Polpharma can take over Polfa Warszawa – as decided the President of UOKiK. However, there are certain conditions to be met before performing the transaction – the acquiring company will have to sell all its rights to three drugs

The control of concentration of undertakings performed by the President of UOKiK has as its object counteracting a consolidation which may impede or even result in a compelete elimination of competition. The Office can issue a consent to implement a concentration or prohibit the transaction. In cases raising doubts, as regards the impact on competition, the law provides for issuing a conditional consent to perform a transaction, at the same time imposing specified obligations on the transaction participants – e.g. sales of property in whole or in part, or divesting control over a given undertaking.

In October 2011 UOKiK received from Zakłady Farmaceutyczne Polpharma a notification concerning the intention of taking control over Zakłady Farmaceutyczne Polfa in Warszawa. Both undertakings deal with production and sale of drugs. Polpharma is a depending entity belonging to Genefar company. Polfa Warszawa is the state budget company belonging to Polski Holding Farmaceutyczny (PHF). The agreement concluded by PHF, State Budget and Polpharma provided the basis for this notification. As a consequence, the undertaking taking control is to acquire the majority of shares of Polfa Warszawa.

The proceedings conducted by UOKiK revealed that the transaction will result in restriction of competition on three Polish markets of launching antithrombotic drugs widely available without doctor’s perscription (slowing down thrombus formation, aimed at persons with heart problems), fluorochinolones issued by doctor’s prescription (antibiotics of general use) as well as sulfonamids by doctoctor’s prescription, agent applied for treament ofbacteria eye infections.

The participants to the concentration would have obtained  the monopolist’s position on the market of eye treatment agents, on the two other – their shares in total significantly exceeded the threshold of 40 percent as determined in the antimonoply act, which entails the presumption of holding a dominant position by an undertaking. Moreover, in case of antithrombotic drugs, the products of Polpharma and Polfa Warszawa (Polocard and Acard) are most commonly known by consumers and for this reason their competitors failed to obtain a significant market position despite the fact they offered cheaper products. The Office also took into account barriers to new products entering the market. As a consequence, obtaing by Polpharma a significant position on these markets could result in the increase in prices of some drugs.

- At the same time the analysis of the Office proved it possible to impose on the acquiring company certain conditions, the fulfilment of which will result in maintaintaing competition. For this reason, it is necessary for Polpharma to divest of all rights to the three drugs – explains the President of UOKiK, Małgorzata Krasnodębska-Tomkiel.

According to the imposed condition, Polpharma within 18 months from the date of issuing the decision will have to divest of all rights to the following drugs produced by the said company or Polfa Warszawa: Polocard or Acard (antithrombotic drugs), Cipronex or Proxacin (fluorochinolones) andSulfacetamidum natrium or Sulfacetamidum WZF 10% HEC.

The sale must be vested upon the investor out of Polpharma capital group and under no joint control of any entity of this group of companies. Furthermore, the acquiring undertaking will have to get acceptance of UOKiK. Additionally, the acquiring company is obliged to submit to the new owner all technical and commercial documentation concerning the production and sale of the drugs.

Moreover, Polpharma till the time of divesting all rights to the three drugs will be obliged to  maintain a minimun of 70 percent of market share and the balance of advertisement and promotion expenditures concerning these products and their sale – as compared to 2010 and 2011.

UOKiK rarely issues conditional consents – this has been the 14th decision since 2004 and at the same time the first since 2012.

Under the law, a transaction is subject to notification to the antitrust authority, if it involves undertakings whose total turnover in the preceding year exceeded EUR 1 billion globally or EUR 50 million in Poland.

Decisions regarding consent to concentration lapse if the transaction does not take place within 2 years of their release. The Office’s website contains information about all antitrust proceedings conducted by UOKiK in cases involving concentration. More information about the principles for concentration of undertakings can be found in the special elaboration.

Additional information for the media:
Małgorzata Cieloch, Spokesperson for UOKiK
Department of International Relations and Communication
Pl. Powstańców Warszawy 1, 00-950 Warszawa
Phone: +48 22 55 60 106
Fax: +48 22 826 11 86
E-mail: malgorzata.cieloch@uokik.gov.pl