DECEPTION OF CONSUMERS BY PHARMACIA
(Termination in absence of deception of consumers)
By its decision of 21 May 2003 the Competition Council terminated the proceedings against Pharmacia S.p.a. (hereinafter: Pharmacia) initiated for the deception of consumers.
Pharmacia is an international pharmaceutical company having its headquarters in Italy. It distributes its product called Farmorubicin PFS/RTU since 1987 in Hungary, with the authorisation of the Hungarian National Institute of Pharmacy. This is an injection against cancer the active ingredient of which is epirubicin and which is used exclusively in hospitals. Its production process is patented in Hungary until 2006. The other equivalent medicine on the Hungarian market is the Epirubicin-EBEWE injection, which has the same active ingredient. This injection is produced by the Austrian company Ebew Arzneimittel GmbH and distributed as an equivalent product since February 2002, with the authorisation of the Hungarian National Institute of Pharmacy.
Pharmacia got the rival product analysed, which showed that the two medicines had the same composition. Thereafter Pharmacia`s lawyers wrote letters to hospitals and to wholesalers of pharmaceutical products stating that the production of Epirubicin-EBEWE infringed Pharmacia`s aforementioned patent and that in its capacity as a patentee Pharmacia had the right to sue not only the producer of the infringing product, but also its users and distributors. The letters included reference to Pharmacia`s intention to initiate proceedings against Ebew Arzneimittel GmbH and its Hungarian distributor for the patent infringement committed by them and to request the Hungarian National Institute of Pharmacy to withdraw its authorisation granted for the distribution of the rival product.
On the basis of a complaint the Hungarian Competition Authority initiated proceedings against Pharmacia for deception of consumers. The Competition Council considered that four articles of the Competition Act could come into play in the present case: Articles 3 and 4 in Part II and Articles 8 and 10 in Part III.
Pursuant to Article 3, it is prohibited to injure or jeopardise the reputation or credibility of competitors by making or spreading false allegations, or by falsifying facts or by other practices.
On the other hand, according to Article 5, it is illegal to make appeals for boycotts.
Article 8 of the Competition Act prohibits the deception of consumers, which shall be presumed in particular if false declarations are made regarding the characteristics or the sale and distribution of the product, which may influence consumers` decision.
Finally, Article 10 prohibits business methods which restrict, without justification, the freedom of choice of consumers.
The important difference between the relevant parts of the Competition Act is that Part II can only be applied by civil courts, whereas proceedings in cases of violation of Part III belong to the competence of the Hungarian Competition Authority.
The question is therefore whether Articles 8 or 10 in Part III have been infringed: if the answer is negative, the Competition Authority is no longer competent to deal with the case. The Competition Council considered that the letters sent by Pharmacia to hospitals and to wholesalers of pharmaceutical products regarded the competitor company and did not influence the purchase of the product itself. These consumers - since all of them were members of the same branch - knew the characteristics of both products, the fact that they were practically identical and the legal background relating to the distribution of pharmaceutical products and to patents. Consequently, the letters sent by Pharmacia could not influence their decision whether to order the product of Ebew or not. Thus these communications do not fall within the scope of Articles 8 or 10 of Part III of the Competition Act.
On those grounds, the Competition Council terminated the proceedings by its decision of 21 May 2003.