EU Commission Issues Objections to Alchem in EU’s First Pharmaceutical Cartel Case

Giuseppe de vita

Brussels (Brussels Morning) – The European Commission suspects Alchem International of violating EU antitrust rules by participating in a cartel for the pharmaceutical component SNBB, potentially fixing prices and sharing sensitive information. Other companies were fined €13.4 million in October 2023. 

The European Commission has told Alchem International Pvt. Ltd. and its subsidiary Alchem International (H.K.) Limited (together ‘Alchem’) of its initial view that they have violated EU antitrust rules by partaking in a long-lasting cartel concerning an essential pharmaceutical product.

How Did Alchem Allegedly Breach EU Antitrust Laws?

Alchem is a producer of the pharmaceutical component N-Butylbromide Scopolamine/Hyoscine (‘SNBB’). The EU Commission has situations in which Alchem may have corresponded and agreed with other market players to fix the minimum sales price of SNBB to customers (i.e., distributors and generic drug plants) and to allocate quotas. In addition, Alchemy may have traded commercially sensitive information with opponents. In October 2023, the Commission assumed a settlement decision in relation to the same cartel and involving other companies.

SNBB is an essential input material to produce the abdominal antispasmodic drugs, Buscopan and its generic renditions. If the Commission’s preliminary thought were confirmed, such behaviour would disregard EU rules that prohibit anti-competitive business courses such as collusion on costs and market sharing (Article 101 of the Treaty on the Functioning of the European Union and Article 53 of the EEA Agreement). 

When Did the Commission Launch Investigations?

In October 2023, the EU Commission penalized Alkaloids of Australia, Alkaloids Corporation, Boehringer, Linnea and Transo-Pharm for a total of €13,4 million for their engagement in the SNBB cartel. C2 PHARMA was not fined as it demonstrated the cartel to the Commission under the leniency schedule. All six companies acknowledged their involvement in the cartel and decided to settle the case.

Why Is Alchem Under EU Antitrust Investigation?

In the context of the same investigation, the Commission extended proceedings against a seventh company, Alchem. Alchem was not protected by the October 2023 settlement decision, and therefore the research concerning this company persisted under the standard (non-settlement) cartel procedure.

A Statement of Complaints is a formal step in Commission investigations into supposed violations of EU regulations on restrictive business practices. The Commission advises the parties concerned in writing of the complaints raised against them. The parties can then examine the records in the Commission’s investigation file, reply on paper and request an oral hearing to deliver their comments on the case before agents of the Commission and national competition authorities. In this typical case, the party can also read the documents in a confidentiality ring which helps speed the process. 

What Are the Consequences for Alchem’s Alleged Cartel Involvement?

If the Commission figures, after the parties have exerted their rights of defence, that there is sufficient proof of an infringement, it can adopt a decision denying the conduct and assessing a fine of up to 10% of a company’s annual worldwide turnover.

There is no lawful deadline for the Commission to conclude antitrust inquiries into anticompetitive conduct. The course of an antitrust investigation relies on a number of factors, including the intricacy of the case, the extent to which the companies involved cooperate with the Commission and the exercise of the rights of defence.

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Giuseppe De Vita is a journalist at Brussels Morning News, He is covering European politics, Law and Technology news. Lawyer at De Vita & Partners Law Firm specializing in Criminal Law, Military and Space Law, and Cyber Security. In April 2023, he authored the monograph "Governance in Extraterrestrial Space", showcasing his extensive legal expertise. He has acquired vast experience in handling criminal and civil matters, managing litigation before various levels of jurisdiction across the national territory. In 2010, he obtained a Master's degree in Information Technology Law. Additionally, in the same year, he served as a teacher in criminal-IT subjects at the Penitentiary Police School of Portici, providing courses aimed at officials and managers of the Penitentiary Police and the Penitentiary Administration, focusing on IT security. He also serves as a Workplace Safety teacher, conducting training courses at various organizations and educational institutions. Moreover, he is a lecturer on Anti-Corruption and Transparency. The law firm, under his guidance, assists both private and corporate clients in court, accumulating significant experience in criminal and civil disputes over the years. Furthermore, it conducts Risk Management and Compliance, Cyber Resilience, and Cyber Security activities, with a specific focus on privacy protection (EU Regulation 2016/679 - GDPR). Giuseppe frequently publishes articles in legal journals, analyzing various regulatory issues. He has contributed articles to the legal journal Altalex, of which he is also a member of the Scientific Committee.