Court of Appeal judgment in CMA v Flynn / Pfizer

10 Mar 2020

The Court of Appeal handed down a Judgment today on the appeals against the Competition Appeal Tribunal’s judgment which set aside parts of the CMA’s decision finding that the pharmaceutical companies, Pfizer and Flynn, had breached Article 102 TFEU / the Chapter II prohibition by charging unfairly high prices for the anti-epileptic drug, phenytoin sodium capsules.

The Court of Appeal re-affirmed the Tribunal’s decision that the question of abuse and penalties be remitted to the CMA. The Court dismissed the CMA’s argument that it was unnecessary to examine evidence of comparator products put forward by the undertakings under investigation. The CMA must evaluate that evidence fairly and impartially. However, the Court considered that the CAT was wrong to hold that the CMA had to carry out a ‘full investigation’ of the comparators in all cases.

The Court upheld the CMA’s ground of appeal that the Tribunal had erred by requiring the CMA to identify a hypothetical benchmark price in assessing whether prices were excessive. The Court also departed in a number of respects from the Tribunal’s reasoning regarding the principles to be applied in unfair pricing cases.

The Court of Appeal’s judgment provides a detailed consideration of the test to be applied in unfair pricing cases and of the nature of the duty upon a competition authority to evaluate evidence adduced by an undertaking in its defence.

Mark Brealey QC acted for Pfizer.

James Bourke acted for the European Commission.

Click here for the full judgment.