The Competition Commission has decided not to prosecute a complaint of alleged anticompetitive conduct that was initiated against pharmaceuticals group Johnson & Johnson and its subsidiary Janssen Pharmaceutica.

The commission investigated allegations of abuse of dominance against Johnson & Johnson and its subsidiary after the companies had filed a secondary patent for Bedaquiline (trading as Sirturo), a drug used in the treatment of tuberculosis (TB), effectively restricting the entry of generic alternatives.

The decision to non-refer the complaint of alleged anti-competitive conduct to the Competition Tribunal for prosecution, follows extensive engagements with the two companies.

The companies, in turn, have agreed not to enforce the Bedaquiline patent in 134 low- and middle-income countries, including South Africa. This opens the market, allowing for the entry of generic suppliers.

In addition, the companies renegotiated the Bedaquiline prices charged to the Department of Health (DoH) as the procurer of Bedaquiline in South Africa.

Accordingly, the price of Bedaquiline has been reduced by about 40% from R5 577.12 to R 3 148.00 inclusive value-added tax and logistics.

The price charged to the DoH is aligned to what the companies are offering to the Global Drug Facility, which is the world’s largest procurer of TB medicines and diagnostics.

The complaint was initiated in September 2023 based on information that the two companies had filed a secondary patent for Bedaquiline in South Africa with the Companies and Intellectual Property Commission, effectively prolonging the lifespan of the Bedaquiline patent to 2027.

If true, this conduct effectively restricted the entry of generic medication, and allegedly enabled these companies to charge excessive prices to the DoH.

The conduct was assessed as a possible contravention of certain sections of the Competition Act.

The commission is, however, satisfied that the objectives of the Act, together with the public interest, are served by the change in conduct.

The commission will continue to prioritise work in secondary patents and act particularly where secondary patents have failed in other jurisdictions with more rigorous assessments.

The commission now calls on pharmaceutical companies to reconsider their secondary patenting practices in South Africa and, moving forward, the commission may seek penalties if pharmaceutical companies continue to pursue meritless secondary patents.

The decision to non-refer, therefore, concludes the investigation against the two companies.

The commission does, however, reserve the right to investigate should new evidence emerge suggesting the possible abuse of dominance in the provision of Bedaquiline.