Commission opens investigation into possible anticompetitive conduct by Zoetis over novel pain medicine for dogs

Possible anticompetitive conduct by Zoetis

The European Commission has opened a formal antitrust investigation to assess whether animal health company Zoetis may have breached EU competition rules by preventing the market launch of a competing novel biologic medicine used to treat chronic pain in dogs.

Zoetis is a global animal health company headquartered in the US. Zoetis' Librela is the first and only monoclonal antibody medicine approved in Europe to treat pain associated with osteoarthritis in dogs. The medicine is administered monthly and offers a novel pain relief option, particularly relevant for older dogs.

In parallel to developing Librela, Zoetis acquired another late-stage pipeline product for the same indication of pain relief, which was going to be commercialised in the European Economic Area (‘EEA') by a third party. The Commission is concerned that Zoetis may have engaged in exclusionary behaviour contrary to EU antitrust rules by terminating the development of this alternative pipeline product and refusing to transfer this pipeline medicine to the third party which in the EEA had exclusive commercialisation rights.

If proven, the behaviour under investigation may breach EU competition rules, which prohibit the abuse of a dominant position (Article 102 of the Treaty on the Functioning of the European Union ('TFEU')) and Article 54 of the EEA Agreement.

This is the Commission's first formal investigation into a potential abuse relating to the exclusionary termination of a pipeline product which was to be commercialised by a third party.

The Commission will carry out its in-depth investigation as a matter of priority. The opening of a formal investigation does not prejudge its outcome.

Background

In November 2020, Virbac, a French company specialised in animal health, submitted a complaint against Zoetis.

The Commission carried out unannounced inspections at Zoetis' premises in Belgium in October 2021.

Article 102 TFEU prohibits the abuse of a dominant position that may affect trade within the EU and prevent or restrict competition. The implementation of this provision is defined in Regulation No 1/2003, which can also be applied by the national competition authorities.

Article 11(6) of Regulation No 1/2003 provides that the opening of proceedings by the Commission relieves the competition authorities of the Member States of their competence to apply EU competition rules to the practices concerned. Article 16(1) further provides that national courts must avoid adopting decisions which would conflict with a decision contemplated by the Commission in proceedings it has initiated.

The Commission has informed Zoetis and the competition authorities of the Member States that it has opened proceedings in this case.

There is no legal deadline for bringing an antitrust investigation to an end. Its duration depends on a number of factors, including the complexity of the case, the extent to which the companies concerned cooperate with the Commission and the exercise of the rights of defence.

More information on the investigation will be available on the Commission's competition website, in the public case register under the case number AT.40734.

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