EU Commission fines Lundbeck and other Pharmas over 'pay-for-delay' deals

In a much awaited decision following its investigations of patent settlements (or pay-for-delay deals) between pharmaceutical companies and generic drugmakers started in 2008, the European Commission revealed today (June 19) that it has imposed a fine of 93.8 million euros ($125 million) on Danish pharmaceutical company Lundbeck (LUND: CO) and fines totalling 52.2 million euros on several producers of generic medicines.

In 2002, says the Commission, Lundbeck agreed with each of these companies to delay the market entry of cheaper generic versions of Lundbeck's branded citalopram, a blockbuster antidepressant. These agreements violated European Union antitrust rules that prohibit anticompetitive agreements (Article 101 of the Treaty on the Functioning of the European Union – TFEU). These generic companies were notably Alpharma (now part of Zoetis, fined 10.5 million euros), Merck KGaA (fined 21.4 million euros)/Generics UK (Generics UK is now part of Mylan, fined 7.8 million euros), Arrow (now part of Actavis, fined 10.0 million euros) and Ranbaxy (fined 10.3 million euros).

The news comes as a further blow to the research-based pharmaceutical industry, which is still digesting the implications of a US Supreme Court ruling this week on drug patent settlements, with Justices voting by a majority of five to three that the US Federal Trade Commission has the right to challenge such deals (The Pharma Letter June 18).