The European Union's antitrust watchdog has initiated a formal investigation into allegations of anticompetitive behavior by Zoetis Inc., a major player in the animal health industry. The probe centers on whether Zoetis unlawfully stifled competition by acquiring a pipeline product aimed at treating pain in dogs and subsequently terminating a deal that would have allowed a potential competitor to bring it to market.

Zoetis Investigated for EU Antitrust Breach Over Dog Pain Drug : Acquisition and Allegations

The European Commission revealed on Tuesday that it is looking into claims suggesting that Zoetis, during the development phase of its Librela drug, purchased a late-stage pipeline product from a competitor and then halted its progress. This move allegedly occurred after a third party, described as a "potential competitor," had already secured an agreement to commercialize the product.

First of Its Kind Investigation

This investigation marks the EU's inaugural formal probe into the termination of a pipeline product that a third party intended to market. Margrethe Vestager, the commission's executive vice president of competition policy, emphasized the significance of fostering competition in the veterinary medicine sector, asserting that consumers should have access to a variety of safe, innovative, and cost-effective medications for their pets.

Zoetis Investigated for EU Antitrust Breach Over Dog Pain Drug : Background on Zoetis

Zoetis, established in 2013 after spinning off from Pfizer, is a leading American animal health company. Its Librela drug, which employs monoclonal antibodies to combat osteoarthritis in dogs, is particularly beneficial for older canine patients.

Complaints and Inspection

The investigation stems from a complaint lodged by Virbac, a French competitor of Zoetis, in 2020. Virbac alleged potential breaches of the EU's antitrust regulations concerning the drug. This prompted surprise inspections at Zoetis' facilities in Belgium.

Contentions and Clarifications

While Zoetis maintains that the probe relates to an experimental compound acquired seven years ago, presumably through its acquisition of Nexvet Biopharma PLC, it hasn't confirmed the specific acquisition in question. The company insists that both the acquisition and the decision to discontinue development were lawful and well-founded.

Zoetis Investigated for EU Antitrust Breach Over Dog Pain Drug : Concerns and Consequences

The European Commission expressed concerns that Zoetis' actions may have obstructed market entry for a rival product to Librela. The investigation aims to determine whether Zoetis engaged in exclusionary practices by halting development and withholding the pipeline medication from the third party.

Response and Future Proceedings

Zoetis affirmed its commitment to cooperating with the European Commission throughout the investigation process. The commission noted that there is no set deadline for the case, citing factors such as cooperation, defense proceedings, and the complexity of the matter. However, it assured that the case will be handled as a priority.

Zoetis Investigated for EU Antitrust Breach Over Dog Pain Drug : Conclusion

As the investigation unfolds, the spotlight remains on Zoetis and its alleged anticompetitive conduct, underscoring the importance of fair competition and market access in the animal health industry.