Paul K. Gorecki

Do you believe in magic? Improving the quality of pharmacy services through restricting entry and aspirational contracts, the Irish experience

A constant refrain of policy makers and public representatives is the necessity of improving the quality of public health services. In this paper, two inter-related policies designed to raise the quality of pharmacy services in Ireland are considered. The first was to restrict the opening of new pharmacies, the second to increase the quality of pharmacy services through contract specification. While the first policy restricted entry and raised returns to existing pharmacies, there is no evidence it raised service quality. Equally, the second policy appears to have had little effect on the quality of pharmacy services. The contractual provision itself is largely unenforceable, does not recognize the conflicting motivations of a pharmacist and results in no measurable output. Drawing on this experience, several lessons as presented as to how service quality can be improved, which are likely to have application beyond Ireland.

The Kerry/Breeo Merger: Two Views of Countervailing Buyer Power—The Competition Authority and the High Court

The Irish Competition Authority’s (the Authority) Kerry/Breeo Determination, dated 28 August 2008, found that the leading grocery retailers would be unable to exercise sufficient countervailing buyer power post-merger in the rashers and non-poultry cooked meats markets to prevent a substantial lessening of competition (SLC), which is the competition test under the Competition Act 2002 (the Act). Subsequently, the Authority’s Kerry/Breeo Determination1 prohibiting the merger was annulled by the High Court on 19 March 2009, following an appeal by Kerry.2 The grounds for annulment were that the leading retailers would be able to exercise sufficient countervailing buyer power to constrain any post-merger price increase.3 In short, there would be no SLC. This was the first appeal of an Authority merger Determination since the Authority assumed responsibility for the merger function on 1 January 2003. These events offer the possibility of a rare insight into the judicial interpretation of countervailing buyer power. Typically in merger cases the parties to the August 2009 European Competition Journal 585

Usage of generics in Ireland: Recent trends and policy developments

In 2011, the Irish State spent €1.9bn on pharmaceuticals, amounting to approximately 13% of total public health expenditure. Over the period 2000–2010, Ireland experienced one of the fastest growth rates in per capita pharmaceutical expenditure in the OECD. Concern over pharmaceutical expenditure in Ireland has led to a number of policy changes, targeting primarily the price of pharmaceuticals. More recently, there has been much concern over the low rates of generic usage in Ireland. In 2009, 34% of multiple-source off-patent pharmaceuticals dispensed under the main State pharmaceutical reimbursement schemes in Ireland were generics, in comparison with 71% in the UK. Up to now, the potential for significant savings through the increased use of generics in Ireland has been limited as the price of off-patent pharmaceuticals (including generic pharmaceuticals) was set at a small discount to the patent-holder price. Legislation to introduce a system of reference pricing and generic substitution for 20 leading off-patent pharmaceuticals has recently been enacted. However, reference prices have yet to be set, and so the full scale of any potential savings under the Health (Pricing and Supply of Medical Goods) Act 2013 has yet to be determined. In advance of the new legislation, there has been evidence of a substantial increase in the use of generics in Ireland, although the precise reasons driving this increase are unclear.

The Use by Irish Courts of Eu Jurisprudence to Resolve Conflicts Between National Competition Law and Regulation: Panda Waste

On 21 December 2009 an Irish High Court judgment1 found that a regulatory proposal, the Variation, by the four Dublin local authorities (“the local authorities”)2 to move from competition-in-the-market (or side-by-side competition) for household waste collection to a single operator, irrespective of whether selected through competitive tendering (ie competition-for-the-market) or by the local authority simply reserving the collection function to itself, was a breach of national competition law. The Panda judgment, if sustained on appeal to the Supreme Court,3 is a verdict of considerable importance for competition law jurists both in Ireland and abroad. In the High Court judgment, local authorities are held to be “undertakings” and local authority policy decisions therefore to be susceptible to review and prohibition under national competition rules. Thus, national rules prohibiting abuse of dominance and anticompetitive December 2010 European Competition Journal 541

The Role of Economic Evidence in Merger Control in Ireland: Current and Future Practice

After four years of merger control by the Competition Authority (“the Authority”) and over 300 merger notifications, now is an appropriate time to consider the role of evidence in general and economic evidence in particular in merger control in Ireland. Has the Authority got the correct balance between different kinds of evidence? What capabilities does it make sense for a small merger control unit to develop in merger assessment? What is the likely future course of the development of economic evidence in merger control? Are efficiencies used extensively as a merger defence? The definition, role and importance of economic evidence in merger control have each attracted considerable attention. In 2004, for example, the OECD organised a “Roundtable on the Use of Economic Evidence in Merger Control”,1 while the British Institute of International and Comparative Law at its annual merger conference held a session on “Use (and abuse?) of Economic Evidence”.2 This interest in economic evidence no doubt reflects the increasing use of economics and economic analysis in merger control, as evidenced in the US by merger cases such as Staples/Office Depot,3 and in Europe by the creation in December 2007 European Competition Journal 345

Availability and Pricing New Medicines in Ireland: Reflections and Reform

This paper argues that the current method of determining the availability and pricing of new medicines for public reimbursement in Ireland likely results in too large a share of public healthcare expenditure allocated to medicines. Resources are misallocated. Welfare is lowered. In contrast to some other areas of public healthcare, patients exercise ‘voice’ rather than ‘exit’ concerning the public provision of high-cost new medicines. Setting publicly agreed cost-effectiveness thresholds, with clear predictable criteria for when the cost-effectiveness thresholds can be exceeded, would contribute to the creation of a more appropriate new medicine decision-making framework. It would incentivise suppliers to set prices consistent with the decision-making framework. Guidance and clarity raises the possibility of shielding the Health Service Executive, the decision maker, at least partially, from the pressure to fund expensive new medicines that lack cost-effectiveness, while at the same time increasing transparency and predictability.

Alternative Approaches to Sentencing in Cartel Cases: The European Union, Ireland and the United States

Cartel enforcement is typically the top priority of competition agencies around the world.1 An important, indeed crucial, aspect of cartel enforcement is ensuring that the sentences imposed on convicted individuals and fi rms are appropriate and proportionate. These sentences will be determined by, inter alia, the provisions of the legislation, whether competition law is civil or criminal, whether it applies to individuals and/or fi rms, whether it uses sentencing or other guidelines, and the degree of discretion accorded the sentencing authority, whether a court or an administrative body. In this paper we outline, review, compare and contrast the approach to sentencing in cartel cases in three jurisdictions, Ireland, the US and the EU, that share some common characteristics,2 but in other respects are quite different.3 We do not consider the approaches employed in these three jurisdictions in