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OFT proposes to find Genzyme's pricing policy breaches competition law

PN 46/02     31 July 2002

The OFT proposes to make a decision that Genzyme has infringed UK competition law.

Genzyme supplies a drug called Cerezyme, which is currently the only effective treatment for the rare medical condition Gaucher disease.

The OFT has today written to Genzyme setting out why it proposes to find that the company has infringed Chapter II of the Competition Act 1998, by:

• charging the NHS a price for Cerezyme, which includes the price of ancillary homecare services such as nursing support and thereby effectively ensuring only Genzyme (or an undertaking acting under contract for Genzyme) can provide such services
• charging independent third party homecare service providers a price for Cerezyme that allows them no margin
• introducing an unreasonable term of supply to homecare service providers.

The company now has the opportunity to make written and oral representations in response to the OFT's proposed decision. These will be taken fully into account before any final decision is made.

NOTES

1. Powers under the Competition Act 1998

The Act gives the OFT powers to investigate suspected infringements of the Act's prohibitions:

(i) the Chapter I prohibition prohibits agreements between undertakings, decisions by associations of undertakings or concerted practices which have the object or effect of preventing, restricting or distorting competition in the UK (or any part of it) and which may affect trade within the UK (or any part of it); and

(ii) the Chapter II prohibition prohibits conduct by one or more undertakings which amounts to the abuse of a dominant position in a market which may affect trade within the UK (or any part of it).

2. Rule 14 of the Competition Act 1998 (Director's rules) Order 2000 requires the OFT to provide a written notice to each person who OFT considers is engaged in the conduct which has led to an infringement. Genzyme has today received such a notice.

3. In this press release the functions of the Director General of Fair Trading (DGFT) under the Act are for simplicity described as the functions of 'the OFT'. The Enterprise Bill proposes to replace the office of the DGFT with the OFT, to which would be transferred the DGFT's functions.

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