Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Johnson & Johnson, Novartis fined by EC for restraining generic competition for pain killer, (Dec 10, 2013)
Organizations Mentioned:Janssen-Cilag B.V. | Johnson & Johnson | Novartis AG | Sandoz B.V.
By Jeffrey May, J.D.
The European Commission (EC) announced today that it has fined U.S.-based Johnson & Johnson and Novartis of Switzerland a total of more than €16 million for delaying market entry of a cheaper generic version of the pain-killer fentanyl in the Netherlands. J&J was fined €10,798,000, and Novartis was fined €5,493,000 for the competition law violation.
On January 31, the EC disclosed that it had issued a statement of objections (SO) to J&J and Novartis, following an investigation that commenced in 2011 into an agreement between the companies’ respective Dutch subsidiaries. The EC has now concluded that the agreement delayed the entry of a cheaper generic medicine for 17 months and kept prices for fentanyl in the Netherlands artificially high.
According to the EC, when Novartis subsidiary Sandoz B.V. was on the verge of launching a generic fentanyl patch in July 2005, J&J’s Dutch subsidiary, Janssen-Cilag B.V., entered into a so-called “co-promotion agreement” with Sandoz. Janssen-Cilag purportedly made payments to Sandoz for as long Sandoz stayed out of the market. The agreement was stopped in December 2006 when a third party was about to launch a generic fentanyl patch, according to the EC.
“Today’s decision is yet another warning that these so-called ‘pay for delay’ agreements are illegal in the European Union,” said Joaquín Almunia, Vice President for EC Competition Policy. “Companies across the sector should think twice before entering into deals of this type, as they will be pursued and eventually sanctioned through the enforcement of antitrust rules.” Almunia warned that there were other “cases in the pipeline which we are actively investigating.”
The announcement concerning the fines against J&J and Novartis comes just one day after the EC released a report indicating that the number of patent settlement agreements concluded between originator and generic companies in the pharmaceutical sector that may give rise to antitrust concerns remained at a low level in 2012. Some patent settlement agreements in the drug industry have been used to delay the market entry of cheaper generic medicines.
Companies: Johnson & Johnson; Novartis AG; Janssen-Cilag B.V.; Sandoz B.V.
News: Antitrust