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The ABPI competition law guidance

The ABPI represents the interests of the innovative pharmaceutical industry. The ABPI’s objective is to represent the industry operating in the UK in a way that:

  • Assures patients access to the best available medicines;
  • Creates a favourable political and economic environment;
  • Encourages innovative research and development; and
  • Affords fair commercial returns.

Enforcement bodies in the UK and elsewhere in Europe understand that associations have a legitimate role in formulating public policy positions for their sector, but competition law rightly places limits on what is acceptable activity and discussion. Competition law prohibits agreements between companies and decisions by associations of companies which have as their object or effect the restriction or distortion of competition within the UK or the EU. The concepts of ‘agreement’ and ‘decision’ are very broad, and include tacit agreements and passive acceptance of anti-competitive conduct.

These guidelines are designed to provide a simple set of do’s and don’ts in relation to the organisation and conduct of ABPI meetings to help prevent the ABPI and its members acting improperly.

Compliance with these guidelines is essential – not only can the Association be held liable for anti-competitive conduct, but so too can participating companies. Those in breach face significant fines, disqualification of directors, and potential criminal sanctions. Non-legal sanctions such as loss of reputation are equally important. If you have any queries concerning these guidelines or their application, please contact the ABPI Legal Director.

1. ABPI MEETING ORGANISATION

The following guidelines apply to all ABPI meetings, including meetings of standing groups, task and finish groups, or therapy groups.

  • All meetings organised or attended by the ABPI must have a legitimate purpose;
  • An agenda must be circulated in advance for all ABPI meetings – if an agenda item causes concern members should contact the ABPI Legal Director;
  • If during the meeting a discussion is held which is thought to have strayed on to a sensitive area for competition law, either the ABPI representative or any concerned member should raise this concern and ask that the Chairman suspend and postpone the discussion for legal advice to be obtained;
  • Members should not in general discuss matters which go beyond the scope of the agenda;
  • Minutes of all ABPI meetings must be circulated and approved by the group concerned;
  • Beware that competition law obligations extend not just to discussions during the meeting itself, but also to conversations en route to meetings, and in a social context before and after meetings eg over coffee during a break.

Specific internal or external legal advice will be taken on the content of any joint action which could potentially raise competition law issues, such as: proposed industry standards, codes of conduct, recommendations or information exchanges.

2.WHAT MUST NOT BE DISCUSSED AT MEETNGS

Competition law prohibits agreements between companies and decisions by associations of companies which have as their intention or effect a restriction or distortion of competition within the UK or the EU. ‘Agreement’ and ‘decision’ are interpreted very widely and will include tacit agreements and passive acceptance of anti-competitive conduct.

The following activities are illegal and must always be avoided:

Do not facilitate any agreement between member companies to:
1. fix the prices of your products or conditions of sale;
2. limit production, agree production quotas, or otherwise limit the supply of any product reaching the market;
3. divide up the market or sources of supply or demand, either geographically or by class of customer;
4. blacklist or boycott customers, competitors or suppliers;
5. limit or control investments or technical developments in the market;
6. bid or not to bid for a tender, framework or other agreement, or the price or other terms of any such bid, or any related strategy;
7. discuss or exchange information between member companies who are competitors without first seeking legal advice from the ABPI Legal Director on any subject relating to the issues mentioned above. This applies to information proposed to be exchanged in a meeting, or through the medium of a survey or in any other format.

In other words, do not have formal or informal discussions on any of the following:

7.1 Individual company prices, price changes, or terms of sales.
7.2 Industry pricing policies or price levels.
7.3 Margins, discounts, allowances, or credit terms.
7.4 Costs of production or distribution, cost accounting formulas, or methods of computing costs.
7.5 Other current terms of trade.
7.6 Individual company figures on sources of supply, costs, production, inventories, or sales.
7.7 Information as to future plans of individual companies concerning technology, investments, or the design, production, distribution or marketing of particular products including proposed territories or customers.
7.8 Matters relating to individual suppliers or customers, particularly in respect of any action that might have the effect of excluding them from the market.
7.9 Strategy in relation to or responses in respect of tenders, or other contracts.
7.10 Other matters which would otherwise be regarded as confidential to your company.

While encouraging members to confer with their own legal advisers, this is not a substitute for also raising any such information exchanges as those listed above with the ABPI Legal Director.

3. WHAT MAY BE DISCUSSED AT MEETINGS

  • Members may discuss the following:
  • Policy development;
  • Industry public relations or advocacy activities;
  • Publicly available information on market trends (provided this does not lead to collusion concerning the future);
  • Non-confidential, technical issues relevant to the industry such as court judgments, proposed new legislation; regulatory codes of conduct etc (provided this does not lead to collusion concerning the future);
  • Information exchanges concerning non-public data which relate only to:-
    • General, historical and non-confidential data (ie cannot be expected to have an impact on competitors’ future business) OR aggregated data of at least 3 independent producers; AND
    • Individual businesses cannot be identified from the data OR the data is processed by an independent third party and confidentiality is assured.

4. INDUSTRY STANDARDS, CODES OF PRACTICE AND STANDARD TERMS AND CONDITIONS ("common standards")

Promotion of common standards can be a feature of trade association activity. Although such standards can be beneficial where they improve the quality of the association members’ products or services, problems may arise when such standards risk increasing barriers to entry to the market or discriminating against particular companies. Note:

  • Standardisation measures should not be used to raise barriers to entry to the market artificially;
  • The use of a standard form or approach should not be made compulsory;
  • Any ‘best practice’ code should not limit the way in which participants are able to compete and details should be made available to all within the industry.