The European Commission has charged Lundbeck and eight other pharmaceutical companies (including Merck KGaA, Ranbaxy and Alpharma) regarding alleged ‘pay-for-delay’ tactics relating to the Danish drugmaker’s antidepressant Celexa.
The Commission has issued a ‘statement of objections’ to Lundbeck regarding agreements concluded with four generic competitors concerning Celexa (citalopram). It is claimed that the generics companies “abstained from entering the market” and received “direct payments as well as other forms such as purchase of generic citalopram stock for destruction or guaranteed profits in a distribution agreement”.
The EC says it has taken “the preliminary view that this may have caused substantial consumer harm, since generic entry was delayed and prices remained high as a result of the agreements”. If the Commission concludes that there is sufficient evidence of an infringement, it can issue a decision prohibiting the conduct and impose a fine of up to 10% of a company’s annual worldwide turnover.
Allegations ‘groundless’ – Lundbeck
Lundbeck has responded by saying that its “business practices are consistent with all relevant national and EU competition legislation”. The firm added that it is cooperating fully in the investigation and “is confident the allegations made by the Commission should be rejected as groundless”.
The Commission also noted that is also planning to take “further steps in the coming days” in the investigation concerning Servier’s cardiovascular drug Aceon (perindopril) and agreements signed to stop generics. It has opened proceedings against Cephalon and Teva and Johnson & Johnson, Novartis and its generic branch Sandoz for possible violations of competition rules, including practices involving generic companies.
However the Commission, which has been scrutinising drugmakers for the last three years, not least in terms of pay-for-delay, noted that one of the main findings of its sector inquiry was that “competitive pressure from generic producers, once the primary patent of the originator medicine had expired, was not as strong as expected”. In publishing its third patent settlement monitoring report, it notes that “the proportion of such potentially problematic settlements has stabilised at a low level of 11% vis-a-vis 21% in the findings of the sector inquiry”.
At the same time, “the total annual number of concluded settlements has increased by 500% to 120 compared to the findings of the sector inquiry [but] most of them appear to be unproblematic from an antitrust perspective”, it adds.
