Danish drugmaker Lundbeck has been handed a 93-million-euro fine in Europe for paying companies to delay market entry for their generic versions of the antidepressant citalopram, signalling a much tougher stance on such agreements.
Following a three-year investigation involving the firm, the European Commission has concluded that an agreement between Lundbeck and four generic competitors, which effectively prevented cheaper generic forms of the drug from entering the market, was indeed a violation of competition law.
According to the regulator, rather than prevent the entry of generic competition by enforcing its patent rights, the drugmaker paid off other companies not to launch their rivals, giving them what they would have earned if they had entered the market.
"This means they shared the monopoly rents among themselves: one internal document even speaks of this group of companies as a "club" and refers to "a pile of dollars" being shared among participants," said Joaquín Almunia, Vice President of the EC responsible for Competition Policy.
"All this occurred at the expense of patients who were deprived of access to cheaper medicines. It also harmed our public health systems, who for a longer period had to artificially bear the costs of an expensive medicine – and one of the most widely prescribed antidepressants," he added.
Lundbeck, however, said it "strongly disagrees" with the decision and intends to appeal.
The agreements, it claims, did not restrict competition in the market beyond the protection already offered by society via the patent rights held by the company.
"Over 600 meticulous analyses of the generic citalopram demonstrated that they were all produced with infringing processes. Furthermore, in many concurrent documents the generic companies acknowledged that their products violated Lundbeck's patents," it argues.
In "good faith"
Lundbeck insists that it "acted transparently and in good faith" in trying to protect its patents, and points out that the agreements "were all reviewed by external anti-trust experts" as well as both the EC and the Danish Competition Authorities.
But it seems regulators are now taking a different view. "These so-called ‘pay-for-delay’ deals constitute severe infringements of EU competition law. They may cause severe harm to patients and taxpayers and must be sanctioned accordingly," Alumnia said.
"Paying competitors to stay out of the market at the expense of European citizens has nothing to do with the legitimate protection of intellectual property: it is an illegal practice and the Commission will fight against it," he warned.
The move comes just days after the US Supreme Court concluded that "pay for delay" deals should be open to antitrust scrutiny, with the judge noting that under such agreements "the patentee and the challenger gain, the consumer loses".