EU Court Upholds Stiff Fines on Pay-to-Delay Pharmaceutical Scheme

Europe’s highest court upheld fines of about $177 million against Danish drug company Lundbeck and several generic drugmakers found to have struck deals to keep generic antidepressants off the market.

(Image by Hayleybarcar from Pixabay via Courthouse News)

(CN) — Danish drugmaker Lundbeck and several generic drug companies lost their appeal Thursday of about $177 million in fines they face for working to keep cheaper antidepressants off the market, in violation of EU antitrust rules.

The European Commission levied the fines in 2013, saying that Lundbeck had illegally cornered the market for its blockbuster antidepressant medicine containing citalopram, a formula it developed in the 1970s.

In 2002, as its original patent for a key citalopram molecule expired, Lundbeck paid generic drugmakers not to market their own citalopram products while also buying their stocks of the antidepressants. The Danish company paid roughly an amount corresponding to the profits its rivals might have made by marketing their cheaper citalopram-based antidepressants. At the time, the antidepressant was Lundbeck’s top-selling drug.

“The agreements at issue,” the European Court of Justice said in a statement about its ruling Thursday, delayed the entry of generic drugs and “belong to that category of practices which are particularly harmful to competition.”

In addition to Lundbeck, which faces a fine of about $110 million for keeping competitors off the market as part of an illegal cartel, four other companies were fined $61.7 million. The other companies are Generics UK, at the time a subsidiary of pharmaceutical giant Merck, Arrow, Alpharma and Ranbaxy.

The European Commission, the EU’s executive body, launched the underlying investigation in 2008 after a report five years earlier from a Danish antitrust agency. After the commission ruled that Lundbeck and its rivals had broken fair competition rules, they fired back with a six-part challenge. Thursday’s ruling from the European Court of Justice in Luxembourg, the bloc’s highest court, affirms a 2016 decision by a lower tribunal.

The case is part of a years-long fight by the commission against pay-for-delay deals in the drug industry that it says stunt competition and innovation.

Courthouse News reporter Cain Burdeau is based in the European Union.

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