[Ip-health] Venezuela: Antitrust Authorities Sentenced Against Exclusionary Practices Between Pharmaceutical Companies

[Gaëlle Krikorian]

Estudio Antequera Parilli & Rodriguez
Venezuela: Venezuelan Antitrust Authorities Sentenced Against
Exclusionary Practices Between Pharmaceutical Companies Dollder &
Whyeth Case

10 May 2007

Article by Karen Incera

Last December 26, 2006, Procompetencia (the antitrust Venezuelan
Authority) dictated the SPPLC/0076-06 Resolution, in which the
Venezuelan pharmaceutical company Wyeth Laboratory was sanctioned to
pay approximately an equivalent amount of USD 185,000 fine by the
commission of restrictive exclusionary practices forbidden in the Law
with the intention of impeding the entrance or presence of a
competitor product in the national market.

The fact that promoted the complaint was a cease and desist letter
sent by Wyeth, when it realized the eventual launch of the Dollder’s
antidepressive product IDOXEN®1 (Venlafaxine Clorhidrate) for the
supposed commission of restrictive practices against the free
competence, among others.

In the letter, Wyeth informs the plaintiff about the existence of: a)
a patent over a product that is based on the Venlafaxine Clorhidrate
active principle; b) the conferred rights by the Law to the patent
owners; c) their knowledge about the eventual commercialization of
the IDOXEN® product; d) the damages that would be done to Wyeth by a
occasional patent infringement;e) the possible actions that Wyeth
could execute in the case of a patent infringement and; f) a request
of 100 IDOXEN® product samples.

Dollder assures that IDOXEN® and EFEXOR XR® has different quaily-
quantitative formulas, eventhough they are based on the same active
principle (Venlafaxine) and being that Wyeth has a patent over a
Venlafaxine based product, no patent infringement would be taking place.

Wyeth’s defense was based on the argument that the cease and desist
letter is a very common practice in the Intellectual Property field
in order to avoid unnecessary legal issues; that the letter had
informative objectives and in no case, it should be considered as a
conduct aimed to restrict the entrance of the antidepressive IDOXEN®
into the Venezuelan market.

In this case, Procompetencia concluded that the relevant market was
"antidepressives for deep depression and other anxiety disorders
treatment in the national territory". After that, Procompentecia made
a detailed examination of each practice denounced by Dollder.

Like it was before, the fact that promote the complaint was a cease
and desist letter by Wyeth, which under the plaintiff judgment
threatened it in a direct way, and tried to impede the entrance of
the IDOXEN® product into the market.

After a detailed analysis of the mentioned missive, Procompetencia
considered that Wyeth does not count on Industrial Property Rights
derived from its patent in Venezuela over the Venlafaxine Clorhidrate
active principle, in the case that the protection of the patent
evolves a product manufactured with the active principle, but the
patent do not claim the active principle itself.

It also considers that the use of the phrase "we want to warm you"
might be considered intimidating or threatening, because according to
the Spanish Language Dictionary, to warn means to notify in a
threatening way, not being such threats in accordance to Dollder’s
right of dedicating its commercial activities without any more
limitations that those expressed in the Constitution and the Law.

Finally, and respect to the intentional element of an economic agent
in performing a restrictive conduct from the competence point of
view, Procompetencia pointed that due to the Wyeth position in an
antidepressive commercialization based on the Venlafaxine
Clorohidrate active principle, it is possible to infer that that
company did not know that the threatening correspondence would affect
the entrance of Dollder in the market; being Dollder the option more
restrictive of the free competence.

It considered that the indications in the cease and desist letter,
evidenced a maneuver aimed to obstruct the Dollder entrance in the
antidepressive medicine market with the same active principle and the
same action mechanism to be used in the treatment of the deep
depression and other anxiety disorders and in the case of that this
conduct would be concreted would generated restrictive effects in the
free competence, giving continuity to the Wyeth monopoly position.

In Procompetencia judgement, the cease and desist letter mailed by
Wyeth accomplished all the supposals contented in the Law,
constituting a restrictive practice to the free competence and so it
was declared.

Additionally to the restrictive practice aforementioned, Dollder also
denounced the manipulation of the production, distribution,
technologic development factors, as well as the supposed dominant
position abuse in the national market, which were dismissed by
Procompetencia.

Finally, against this resolution was presented an administrative
appeal which decision is pending.

Footnotes

1. It already counted with all the sanitary legal requirements for
its commercialization