Recent events have confirmed the focus of competition authorities in general on the pharmaceutical industry particularly to combat anti-generic practices.
On December 10, 2013, the European Commission fined the laboratories Johnson & Johnson and Novartis for delaying the market entry of generics by deploying “pay for delay” tactics.
On December 18, 2013, it was the French Competition Authority’s turn, when it sanctioned Schering Plough and Reckitt Benckiser for obstructing the development of a generic of Subutex, a medicine used to treat heroine dependence. Schering Plough was appointed in 1997 by Reckitt Benckiser, the holder of the rights in Subutex, to commercialize it in France on an exclusive basis. However, alarmed by Arrow’s decision to introduce a generic, it adopted a commercial strategy, with the support of Reckitt Benckiser, to slow down the generic’s introduction:
- a global structured campaign aimed at healthcare professionals disparaging the generic both before and after it was placed on the market, accompanied by a clear incitement not to use it as a substitute, whereas this campaign was not backed up by any medical or scientific justification:
- in addition to the maximum quantity discounts which could be granted for sales of the branded drug, introduction of a system of supplementary rebates granted to pharmacists, without any economic justification, in exchange for feedback from the pharmacies. These discounts, combined with extended payment times, were intended to encourage pharmacists to stock up on Subutex before the generic arrived.
The Authority considered these practices to be not only an abuse of Schering Plough’s dominant position on the market but also an unlawful agreement with Reckitt Benckiser, and thus handed out two fines to Schering Plough plus a 50% increase for belonging to a major group, in very sharp contrast with the 15% coefficient usually applied.
This decision has already been commented on in the Authority’s opinion of December 19, 2013, following its sector enquiry into the distribution of medicines to retail pharmacies. The Authority insisted more particularly on the necessity of encouraging the development of generics to counteract their negative image in the public’s eyes. It recommended that the authorities launch information campaigns about generics aimed at patients, pharmacists and practitioners, but also that the laboratories adopt good practices, like the undertakings made by Schering Plough in this case: two years before a patent expires, it will provide specific training to the sales teams to curb any disparagement.
Janssen Cilag is another laboratory currently involved in a case of disparagement. It is to be hoped that the Authority will use restraint when deciding on the amount of any fines imposed in a pharmaceutical sector already reeling from the collapse of their blockbusters, the reduction in public spending and the slowdown in the end consumption of medicines.