Legal Updates

A license for a generic product issued by an EU Agency may be considered hindrance to EU Competition law if granted to a single company

September 4, 2022

A medical distributor received a license from the European Medicines Agency (EMA) under the appropriate regulatory framework. A competitor petitioned the EMA for revocation of the license, as it contented that the grant of the license, although not exclusive, disrupts the fairness of the market within the economic union, due to the fact that the distributor has the sole license in the EU.

The Court ordered revocation of the license and held that although the license is not exclusive, the mere grant of the license on generic medicine is a violation of the free market within the Union. The principal of a free market falls under the competition laws of the Union, which are defined as relatively strict. The same rules do not fall under the competence of a single agency, rather under the EU Commission that defines the laws on the state and Union level. Thus, when a complaint is lodged on the principles of the Common Market, the Commission is responsible to address the matter and to find an appropriate solution. In cases of breach of competition between organizations operating in the same sphere, the Union rules give preference to maintaining a stable and common market, rather than a single company license. Here, the distributor received a license while other distributor did not even bother to file a motion for a license, and is such case preference of one company over others exists on a generic products. Thus, there are no level playing field for all distributors and this violates the rules of fair competition. In cases of violation of competition rules between players in the same field, the Union rules prefer the stability and harmonization of the market on a single market player. Thus, because harmonization of the market and stability trumps over the grant of a license, the license for distribution of the generic product is to be revoked.