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EC fines J&J and Novartis in pay-for-delay case

Says companies delayed entry of generic painkiller

The European Commission (EC) has bared its antitrust teeth once again, fining Johnson & Johnson (J&J) and Novartis more than €16m for delaying the entry of generic versions of a painkiller in the Netherlands.

J&J has been fined €10.8m and Novartis €5.5m in the case, which maintains that the two company entered into an anti-competitive agreement in 2005 to prevent the latter's Sandoz generics arm launching a competitor to a fentanyl patch product sold by J&J's Janssen-Cilag division.

The EC filed a statement of objections in January regarding a 17-month agreement between the firms that - according to the regulator - involved monthly payments from J&J to Sandoz in return for keeping the generic off the market.

The EC's Commissioner for Competition Policy, Joaquín Almunia, said in a statement that Sandoz "had produced the packaging material, obtained the necessary authorisations, and was about to launch its product" when the deal was struck.

"For 17 months, Dutch patients who needed this powerful painkiller had to pay an artificially high price for it, probably more than 30 per cent higher," he added, noting that part of the extra charge was borne by the national health system and by extension taxpayers.

"Such practices are simply intolerable," said Almunia. "They breach EU competition rules and the Commission will keep fighting them," he added.

Almunia noted that the EC continues to pursue cases against Servier and several generic companies concerning the cardiovascular medicine Coversyl/Aceon (perindopril), as well as Cephalon and Teva concerning narcolepsy treatment Provigil (modafinil). A case involving AstraZeneca and Nycomed was dropped last year.

Earlier this year Danish pharma company Lundbeck was fined almost €94m for a pay-for-delay deal involving its antidepressant Celexa/Cipramil (citalopram), although the company has rejected the accusations and appealed the decision. Eight generic drugmakers were fined another €52m in the case.

The Commission reported this week that the number of pay-for-delay agreements involving pharma companies in the EU has fallen since it first started probing the practice in 2008, including the use of patent dispute settlements as a cover for the transactions.

Four years ago the EC found that 22 per cent of all patent settlements between 2000 and 2008 were "potentially problematic", but this proportion dipped to 7 per cent in 2012.

Article by
Phil Taylor

11th December 2013

From: Sales, Regulatory



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