The European Commission yesterday imposed a fine of Euro 93.8 million on Danish pharmaceutical company Lundbeck and fines totalling Euro 52.2 million on several producers of generic medicines for allegedly delaying the market entry of Citalopram, an antidepressant medicine.
The European Commission found that Lundbeck had essentially paid off its competitors to stay out of the market and delay the entry of cheaper generic medicines. According to the European Commission's press release, "the generic producers agreed with Lundbeck in 2002 not to enter the market in return for substantial payments and other inducements from Lundbeck amounting to tens of millions of euros. Internal documents refer to a "club" being formed and "a pile of $$$" to be shared among the participants. Lundbeck paid significant lump sums, purchased generics' stock for the sole purpose of destroying it, and offered guaranteed profits in a distribution agreement". The payments are alleged to have occurred after the basic patent for the Citalopram molecule had expired, but while Lundbeck still held a number of related process patents.
This fine is the first European Commission fine for "pay-for-delay" payments in the pharmaceutical sector. It follows very swiftly on from Monday's important US Supreme Court judgment in FTC v. Actavis (see our e-alert here) which analysed in detail the legal standard by which to assess pharmaceutical patent settlement agreements involving "pay-for-delay" agreements.