European Commission issues Statements of Objections against several pharmaceutical companies

On 25 and 30 July 2012, in relation to the Citalopram case and the Perindopril case respectively, the European Commission sent statements of objections (“SOs”) to more than a dozen companies in connection with these two antitrust investigations in the pharmaceutical sector. The Commission also issued a note highlighting its current enforcement action in pharmaceutical sector following its inquiry.

In the Perindopril case, the SO was sent to the French pharmaceutical company Servier and several of its generic competitors – a list of which is available in the Commission press release – in connection with practices potentially delaying the generic entry of perindopril, a cardio-vascular medicine, possibly in breach of the EU Antitrust rules that prohibit restrictive business practices and the abuse of a dominant market position, respectively Articles 101 and 102 of the Treaty on the Functioning of the European Union (“TFEU”). The Commission had opened proceedings against Servier and other companies on 8 July 2009 (see Newsletter 4/2009 for additional background).

The Commission’s objections relate to two specific sets of practices by Servier, aimed at delaying or preventing the market entry of cheap generic versions of perindopril and ultimately to preserve Servier’s dominant position with regard to perindopril, which was about to reach the end of its patent protection. Firstly, as part of a comprehensive strategy, Servier acquired scarce competing technologies to produce perindopril, rendering the generic market entry more difficult or delayed. Secondly, in exchange for payments by Servier, generic competitors were induced to conclude patent settlements and/or not to challenge the validity of the patents that protected Servier’s branded drug.

In the Citalopram case, the Commission took the preliminary view that Lundbeck concluded agreements with generic companies to prevent the market entry of competing generic versions of its best-selling medicine citalopram, a blockbuster antidepressant, in breach of Article 101 TFEU. In fact, the agreements foresaw direct payments from Lundbeck to the generic competitors as well as the purchase of generic citalopram stock for destruction or guaranteed profits in a distribution agreement. In essence, generic manufacturers subsequently abstained from entering the market with generic citalopram for up to two years, although in principle they could do so when certain of Lundbeck’s citalopram patents had expired.

Together with the Servier investigation this is the first case that deals with the so-called “pay for delay” agreements. According to the Commission, such practices, if established, would be likely to cause significant consumer harm as national health services or insurance schemes are then forced to continue paying for the more expensive patent protected versions of a medicine when, absent the practices, cheaper generic medicines would have been available earlier. [Gabriele Accardo]