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| Europe Fines Drug Companies for Delaying Generics | |
| (about 1 hour later) | |
| BRUSSELS — Europe’s top antitrust enforcer on Wednesday continued a campaign on both sides of the Atlantic to crack down on drug company efforts to keep low-cost generic versions of their medicines off the market, fining a Danish pharmaceutical and a number of generic producers a total of €146 million, or $195 million. | BRUSSELS — Europe’s top antitrust enforcer on Wednesday continued a campaign on both sides of the Atlantic to crack down on drug company efforts to keep low-cost generic versions of their medicines off the market, fining a Danish pharmaceutical and a number of generic producers a total of €146 million, or $195 million. |
| The European Commission said that Lundbeck of Denmark colluded with companies including Ranbaxy of India and Merck of Germany in 2002 and 2003 to delay market entry of a less-expensive generic version of Lundbeck’s blockbuster antidepressant called citalopram. | The European Commission said that Lundbeck of Denmark colluded with companies including Ranbaxy of India and Merck of Germany in 2002 and 2003 to delay market entry of a less-expensive generic version of Lundbeck’s blockbuster antidepressant called citalopram. |
| Lundbeck, fined €93.8 million, the highest amount, went as far as destroying significant quantities of the less expensive version of the drug, according to Joaquín Almunia, the competition commissioner, whose office enforces antitrust law on behalf of the 27-nation European Union. | Lundbeck, fined €93.8 million, the highest amount, went as far as destroying significant quantities of the less expensive version of the drug, according to Joaquín Almunia, the competition commissioner, whose office enforces antitrust law on behalf of the 27-nation European Union. |
| The commission can fine companies up to 10 percent of their most recent annual worldwide sales. The fine against Lundbeck amounts to about 4.6 percent of its 2012 sales of €2 billion. | The commission can fine companies up to 10 percent of their most recent annual worldwide sales. The fine against Lundbeck amounts to about 4.6 percent of its 2012 sales of €2 billion. |
| “All this occurred at the expense of patients who were deprived of access to cheaper medicines,” Mr. Almunia said at a news conference Wednesday. “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.” | “All this occurred at the expense of patients who were deprived of access to cheaper medicines,” Mr. Almunia said at a news conference Wednesday. “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.” |
| The case mirrors a decision on Monday by the United States Supreme Court that is likely to increase the number of generic drugs in the marketplace to benefit consumers. Like the U.S. decision, which empowered the Federal Trade Commission to sue drug makers that engage in so-called pay-for-delay tactics, the European case focused on efforts by a major pharmaceutical company to slow or block the availability of cheaper versions of medicines. | The case mirrors a decision on Monday by the United States Supreme Court that is likely to increase the number of generic drugs in the marketplace to benefit consumers. Like the U.S. decision, which empowered the Federal Trade Commission to sue drug makers that engage in so-called pay-for-delay tactics, the European case focused on efforts by a major pharmaceutical company to slow or block the availability of cheaper versions of medicines. |
| The European Commission has other cases still pending, including one against the drug giants Johnson & Johnson and Novartis. | The European Commission has other cases still pending, including one against the drug giants Johnson & Johnson and Novartis. |
| Many governments in Europe buy or help pay for prescription drugs used by citizens under socialized medical systems, which means the blocking of generics imposes a financial burden on national budgets. Mr. Almunia said that once generic versions of citalopram became available in Britain, during the second half of 2004, prices there dropped by 90 percent. | Many governments in Europe buy or help pay for prescription drugs used by citizens under socialized medical systems, which means the blocking of generics imposes a financial burden on national budgets. Mr. Almunia said that once generic versions of citalopram became available in Britain, during the second half of 2004, prices there dropped by 90 percent. |
| The scale of savings seen in Britain helped ensure that “public health systems can remain economically sustainable in these times of difficult budgetary constraints,” said Mr. Almunia. The drug makers’ collusion had affected “the budgets of states and households,” he said. | The scale of savings seen in Britain helped ensure that “public health systems can remain economically sustainable in these times of difficult budgetary constraints,” said Mr. Almunia. The drug makers’ collusion had affected “the budgets of states and households,” he said. |
| But Lundbeck said it had done nothing wrong and would appeal the decision. | But Lundbeck said it had done nothing wrong and would appeal the decision. |
| “The company acted transparently and in good faith in trying to protect our patents,” Lundbeck said in a statement posted to its Web site. “Upon entering the agreements they were all reviewed by external antitrust experts.” | “The company acted transparently and in good faith in trying to protect our patents,” Lundbeck said in a statement posted to its Web site. “Upon entering the agreements they were all reviewed by external antitrust experts.” |
| As Monday’s Supreme Court decision indicates, the issue is a live one in the United States and Europe alike. The Federal Trade Commission says that pay-for-delay deals cost Americans $3.5 billion a year in higher drug prices. | As Monday’s Supreme Court decision indicates, the issue is a live one in the United States and Europe alike. The Federal Trade Commission says that pay-for-delay deals cost Americans $3.5 billion a year in higher drug prices. |
| “On both sides of the Atlantic regulators are increasingly regarding generic makers not entering the market as soon as they could have done as potentially anti-competitive,” said Richard A. Ripley, a partner with Haynes & Boone in Washington, who has clients in the pharmaceutical sector but represents none of the parties in the Lundbeck case. | “On both sides of the Atlantic regulators are increasingly regarding generic makers not entering the market as soon as they could have done as potentially anti-competitive,” said Richard A. Ripley, a partner with Haynes & Boone in Washington, who has clients in the pharmaceutical sector but represents none of the parties in the Lundbeck case. |
| Peter Kaplan, a spokesman for the Federal Trade Commission, had no comment on the decision made by Mr. Almunia on Wednesday. But he indicated that officials on both sides of the Atlantic had been coordinating on the issue of drug pricing. | Peter Kaplan, a spokesman for the Federal Trade Commission, had no comment on the decision made by Mr. Almunia on Wednesday. But he indicated that officials on both sides of the Atlantic had been coordinating on the issue of drug pricing. |
| “F.T.C. staffers have had productive policy discussions with their counterparts in the E.U. on the pay-for-delay issue, which is a longstanding enforcement priority at the F.T.C.,” Mr. Kaplan said. “These discussions have benefited both agencies.” | “F.T.C. staffers have had productive policy discussions with their counterparts in the E.U. on the pay-for-delay issue, which is a longstanding enforcement priority at the F.T.C.,” Mr. Kaplan said. “These discussions have benefited both agencies.” |
| And while European Union officials said their decision on Wednesday was not timed to follow the Supreme Court decision, Mr. Almunia said, “We are in good company in this approach.” | And while European Union officials said their decision on Wednesday was not timed to follow the Supreme Court decision, Mr. Almunia said, “We are in good company in this approach.” |
| Mr. Almunia’s office said that instead of competing with Lundbeck when its basic patent on the drug citalopram expired, various generic makers colluded with the Danish company in 2002 to not enter the market in return for “substantial payments and other inducements from Lundbeck amounting to tens of millions of euros.” | Mr. Almunia’s office said that instead of competing with Lundbeck when its basic patent on the drug citalopram expired, various generic makers colluded with the Danish company in 2002 to not enter the market in return for “substantial payments and other inducements from Lundbeck amounting to tens of millions of euros.” |
| Commission officials said that they had found documents referring to a “'club’ being formed and ‘a pile of $$$’ to be shared among the participants.” Lundbeck also purchased supplies of generic versions of the medicine “for the sole purpose of destroying it,” the officials said. | Commission officials said that they had found documents referring to a “'club’ being formed and ‘a pile of $$$’ to be shared among the participants.” Lundbeck also purchased supplies of generic versions of the medicine “for the sole purpose of destroying it,” the officials said. |
| The decision against Lundbeck was the first in a pay-for-delay case, Mr. Almunia said, “but I can promise you it’s not the last one.” | The decision against Lundbeck was the first in a pay-for-delay case, Mr. Almunia said, “but I can promise you it’s not the last one.” |
| Early this year, the commission accused the drug giants Johnson & Johnson and Novartis of colluding to delay the availability of a less expensive generic version of a powerful medication, fentanyl, often used to ease severe pain. | Early this year, the commission accused the drug giants Johnson & Johnson and Novartis of colluding to delay the availability of a less expensive generic version of a powerful medication, fentanyl, often used to ease severe pain. |
| A year ago, the commission accused the French pharmaceutical company Servier and several of its generic competitors of delaying the generic entry of perindopril, a cardiovascular medicine. | A year ago, the commission accused the French pharmaceutical company Servier and several of its generic competitors of delaying the generic entry of perindopril, a cardiovascular medicine. |
| And in 2011, the commission opened an investigation into whether the U.S.-based pharmaceutical company Cephalon and the Israel-based generic maker Teva of hindering the entry of the generic version of modafinil, used for the treatment of certain types of sleeping disorders. Those three cases still are pending. | And in 2011, the commission opened an investigation into whether the U.S.-based pharmaceutical company Cephalon and the Israel-based generic maker Teva of hindering the entry of the generic version of modafinil, used for the treatment of certain types of sleeping disorders. Those three cases still are pending. |