AUTH/3243/9/19 - Ex-Employee v Allergen

Commercial policy

  • Received
    29 July 2019
  • Case number
  • Applicable Code year
  • Completed
    22 November 2019
  • No breach Clause(s)
  • Additional sanctions
  • Appeal
    No appeal
  • Review
    To be published in the Review

Case Summary


An ex-employee complained about a commercial policy implemented by Allergan Limited with respect to its products used in aesthetic medicine – Botox (botulinum toxin Type A), a prescription only medicine and the medical devices Juvederm and CoolSculpting. Botox was indicated, inter alia, for the temporary improvement in the appearance of certain facial lines when the severity had an important psychological impact.

The complainant provided details and was concerned about an incentive to prescribe Botox offered in the form of a commercial overlay policy, bundling Botox, Juvederm and Coolsculpting together. As the incentive was offered to large chains of private medical practice, the financial incentive to prescribe Botox over another toxin came into play.

The detailed response from Allergan appears below.

The Panel noted that the commercial arrangements related to sales of a medicine and two medical devices. The Panel noted that the arrangements proposed a discount for purchases of the medicine. Allergan submitted that there was no bundling or conditionality making the prices of one group of products contingent on another.

The Panel also noted Allergan’s submission that the two presentations provided by the complainant were drafts subject to revisions and discussion although the company also submitted that one had been used with a customer. Neither presentation clearly indicated that it was a draft subject to revisions and modifications although one of the presentations included some slides labelled ‘draft proposal’.

One presentation referred to testing the terms with a named clinic chain next week and the volume gains and cross selling opportunities off-setting the potential dilution risk. The other presentation (undated) referred to two options, moving to standard commercial policy structure and access portfolio pricing terms.

The Panel noted that the definition of promotion excluded measures or trade practices relating to prices, margins or discounts which were in regular use by a significant proportion of the pharmaceutical industry on 1 January 1993. The supplementary information to Clause 18.1 Terms of Trade, stated that terms of trade were excluded from the provisions of Clause 18. Other trade practices were subject to the Code. The terms ‘prices’, ‘margins’ and ‘discounts’ were primarily financial terms.

On the information supplied, the Panel considered that the arrangements appeared to be a term of trade relating to prices, margins and discounts. Such arrangements were used by a significant proportion of the pharmaceutical industry on 1 January 1993. The Panel considered that as the arrangement related to the cost of the medicine, it could take the benefit of the exemption. The Panel therefore ruled no breaches of the Code including Clause 2.