Rethinking the legal test for excessive pricing: insights from the landmark UK CMA v Pfizer/Flynn Case and its legal implications.

This article focuses on the legal treatment of excessive pricing in the pharmaceutical sector, analyzing the UK Competition and Market Authority's (CMA) approach in the Pfizer/Flynn case and its subsequent appeal. It examines how UK courts have interpreted the two-limb United Brands test—which assesses whether prices are excessive relative to costs and unfair either "in themselves" or compared to competing products—and the impact of these rulings on the CMA's enforcement strategy. The article highlights that while the CMA primarily uses a cost-plus methodology incorporating profitability benchmarks such as return on capital employed (ROCE) and return on sales (ROS) to assess excessiveness and unfairness, UK courts have imposed procedural burdens requiring the CMA to consider both limbs of unfairness cumulatively, potentially complicating future investigations. Comparative analysis with other European National Competition Authorities and the European Commission's Aspen decision reveals consistent application of the United Brands test but differing procedural approaches, with the CMA's expanded evidentiary requirements possibly leading to increased investigatory challenges.