EU court to rule on drugmaker Lundbeck's pay-for-delay deals

by Reuters
Tuesday, 6 September 2016 16:29 GMT

By Foo Yun Chee

BRUSSELS, Sept 6 (Reuters) - Europe's top court will rule on Thursday whether Danish drugmaker Lundbeck breached EU antitrust rules by paying smaller rivals to delay generic copies of its blockbuster citalopram anti-depressant from entering the market.

The cases, among several before the Luxembourg-based Court of Justice of the European Union, are being closely watched by the pharmaceuticals industry fighting to preserve a longstanding business practice.

Antitrust authorities on both sides of the Atlantic have been investigating pay-for-delay deals for several years, prompted in part by the high costs borne by cash-strapped national health systems.

In June 2013 the European Commission said such agreements were anti-competitive as it imposed a 146 million euro ($164 million) fine on Lundbeck and eight other drugmakers including Ranbaxy Laboratories, which was later acquired by India's largest drugmaker Sun Pharmaceutical Industries Ltd.

Lundbeck, Merck KGaA, Generics (UK), Arrow Group, Sun Pharmaceutical Industries, Xellia Pharmaceuticals and Alpharma later took their cases to court. Judges will rule on all six cases on Thursday. The industry says pay-for-delay deals prevent costly and lengthy litigation.

"The Commission sees some of these deals as undercover market sharing arrangements whereby the brand and the generic manufacturer may share monopoly rents instead of competing," said lawyer Alfonso Lamadrid at Garrigues.

The Commission's decisions followed an inquiry into the sector in 2008-2009. Israeli drugmaker Teva Pharmaceutical Industries and France's Servier have also challenged the decisions and fines in separate but similar cases.

In June 2013, the U.S. Supreme Court ruled that such deals could potentially be a violation of antitrust law, although it refused a Federal Trade Commission request to declare them to be presumed to be illegal. Since then branded drug companies have struck far fewer such deals with generic drugmakers.

In February, Britain's competition watchdog fined GlaxoSmithKline 37.6 million pounds ($50.50 million) for market abuse in striking deals to delay the launch of generic versions of its former blockbuster antidepressant Seroxat. GSK said it disagreed with the decision.

The cases are T-472/13 Lundbeck v Commission, T-471/13, T-471/13, T-469/13, T-467/13 and T-467/13. ($1 = 0.8901 euros) ($1 = 0.7445 pounds) (Additional reporting by Ben Hirschler in London; editing by Susan Thomas)

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