Competition, Consumer & Regulatory

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Client Update: Misuse of market power – Court rejects ACCC allegations against Pfizer

25 May 2018

In brief: Today the Full Federal Court found against the ACCC and in favour of Pfizer.

Pfizer in 2011 established a supply model which involved supplying community pharmacies directly in lieu of doing so through wholesalers. Pfizer made offers to community pharmacies as to the terms upon which Pfizer would supply Lipitor and its generic version, 'Atorvastatin Pfizer', upon expiry of the atorvastatin patent. This offer, among other things, tied rebates to the quantity of these products purchased by the pharmacy.

The ACCC alleged that Pfizer used its market power for an anti-competitive purpose (s 46) and engaged in exclusive dealing conduct for the purpose of substantially lessening competition in the atorvastatin market (s 47).

The case turned on the question of Pfizer's purpose. The trial Judge found that Pfizer's purpose in seeking to ensure a significant number of community pharmacies took up its offers was to allow Pfizer to compete in the atorvastatin market post patent expiry. In essence the trial Judge found that Pfizer was seeking to protect its own commercial position. The Full Federal Court agreed.

Fiona Crosbie and Kon Stellios acted for Pfizer at trial and on appeal.

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