EU fines pharma companies for drug-delay deals

Former EU commissioner, Joaquín Almunia, was the independent evaluator picked by the ESM governors. [European Commission]

European Union antitrust regulators on Wednesday (9 July) fined French drugmaker Servier, Israel’s Teva and four others a total of €428 million, as part of a crackdown on deals which block cheaper generic medicine.

Regulators on both sides of the Atlantic have criticised such agreements, saying they boost the cost of drugs by as much as 20% for consumers.

The pharmaceutical industry defends these so-called ‘pay-for-delay’ deals, where brand-name drugmakers pay cheaper non-brand generics firms to hold back from launching rival medicines. They argue they help to avert lengthy and costly litigation.

“Servier had a strategy to systematically buy out any competitive threats to make sure that they stayed out of the market. Such behaviour is clearly anti-competitive and abusive,” European Competition Commissioner Joaquín Almunia said.

The Commission said Servier’s deals with the generics rivals between 2005 and 2007 were to protect its best-selling blood pressure medicine perindopril from competition in the EU.

Servier, France’s second-largest drugmaker, was hit with the biggest fine at €331 million. The world’s number one generic drugmaker Teva’s penalty was €15.57 million. Servier said it would challenge the EU ruling in court.

The other penalised companies include Unichem and its subsidiary Niche, as well as Matrix, which is now known as Mylan Laboratories, Slovenian peer Krka and Lupin.

The sanctions are the third by the Commission against pay-for-delay deals following fines in the past year against Denmark’s Lundbeck, Merck KGaA, the number one drugmaker in India Ranbaxy, Johnson & Johnson and Novartis.

The EU’s executive is currently examining a similar deal between Teva and US peer Cephalon, which is now part of the Israeli company, related to a pill for sleeping disorder.

Pauline Constant, the European Consumer Organisation's (BEUC) communications officer on health issues, commented:

“Pharma companies adopting anti-competitive practices to profiteer and deny consumers access to cheaper medicines are all grave breaches of EU laws. This comes at a time when consumers are bearing the brunt of the crisis and when many cannot even afford basic healthcare. If cheaper drugs exist, consumers have a right to access them. Such ‘pay for delay’ deals harm not only consumers, but public healthcare budgets. The amount of the fine is significant, but the Servier laboratory, like many before, might just consider it the cost of doing business. This case echoes Italy’s fine of the Roche Novartis cartel for their backroom deal on Avastin and Lucentis eye treatments. But we are still waiting for the European Union to show the same strictness as today by launching an EU-wide investigation into that debacle."

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