Danish pharma firm faces EU antitrust probe

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The European Commission has launched an investigation into possible anticompetitive behaviour by Danish drug company Lundbeck, just months after the conclusion of a lengthy inquiry into the pharmaceutical sector.

The firm, which developed anti-depressant medicine Citalopram, stands accused of hindering the entry of a generic form of the drug onto European markets. Lundbeck said it will cooperate with the investigation but insists it has broken no laws. 

Antitrust officials in Brussels said it would look at whether the company broke EU rules on restrictive business practices and abuse of a dominant market position. 

“The Commission in particular intends to investigate unilateral behaviour and agreements by Lundbeck which may hinder the entry of generic Citalopram into markets in the European Economic Area,” the EU executive said in a statement. 

It said that knowledge acquired during the pharmaceutical sector inquiry, specifically on ways in which originator companies obstruct the availability of generics, had helped inform its decision to target Lundbeck. 

The Commission said its investigation would be dealt with as a matter of priority, although it did not set a timeline for concluding the probe. 

A spokesperson for the company said it has “nothing to hide” and added that “all relevant national and EU competition legislation” had been abided by. 

Lundbeck said the investigation would have no influence on its financial results for 2009. Its shares traded up 1.8% in the immediate aftermath of the announcement in Brussels. 

The antitrust arm of the EU executive has repeatedly locked horns with big business in recent years, notably in its high-profile case against Microsoft and a separate decision to impose a record €1 billion fine on Intel for competition breaches (EURACTIV 14/05/09). 

Background

Outgoing Competition Commissioner Neelie Kroes has had a fraught relationship with the pharmaceutical industry, conducting a robust probe into anticompetitive practices in the sector. 

Over a torrid two-year period, EU officials conducted dramatic dawn raids on the offices of blue-chip drug companies, much to the chagrin of industry leaders (EURACTIV 17/01/0926/11/08). 

A damning preliminary report was published in November 2008, which alleged that anti-competitive practices in the sector have hampered innovation and blocked the entry of cheap generics onto the European market (EURACTIV 28/11/08). 

However, the final version, published in July 2009, struck a less confrontational tone (EURACTIV 09/07/09). Kroes pulled no punches at the publication of the report, describing some deals between some firms as "rotten" and implying that companies effectively agree to delay the release of new drugs. 

The commissioner said last year that her officials would continue to investigate pharmaceutical companies on a case-by-case basis. 

The EU executive this week pledged to improve transparency in its antitrust procedures, publishing a series of documents designed to make competition cases more predictable for companies under investigation (EURACTIV 07/01/10). 

Further Reading

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