On 3 December 2014, the Spanish Supreme Court handed down a judgment in the Pfizer dual-pricing case, ruling that special pricing legislation in Spain does not prevent the application of the competition laws.

The case began when a wholesaler, Spain Pharma SA, filed a complaint in 2005 with the Spanish Competition Authority (the "CNMC"), alleging that Pfizer had been adopting measures to impede parallel exports by establishing two different prices for its products, depending on whether the goods would be delivered and sold in Spain or in other EU Member States. Pfizer argued that it, in fact, set a single price for all sales in Spain. However, in the case of pharmaceuticals to be reimbursed by the Spanish social security system, its price was substituted by a (much lower) price determined by Spanish legislation on the pricing of medicines. Following an investigation, the CNMC closed the proceedings, finding that the measures were exempted under Regulation 2790/1999, the formerly applicable Vertical Agreements Block Exemption Regulation, and that Pfizer's dual pricing policy had complied with the Spanish legislation on the pricing of medicines.

On appeal, the lower court annulled the CNMC's decision, holding that compliance with Spanish legislation on the pricing of medicines does not preclude an infringement of the EU and Spanish competition rules. In particular, the lower court confirmed that, as established by the ECJ in the 2009 GSK Spain case law (Joined Cases C-501/06 P, C-513/06 P, C-515/06 P and C-519/06 P, see VBB on Competition Law, Volume 2009, No. 10, available at www.vbb.com), the then applicable Spanish pricing legislation did not impose any obligation to establish different prices depending on whether they were to be sold in Spain in circumstances where the cost would be funded by the Spanish social security system or whether they were to be sold in other Member States of the EU. The lower court also confirmed, as established by the ECJ in the GSK Spain case, that despite the legal and economic particularities of the pharmaceutical sector, any agreement that aims at restricting parallel trade should be considered to be an infringement by object of the EU competition rules.

In its recent judgment, the Supreme Court upheld the judgment of the lower court, holding that the CNMC's decision to close the proceedings against Pfizer was premature especially since the GSK Spain case suggested that the conduct at issue may have been anti-competitive. According to the Supreme Court, the GSK Spain case alone should have prompted the CNMC to verify whether the measures in question have restricted competition or would be likely to do so. In particular, if the dual-pricing measures were likely to hamper parallel trade, they may have constituted a 'by object' restriction of competition law.

The Supreme Court sent the case back to the CNMC for it to examine whether the dual-pricing system adopted by Pfizer constitutes an infringement of EU and Spanish competition law. It should be noted that the courts in this case reviewed a previous version of the law concerning the pricing of medicines and did not address the relevance to the competition law analysis of subsequent changes to the law related to so-called free pricing.

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