Competition law and enforcement in the pharmaceuticals sector in the Czech Republic

1. Is there any specific regulatory framework that deals with competition regulation in the pharmaceutical sector in your country?

There is no specific regulatory framework that deals exclusively with competition regulation in the pharmaceutical sector. General competition rules apply.

2. Which authorities are entrusted with enforcing these rules?

3. What actions can authorities take to tackle anticompetitive conduct and what remedies can they impose?

Unless there are serious reasons to immediately start administrative proceedings or for a dawn raid, the Office usually requests information and documents to pre-analyse the case. If the Office concludes that conduct was not contrary to competition law, it does not investigate the case further. Otherwise, it starts administrative proceedings.

The Office usually imposes fines. Under certain conditions, the Office can agree with the participant on other actions which will remedy the anti-competitive conduct, e.g. the participant will agree to change their conduct so that it is in line with competition law.

Depending on the type of the anti-competitive conduct, the Office can also forbid the participant from participating in public tenders.

4. Can remedies for damages suffered due to anticompetitive conduct be sought through private enforcement? What kind of remedies and how can they be obtained?

Yes, competitors and consumers who suffer damage due to anticompetitive conduct may file a private law lawsuit with a court. They may use the respective decision of the Office as evidence that the defendant acted contrary to law. Even if the Office fined the defendant in the previous administrative proceedings, the amount of compensation for damages, which are subject to court proceedings, cannot be decreased by the amount of the fine imposed by the Office. 

5. Has the antitrust authority conducted any sector-wide inquiry into the pharmaceutical sector in your country and, if so, what were the main observations and consequences?

The Office has not recently conducted any sector-wide inquiry into the pharmaceutical sector in the Czech Republic.

There are, however, rumours that the Office will focus on enforcing rules set forth in the Pharmaceuticals Act regarding the obligation on marketing authorisation holders to supply distributors.

At the EU level, on 28 January 2019 the European Commission adopted the ReportEuropean competition authorities working together for affordable and innovative medicines” on competition enforcement in the pharmaceutical sector, which covers the period 2009–2017.

6. What is the rate of enforcement of competition laws in the pharmaceutical sector in your country in the last three years? Is it high compared to other sectors?

There are no official comprehensive statistics on this. However, based on our experience, it appears that the rate of enforcement of competition laws is higher in other sectors.

7. What type of anti-competitive conduct is most common in the pharmaceutical sector in your country?

There are no official statistics on this. Based on our experience, the most common anti-competitive conduct has recently been the abuse of a dominant position by marketing authorisation holders and distributors.

8. Please provide information on a couple of interesting/significant anti-trust cases in the pharmaceutical sector in your country.

In 2019, the Office investigated a company selling traditional Chinese medicine products due to a possible infringement of competition law for setting fixed minimum prices and restricting to whom its customers could sell the products.

The company’s customers were obliged to comply with minimum “recommended” prices and to sell the products only to end consumers. The company regularly verified compliance with the requirements and threatened its customers with immediate termination of contracts should they proceed otherwise. The company did ultimately terminate contracts with several of them. Based on this, the Office concluded that the company reduced competition between its customers and limited pricing due to setting fixed minimum prices. The Office imposed a fine of CZK 853,000 (approx. EUR 33,000).

Portrait of Tomáš Matĕjovský
Tomáš Matĕjovský
Partner
Prague
Portrait of Pavel Dřimal
Pavel Dřimal
Associate
Prague