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EU fines J&J, Novartis 16M euros over pay-for-delay deal

World News | December 10, 2013


Lynne Taylor

EU fines J&J, Novartis 16M euros over pay-for-delay deal

The European Commission has fined Johnson & Johnson (J&J) just under 10.8 million euros and Novartis 5.49 million euros, after finding that their subsidiaries in the Netherlands had agreed an anticompetitive deal aimed at delaying the market entry there of a generic version of the painkiller Duragesic (fentanyl), thus breaching European Union (EU) antitrust rules.
 
Fentanyl is prescribed widely for cancer patients and is 100 times more potent as a painkiller than morphine. The payment by J&J to Novartis “shockingly deprived patients in the Netherlands, including people suffering from cancer, from access to a cheaper version of this medicine,” said Joaquin Almunia, the European Commission vice president in charge of competitive policy.
 
“Today’s decision should make pharmaceutical companies think twice before engaging in such anticompetitive practices, which harm both patients and taxpayers,” he added.
 
Fentanyl was initially developed by J&J, which has commercialised it in different formats since the 1960s. In 2005, J&J’s protection of the fentanyl depot patch had expired in the Netherlands, and Novartis’ Dutch subsidiary, Sandoz, was about to launch its generic fentanyl depot patch.
 
However, in July that year Sandoz concluded a “co-promotion agreement” with J&J’s Dutch subsidiary Janssen-Cilag which, says the Commission, provided “strong incentives” for Sandoz not to enter the market, with agreed monthly payments exceedig the profits that Sandoz had expected to obtain from selling its generic version, for as long as there was no generic entry.
 
The deal ended in December 2006 when a third party was about to launch a generic fentanyl patch.
 
“The agreement therefore delayed the entry of a cheaper generic medicine for 17 months and kept prices for fentanyl in the Netherlands artificially high - to the detriment of patients and taxpayers who finance the Dutch health system,” says the Commission.
 
It quotes internal documents as stating that, instead of competing, Janssen-Cilag and Sandoz agreed on cooperation so as “not to have a depot generic on the market, and in that way to keep the high current price.”  Janssen-Cilag did not consider any other existing potential partners for the co-promotion agreement but just focused on its close competitor Sandoz, while the latter engaged in very limited or no actual co-promotion activities, says the Commission.
 
In a statement, Novartis and Sandoz say they “reject the Commission’s allegation that the 2005 co-promotion agreement was intended to deprive patients in the Netherlands of cheaper medicines.”
 
‘We look forward to putting this historical matter behind us,” they add.

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