FEBELCO dodged the sanction in application of the leniency programme, since it was the one that reported the infringements to the BCA. Although it was still condemned for the infringements, it did not have to pay anything. PHARMA BELGIUM-BELMEDIS SA did have to cough up its share of the fine entirely though, which is nearly €30 million. It should be noted, however, that it was given a significant fine reduction of 40% under the leniency programme because it submitted extra evidence, which the Auditor-General allowed in order to establish the existence of the infringements. A third participant, CERP SA, refused to take part in the settlement, so there is still an ongoing infringement lawsuit against it.
In particular, the settlement covers the admission of two separate infringements.
The first infringement concerned a collusion involving the cartel offenders in which they agreed to apply the same commercial conditions for the distribution of pharmaceutical products from pharmaceutical labs to pharmacies. By joining forces, they could, in this way, restrict the pharmaceutical labs’ direct sale to pharmacies and secure their own margin.
The second infringement concerned the yearly sale of flu shots to pharmacies through a pre-sale system. The cartel offenders joined forces here as well, and they agreed to not grant discounts to pharmacies and to not accept any returns of unsold vaccines that were ordered during the pre-sale period. In addition, they determined together the duration of the pre-sale periods.
Both infringements started around mid-2003 and continued until around the end of 2016. The pharmaceutical wholesalers were able to reap the fruits of their cartel arrangements for more than 13 years.
The arrangements that were made between FEBELCO and PHARMA BELGIUM-BELMEDIS constitute a breach of the rules of Belgian cartel law that prohibits price-fixing and agreements on other commercial conditions between competitors, among others. Such price-fixings are a hardcore infringement of competition law because they have a very adverse impact on the consumer who had to pay a high price for years.
This decision shows again that prosecution for price-fixings is a high priority for national competition authorities, and they are punished heavily. Nevertheless, there is also positive note here: if you, as a company, cooperates in the investigation conducted by the national competition authority, there is certainly a possibility to obtain a significant fine reduction, even for the most serious infringements.
Do you have any other questions about the arrangements you can make or cannot make with your competitors or about the application of the leniency programme? Contact our competition law department. They will gladly help you further.
