The document discusses the Turkish Competition Authority's approach to pay-for-delay agreements in the pharmaceuticals sector, highlighting government regulations on pricing and the competitive market context. It outlines frequent case topics involving price discrimination and agreements between originators and generic manufacturers, emphasizing the importance of contract evaluation. Notable cases, such as GlaxoSmithKline/Bilim Ilac and Allergan/Abdi Ibrahim, are examined for their individual exemptions related to marketing and distribution agreements.

1. TURKISH COMPETITION AUTHORITY
How Do We Approach
Pay-for-Delay
Agreements?
OECD, Paris
Feb 2019
Cigdem Gizem OKKAOGLU
Merve BIROGLU

2. 2
1. General View of the Pharmaceuticals Sector
2. Frequent Case Topics
3. Approach to Pay-for- Delay Agreements
4. Relevant Cases
Outline

3. 3
- Prices are regulated by the government based on a
reference system
- France, Spain, Italy, Portugal, Greece
- Minimum sale price given to warehouses
- Euro is converted to Turkish Liras, by taking the 70%
of previous year’s average Euro/TL exchange rate
- Government is the biggest buyer of pharmaceuticals
and receives large discounts
- Therefore prices are lower than in most EU countries
- Market is ripe for parallel trade
- Maximum profit rates of pharmacy warehouses and
pharmacy shops are pre-determined
1. General View of the Pharmaceuticals Sector

4. 4
- Act No 4054 Article 4 corresponding to TFEU Article 101(1)
- Discrimination based on price, terms of payment
- Warehouses file a complaint about producers
- Act No 4054 Article 5 corresponding to TFEU Article 101(3)
- Block/Individual Exemptions
- Horizontal or vertical agreements
- Act No 4054 Article 6 corresponding to TFEU Article 102
- Refusal to Supply
- Exclusionary Conduct
2. Frequent Case Topics

5. 5
3. Approach to Pay-for-Delay Agreements
- More than 300 types of agreements between originators
and generic manufacturers (license, supply, distribution,
joint marketing, production etc.)
- The objective of pay-for-delay agreement can be achieved
by other types of agreements such that:
- Originator might give a licence to the generics
manufacturer in one market so that it does not enter
another market
- Marketing/distribution agreement prevents generics
manufacturer from entering the market
- It is important to evaluate the contract terms carefully to
understand the intention kept in the background

6. 6
GlaxoSmithKline(GSK)/Bilim Ilac Decision (2017)
- Individual exemption for the marketing agreement bw parties
- Bilim Ilac supports marketing activities for GSK’s Seretide
- Bilim Ilac is a generics manufacturer of Seretide (Ventofor
Kombi in the same market based on ATC-3 classification)
- Is pay-for-delay agreement hidden behind the cooperation?
- Bilim Ilac was questioned and the agreement was granted
individual exemption
Allergan/Abdi Ibrahim Decision (2010)
- Individual exemption for the distribution agreement bw parties
- 5 years long non-competition clause prevents Abdi Ibrahim from
entering the market with generics
- Abdi Ibrahim is the strongest potential competitor of Allergan
- Agreement is granted individual exemption with the condition
that Allergan removes the non-competition terms
4. Relevant Cases

7. 7
Thank you!
Contact: cokkaoglu@rekabet.gov.tr

8. Q&A
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