Competition Tribunal Issues First-of-Its-Kind Decision in Private Abuse of Dominance Case Against Major Pharma Manufacturer

January 24, 2025

Written By Emrys Davis, Emily Kettel and Christina Skinner

On December 17, 2024, the Competition Tribunal (the Tribunal) issued reasons for its decision to dismiss an application for leave to bring a private abuse of dominance action against a major pharmaceutical manufacturer. JAMP had applied for leave to bring a claim against Janssen Inc. alleging abuse of dominance under section 79 of the Competition Act (the Act) in relation to STELARA, Janssen’s drug containing the active ingredient ustekinumab. The Tribunal dismissed JAMP’s application. Among other things, its decision confirms that the Tribunal will carefully probe the parties’ evidence in performing its important screening role on leave applications.

Important Takeaways

• This is the first decision testing recent amendments to the Act that expanded the right of private access to the Tribunal to permit private parties to seek leave to commence actions under the Act’s abuse of dominance provisions.
• In a preliminary issue of interpretation, the Tribunal confirmed that leave may be granted under section 79 where only part of the applicant’s business is directly and substantially affected (not only where its entire business is affected).
• Applicants must put forward “credible, cogent, and objective evidence” that goes beyond a “mere possibility” to meet the test for leave.

JAMP’s Application for Leave

JAMP sought leave alleging that Janssen, as the dominant (and previously the only) supplier of ustekinumab, engaged in a practice of anticompetitive acts intended to prevent or delay competitors, including JAMP, from entering the market to supply “biosimilar” drugs that compete with STELARA. JAMP alleged that this conducted lessened competition substantially in the market for the supply of ustekinumab in Canada. It sought several remedies, including (among others):

• An order prohibiting Janssen from taking certain actions, including a prohibition against selling its new ustekinumab product, FINLIUS, for a period of 10 years and offering a drug that is biosimilar to STELARA through the Janssen BioAdvance patient services program for a period of 5 years;
• An order requiring Janssen to take certain actions, including appointing a monitor to oversee compliance with the order and communicating certain updates to health care professionals whose patients were enrolled in BioAdvance for STELARA (e.g., that FINLIUS is not a biosimilar and will not be marketed for 10 years); and
• An administrative monetary penalty in the amount of three times the value of the benefit Janssen derived from the conduct, which JAMP claimed amounted to at least $1 billion.

The Tribunal’s Decision

Test for Leave and Preliminary Interpretation Issue

In assessing whether to grant leave to a private party under the Act, the Tribunal must determine whether it has “reason to believe” that the applicant is directly and substantially affected in its business by the alleged conduct and whether that conduct could be subject to an order under section 79. While the legal threshold of “reason to believe” is lower than proof on a balance of probabilities, the Tribunal noted that this requires showing more than a “mere possibility”: the applicant must adduce “sufficient credible, cogent and objective evidence” to meet the statutory test for leave. 

As a preliminary issue, the Tribunal had to determine whether the applicant’s business must be affected in its entirety to succeed in an application for leave under section 79. It concluded that none of the text, context or purpose of the provision requires the Tribunal to only consider an impugned practice under section 79 where it impacts the applicant’s entire business. This conclusion is consistent with amendments to the Act scheduled to come into force in June 2025, which will explicitly modify the test for leave to allow private actions where the alleged conduct only affects part of the applicant’s business.

Should JAMP Be Granted Leave?

On an application for leave, the Tribunal does not make any conclusions as to whether the respondent has in fact engaged in the alleged conduct; it only considers whether the evidence is sufficient to satisfy the test for leave.

The Tribunal found JAMP’s application did not contain sufficient and cogent evidence of anticompetitive acts to give rise to a bona fide belief that an order could be made under section 79. JAMP also failed to adduce sufficient and cogent evidence that its business was directly and substantially affected (the Tribunal even found some of the alleged behaviour occurred after the alleged impact).

More specifically:

• Games and “sham” litigation: JAMP alleged that Janssen “gamed” the regulatory process and, upon receiving an unfavourable regulatory decision, commenced “sham” litigation it knew was unlikely to succeed. The Tribunal found that JAMP failed to adduce sufficient cogent evidence to meet the test for these claims, noting that JAMP did not engage with the merits of the patent listing or litigation, nor did it adduce evidence that the alleged games or sham litigation delayed its entry into the market.
• FINLIUS as a “fighting brand” at predatory prices: JAMP alleged that Janssen obtained Health Canada approval for FINLIUS at a strategic time in an attempt to delay or block entry of biosimilars. The Tribunal was not persuaded as Janssen had only launched the product three weeks before JAMP’s application for leave, and JAMP did not detail FINLIUS’ alleged negative exclusionary impact during that time period. The Tribunal also found no direct evidence of Janssen selling FINLIUS at predatory prices.
• Communications with physicians, insurers and patients: JAMP alleged that Janssen created uncertainty and delayed competition by sending “intentionally vague” communications or “half-truths” to prescribing physicians and making “insurance discovery” to steer patients and physicians to a Janssen product. The Tribunal found that, despite vigorous submissions on this theory, the evidence on these issues was very thin and primarily based on alleged omissions and vague statements that JAMP claims created uncertainty in the minds of physicians.
• Substantial lessening or prevention of competition (SLC/SPC): JAMP submitted that, but for Janssen’s alleged anticompetitive conduct, competitors would have introduced STELARA biosimilars earlier than they did and Janssen would not have generated a substantial portion of the revenues it did from STELARA. However, the Tribunal found that “JAMP did not do much more than describe the alleged SPC in its submissions” and it did not adduce evidence to quantify the effects in the market or address market power issues.

Conclusion

While Parliament’s recent expansion of the right of private action may increase litigation by supplementing the Commissioner’s challenges with more private applications, the JAMP decision is a reminder that the Tribunal will continue to play its important screening role to deny leave in appropriate cases. As in the JAMP decision, the Tribunal will thoroughly evaluate applications for leave to ensure only claims adequately supported in evidence will proceed to a full hearing on the merits. It remains to be seen whether this decision will have a cooling effect on the filing of applications for leave or lead to more robust evidentiary records and contests at the leave stage.

If you have any questions about this decision or private applications under the Competition Act, please contact the authors or another member of the Bennett Jones Competition/Antitrust group.

Authors