Home / Policies & Legislation / EU upholds decision to fine Lundbeck for violating competition law

EU upholds decision to fine Lundbeck for violating competition law Posted 30/09/2016

Lundbeck’s appeal of a 2013 decision to fine the company over Euros 90 million for ‘pay-to-delay’ deals on its blockbuster anti-depressant Cipramil (citalopram) has been rejected by European Union (EU) courts.

Lundbeck is a Danish pharmaceutical company specializing in drugs for a range of central nervous system disorders, from depression to Alzheimer’s disease. Back in June 2013, the company was the subject of legal action for making so called ‘pay-to-delay’ agreements with generics producers [1]. Under these agreements, Lundbeck paid generics makers to delay cheaper versions of its anti-depressant Cipramil – launched in 1989 and once the company’s best-selling drug – from entering the market, such that it could maintain a monopoly on the drug’s manufacture.

The European Commission’s Vice President Joaquín Almunia said paying off competitors in this way was ‘unacceptable’, and put patients and healthcare systems at risk. The decision found that Lundbeck’s agreements with several generics companies violated competition law, and the company was fined Euros 93.8 million as a result.

Lundbeck later appealed the Commission’s decision to the General Court [2], hoping the decision would be annulled or at least that the fine would be reduced, but this was recently rejected by the General Court.

The company said they strongly disagree with the decision, claiming that the agreements they made did not restrict competition and that they acted in good faith to protect their patents on the drug.

Lundbeck says it will consider this latest judgment before deciding whether to appeal again. If they do decide to appeal, they have only two months and 10 days from notification of the judgment, and must this time appeal to the European Court of Justice – the highest court in matters of EU law.

Lundbeck was not the only company affected by the decision – the fines announced in 2013 totalled US$146 million, and also targeted Merck KGaA, Ranbaxy, Arrow Group and Alpharma. Several of these companies also filed appeals.

Further pay-to-delay deals have recently hit the European courts. In 2014, French drugmaker Les Laboratoires Servier – along with five generics firms – received fines of Euros 427 million due to the delayed entry of generic perindopril, which is used to treat high blood pressure [3].

Similar arrangements have been prosecuted in the US, but have decreased in frequency following several years of action by the US Federal Trade Commission (FTC). The FTC reported only 21 pay-to-delay deals in 2014 – almost half of the 40 deals recorded in 2012.

Related article
Is the end in sight for pay-for-delay?

References
1. GaBI Online - Generics and Biosimilars Initiative. Lundbeck and 4 generics makers fined for pay-for-delay deals [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2016 Sep 30]. Available from: www.gabionline.net/Policies-Legislation/Lundbeck-and-4-generics-makers-fined-for-pay-for-delay-deals
2. GaBI Online - Generics and Biosimilars Initiative. Lundbeck fights back against EU pay-for-delay fine [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2016 Sep 30]. Available from: www.gabionline.net/Policies-Legislation/Lundbeck-fights-back-against-EU-pay-for-delay-fine
3. GaBI Online - Generics and Biosimilars Initiative. Servier and generics makers fined for pay-for-delay [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2016 Sep 30]. Available from: www.gabionline.net/Policies-Legislation/Servier-and-generics-makers-fined-for-pay-for-delay

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Source: European Commission; Lundbeck

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