevant Celgene patents is due to expire.

The Applicants sought authorisation to settle a patent dispute before the Federal Court of Australia.

On 23 March 2022, the ACCC issued a draft determination proposing to deny authorisation.

On 27 May 2022, the date by which the ACCC must make a final determination was extended, with the agreement of the Applicants, until 29 July
2022.

On 29 July 2022, the Applicants withdrew their application for authorisation. Please see the ‘Applicants to ACCC re Withdrawal of Application’
document below for further details.

Applicant(s)
Juno Pharmaceuticals Pty Ltd
Celgene Corporation
Natco Pharma Ltd
Celgene Pty Ltd

Authorisation number(s)
AA1000592-1

Applications
Document title Date

Celgene re ACCC media release (PDF 117.31 KB ) 5 Aug 2022

Applicants to ACCC re Withdrawal of Application (PDF 115.19 KB ) 29 Jul 2022

Application Received (PDF 10.11 MB ) 3 Dec 2021

Decisions
Document title Date

Applicants to ACCC re Extension of Statutory Timeframe (PDF 980.26 KB ) 27 May 2022

ACCC to Applicants re Extension of Statutory Timeframe (PDF 151.2 KB ) 27 May 2022

https://www.accc.gov.au/public-registers/authorisations-and-notifications-registers/authorisations-register/juno-pharmaceuticals-pty-ltd-ors#:~:text=Description of Conduct,document below for further details. 1/2

RONAIPALOMBI
BIOTECH MEDICAL PHARMACEUTICAL

29 April 2022

Ms Danielle Staltari
Australian Competition & Consumer Commission
Level 17
2 Lonsdale Street
MELBOURNE VIC 3000
[email protected]
cc: [email protected]; [email protected]

Dear Ms Staltari

Application by Juno / Natco (Authorisation number AA1000592-1) – Draft Determination dated

23 March 2022

We write in response to the Generic and Biosimilar Medicines Association’s (GBMA) submission
dated 8 April, which followed publication of the ACCC’s Draft Determination (the Determination)
proposing to deny authorisation of Application AA100592 from Juno Pharmaceuticals Pty Ltd &
Ors.

We note that of the six submissions made to the ACCC after the Determination was published,
the only one that does not support the Determination is the GBMA’s.

We disagree with several contentions made in the GBMA submission and draw your attention to
the following:

1. While the GBMA represents a number of member companies involved in the business of
supplying generic and biosimilar medicines to the Australian market, it does not represent the
individual commercial interests of any one company, nor does it concern itself with or have
the capacity to provide an independent commercial analysis of an individual company’s
business. Therefore, it is ill equipped as an organisation to assess the impact on competition
in the Australian market of the Agreement and the issues that are the subject of the
Application.

2. The GBMA’s membership includes Juno Pharmaceuticals, one of the parties to the
Application in issue. While we do not suggest that the GBMA’s submission has been unduly
influenced by Juno Pharmaceuticals, it is fair to question whether the GBMA’s support for the
Application may be unintentionally biased.

3. The GBMA submission, in the main, consists of a series of motherhood statements lacking in
specificity.

4. GBMA’s contention that “there would be a potential chilling effect on patent settlements”
adversely impacting competition between originators and generic suppliers, if the ACCC were
to deny this authorisation is, we believe, fundamentally flawed. Patent settlements benefit the
parties involved and deny market entry to other competitors, effectively shutting out
competition.
5. We respectfully submit that the GBMA is wrong to contend that “the existing ARTG
registrations for lenalidomide as [is] indicative of likely entry by a number of other generic
suppliers.” While it is necessary for a medicine to be listed on the ARTG before it can be
legally supplied in Australia, this requirement should not be interpreted as an intention to
market.

6. Our criticism of the GBMA’s contention is fortified by legislation that provides, expressly, that
it is not an act of patent infringement either, to apply for ARTG listing, to have the TGA accept
a medicine for listing on the ARTG, or for a medicine to be listed on the ARTG (see s119A(1)(a)
Patents Act). Furthermore, in a decision of the Full Federal Court in Warner-Lambert Company
LLC v Apotex Pty Limited [2017] FCAFC 58 the Court held that even an application for listing a
medicine on the PBS, of which ARTG listing is a prerequisite, is not an act of patent
infringement. Accordingly, the GBMA’s contention has no basis in fact or law.

7. We respectfully disagree with the GBMA’s contention that: “There are no features of the
agreement that could be expected to result in competitive tension between generic
competitors being diminished. To the contrary, it is more likely that the public nature of the
Applicants' settlement agreement may bring forward the timing of entry by other generic
suppliers.” Clearly, the point raised in the submission filed by Pharmacor dated 6 April
contradicts the GBMA. Pharmacor explains:

“2.7 Under the proposed settlement and licence agreement, Juno will supply its
own separate REMS4 with the result that each prescriber and dispenser of
lenalidomide and pomalidomide products in Australia will need to acquire,
implement, be trained in, operate and maintain two separate REMS software
products - one for Celgene's originator product and one for Juno/Natco's
generic product.

2.8 Pharmacor is particularly concerned that once these two separate software
products have been implemented, are established and have been in operation,
particularly over any significant period of time, to support the risk management
steps required by the TGA in the prescribing and dispensing of these products,
doctors, hospitals and pharmacists will be particularly reluctant to acquire,
establish and operate a third (or any subsequent) REMS for each subsequent
generic product as it becomes available.”

8. The REMS is arguably a barrier to entry in as much as Pharmacor claims “the additional
switching costs, IT interface changes, different user experience, training costs and
administrative burden of operating multiple REMS systems for multiple generics are likely to
raise significant additional barriers to entry for second and subsequent generic sponsors, over
and above the usual factors which give rise to the first generic mover advantage generally.”

9. The GBMA’s contention that “parties to patent settlements … should be entitled to seek
authorisation to mitigate [the risks of patent litigation] where those patent settlements facilitate
early entry and as a result generate net public benefits” is, we respectfully submit, a
generalisation that wrongly asserts that the mere act of generic entry is sufficient to enhance
competition and societal benefit. The statement demonstrates a misunderstanding of the
ACCC’s role. Moreover, it fails to address the concerns expressed by the Productivity
Commission in its IP Arrangements Report, 2016 in which it recommended to the Australian
government that ‘pay-for-delay’ agreements come under the scrutiny of the ACCC (see
Recommendation 10.2 at p329). The Productivity Commission explains:

“The Commission!s preferred option to manage pay-for-delay risks is to

improve monitoring and transparency of settlement agreements to detect any
pay-for-delay arrangements. Where this indicates further action is warranted,
enforcement of existing competition law should be pursued, leaving the
courts to determine the legality of any allegedly anticompetitive agreements.
2
 Monitoring would also improve the "credible threat !of sanction under the
existing regulation, providing a deterrent and potentially reducing the
incidence of pay-for-delay agreements.” (See p 327)

10. While we agree that the entry of generic and biosimilar medicines has the effect of reducing
the price of those medicines consequent to the pricing reforms referred to, whether and to
what extent competition in the market for those medicines is enhanced by such an effect
depends on several variables. One such variable is the patent landscape. By this we mean the
scope of protection afforded by one or more patents that relate to the medicines or medicines
in issue.

11. The idea that the scope of protection provided by patents is dependent upon the operation of
a single patent, particularly in the pharmaceutical sector is naive, and, in the vast majority
cases, simply not true. To the contrary multiple patents and multiple types of patents in
operation over periods of time providing enforceable rights, commencing from a minimum of
20 years, may hinder or prevent competition in the market for specific medicines for periods
significantly more than 20 years. For example, while the expiration of a compound patent ends
the rights of a patentee to restrict others from exploiting the invention protected by the scope
of the patent claims, it does not mean that the scope of competition in the relevant market for
medicines in which the compound is the active ingredient, is necessarily open to competition.
Secondary and tertiary patents relevant to a medicine, particularly to a modified form of the
original medicine, pertaining either to a process of manufacture, associated compounds such
as enantiomers, dosage, formulation, method of use, method of treatment and so forth,
complicate the competitive landscape for such medicines.

12. Patents are, therefore, the most significant and problematic barrier to entry. This is because
patent rights are enforceable in law.

13. However, no patent is guaranteed validity (see s.20(1) Patents Act). And if a patent is
invalidated it is invalid ab initio (i.e., from the beginning). Therefore, the successful challenge of
a patent renders the rights of the patentee null and void, as if the rights had never existed. The
full extent of the retrospectivity of such a result has not, however, been the subject of judicial
consideration simply because of the absence of litigation testing the limits of retrospectivity.
Accordingly, there is a paucity of law exploring the effect of a finding of invalidity beyond the
most immediate, namely, the loss of the patentee’s rights going forward.

14. We submit that while a finding of invalidity removes a barrier to entry that benefits the
Australian public, the failure to claw back from the patentee the economic benefit derived
from its exploitation of the patent rights during the period of time the patent was operational,
albeit invalidly, is a most significant detriment to the Australian public and one that is avoided
by a pay-for-delay settlement. We postulate that the size of that detriment is quantifiable by
reference first, to the improper economic benefit derived by the patentee during the period in
which the invalid patent was operational and second, by the improper impact on third parties,
such as the Australian government through its funding of the PBS, adversely affected by the
invalid patent while in operation.

15. It follows that the successful challenge of patents that hinder or prevent competition for a
medicine in the Australian market is not only of paramount importance to the maintenance of
a competitive market, but also absolutely dependent upon it. And while the Australian
government has since 2012 sought to claw back some of the economic benefit derived by a
patent during its exploitation of patent rights subsequently held to be invalid, it is important to
understand that the extent of that claw back has been limited to the enforcement of written
undertakings given by patentees as a condition of the grant of preliminary injunctions.
Moreover, the quantification of that claw back is complex in fact and law, time consuming and
expensive, and has been limited to the quantification of the cost to the PBS of the delay of the
price reductions applicable to a medicine caused by the preliminary injunction. We

3
04/04/2025, 10:23 Deterring payfordelay Juno Pharmaceuticals Pty Ltd Ors | DLA Piper

INSIGHTS

27 SEPTEMBER 2022 • 7 MINUTE READ

Juno Pharmaceuticals Pty Ltd & Ors

Deterring pay-for-delay

Written by: Simon Uthmeyer

In March this year the pharmaceutical companies Juno Pharmaceuticals Pty Ltd (Juno),
Natco Pharma Ltd (Natco), and Celgene Corporation and Celgene Pty Ltd (Celgene) applied
to the ACCC for authorisation of their proposed litigation settlement and licence
agreement. The ACCC’s draft determination proposed to deny authorisation and resulted
in the parties withdrawing their application.
Understandably, the decision caused quite a stir. It was certainly a first in Australia, but
does it tell us anything we didn’t already know about pay-for-delay?
We think it does:
1. It is the first case in which the ACCC has indicated that a proposed patent settlement
risks harm to competition, both as between the parties and from potential generic
competitors.

2. It also shows that the ACCC can use the authorisations process as a tool to monitor
and deter pay-for-delay agreements, backed by a potential claim for damages from the
Australian Government and other customers — and in this case, it appears to have
succeeded.
GUIDANCE ON PAY FOR DELAY

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04/04/2025, 10:23 Deterring payfordelay Juno Pharmaceuticals Pty Ltd Ors | DLA Piper

The ACCC provided novel guidance on the factors relevant to assessing whether patent
settlements involve pay-for-delay, a practice which has triggered substantial competition
enforcement in other jurisdictions, but none to date in Australia.
Pay-for-delay generally refers to anti-competitive agreements between an originator and
generic competitors that forecloses generic market entry, extending the scope of the
originator’s patent. Enforcement in other jurisdictions has typically related to patent
litigation settlements where the generic receives a transfer of value from the originator —
originally in the form of monetary payments, now including licences and supply deals,
generic exclusivity arrangements and no-challenge clauses.
In the EU and UK pay-for-delay has been found to contravene the prohibitions against anti-
competitive agreements and abuse of dominance, with significant fines levied against
both parties — EUR145 million in the Commission’s Lundbeck case (Cipramil /
citalopram),1 and more recently, over GBP260 million in the CMA’s Hydrocortisone case.2
The FTC has similarly prosecuted pay-for-delay agreements which breach antitrust law
under the rule of reason approach.3

In 2019, the Productivity Commission set out several concerns about pay-for-delay
affecting Australian markets and consumers,4 but this has not yet resulted in any
enforcement.
PROTECTING GENERIC COMPETITION

Opportunely, the ACCC has now made clear its concerns about the potential impact of
patent settlements on generic competition. The provisional decision found that the
proposed settlement was likely to result in public detriment “by reducing competitive
tension in relation to generic market entry in the supply of lenalidomide and
polalidomide”.5
There were two areas of concern:
First, the settlement and licence agreement gives Celgene greater influence and
certainty over the eventual launch of generic competition.

It considers this commercial risk to be a key driver of competition, likely to exert

pressure on Celgene. By allowing Celgene to negotiate the conditions and timing of
generic market entry, the settlement could reduce Celgene’s competitive response. It
could also dampen future competition as between Celgene and Juno/Natco, as the new
generic supplier on terms agreed with Celgene.

Second, the agreement seeks to confer on Juno/Natco a “potentially very lucrative” first
mover advantage that could deter generic market entry by other potential competitors.

Absent the agreement, the first mover advantage would be determined by a competitive
process that incentivises innovation and other metrics of vigorous rivalry. The proposed
settlement therefore conferred on Juno/Nato a benefit or value that seemed likely to
distort the competitive process between generic manufacturers.
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04/04/2025, 10:23 Deterring payfordelay Juno Pharmaceuticals Pty Ltd Ors | DLA Piper

This is clear guidance that the mere threat of generic entry prior to the expiry of an
originator’s patent is seen as a key driver of competition. The early settlement of patent
disputes must avoid any transfer of value — whether a licence agreement or other form —
affecting the ability of generic manufacturers to apply competitive pressure.
THE AUTHORISATION PROCESS OPERATES AS A DE-FACTO COMPLIANCE TOOL

The second development is that the authorisations process acted as a de facto mechanism
for monitoring and intelligence, and even deterrence. Whether this was intended or not is
unclear.
In 2018, the ACCC reported working on the Government’s legislative response to the
Productivity Commission’s recommendations, which included a pay-for-delay reporting and
monitoring system.6 The proposal was based on the model used by the FTC in the United
States.7 There, parties must lodge copies of their settlement agreements within ten days
of execution, which the FTC reviews for anti-trust compliance, and general monitoring and
intelligence. The proposal was supported by the Government, which noted the difficulty of
detecting pay-for-delay, and the risk that even agreements struck overseas can adversely
impact Australian markets and consumers.8
Yet the proposal has not been implemented. The only legislative change was the repeal of
the intellectual property exemption under subsection 51(3) of the CCA. This did very little
for the substantive application of competition law to pay-for-delay — even before the
repeal of section 51(3), pay-for-delay would have fallen outside the exemption.9
Intentionally or not, however, the repeal has given the ACCC an operational advantage – it
is likely to have increased the number of applications for authorisation concerning
intellectual property. This helps the ACCC gain knowledge about industry practices and
develop in-house expertise. For example, a series of pharmaceutical industry
authorisations were granted in the context of the Covid-19 pandemic.10 At the very least,
the ACCC is likely to be more familiar with such assignments and licensing arrangements
than it was before.
The mechanism also confers a strategic advantage — as this case shows, parties seeking
authorisation are most likely to do so before concluding any settlement agreement and
discontinuing proceedings. This is an improvement on the US-style ex post notification
regime, providing a way for the ACCC to formally raise and publicise its analysis, and to
deter potentially harmful agreements before they occur.
FINALLY, A NOTE OF CAUTION:

The ACCC warns a number of times that pay-for-delay causes harm in the form of higher
prices and reduced supply affecting healthcare consumers — the largest being the
Australian Government.11
Settlements that unlawfully delay the PBS listing of medicines give rise to potential claims
in damages for the increased expenditure as a result of the delay. Under a similar regime
in the UK, the NHS recently issued a multi-million pound claim for damages caused by the

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04/04/2025, 10:23 Deterring payfordelay Juno Pharmaceuticals Pty Ltd Ors | DLA Piper

pay-for-delay in the Lundbeck case.12 The new Labour Government has made the cost of
medicines a priority issue; introducing reforms to reduce the price for consumers, but
increasing its bill, which already rose by 9% last year to USD13.8 billion. Though the
Government has not issued a competition claim for damages to date, there’s a million
reasons why it might.

1 H. Lundbeck A/S and Lundbeck Ltd v Commission, Case C 591/16 P, 25 March 2021. Available at

https://curia.europa.eu/juris/document/document.jsf?
text=&docid=239291&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=596331.
2 Against Auden McKenzie, Actavis UK and other companies for both excessive pricing and pay-for-delay. See

CMA, Hydrocortisone tablets: alleged excessive and unfair pricing, anti-competitive agreements and abusive
conduct, 31 March 2022. Available at: https://www.gov.uk/cma-cases/hydrocortisone-tablets-alleged-excessive-
and-unfair-pricing-anti-competitive-agreements-and-abusive-conduct-50277
3 See Federal Trade Commission, Pay for Delay. Available at: https://www.ftc.gov/terms/pay-delay.

4 Productivity Commission, Inquiry Report, Intellectual Property Arrangements, No. 78, 23 September 2016.

5 Ibid., [4.107]; see also pp. 27-33.

6 ACCC, Annual Report 2017-2018, p. 109. Available at https://www.accc.gov.au/system/files/ACCC-%26-AER-

Annual-Report-2017-18_0.pdf.
7 Productivity Commission, Inquiry Report, Intellectual Property Arrangements, No. 78, 23 September 2016,

Recommendation 10.2, p. 35.

8 Australian Government, Response to the Productivity Commission Inquiry into Intellectual Property

Arrangements, August 2007, p. 12. Available at https://www.pc.gov.au/inquiries/completed/intellectual-

property/intellectual-property-government-response.pdf
9 Ibid., pp. 7-21.

10 For example, the ACCC issued a number of exemptions to pharmaceuticals companies in the context of the

Covid-19 pandemic:
(1)National Pharmaceutical Services Association and Community Service Obligation Distributors:
https://www.accc.gov.au/update/accc-proposes-to-authorise-coordination-for-the-supply-of-medicines-and-
pharmacy-products-0.
(2) Medicines Australia and the Generic and Biosimilar Medicines Association: https://www.accc.gov.au/public-
registers/authorisations-and-notifications-registers/authorisations-register/medicines-australia-1.
11 Ibid., [4.82].

12 See https://www.catribunal.org.uk/cases/14155721-t-secretary-state-health-and-social-care-others.

Related Capabilities

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