Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Pharmaceutical pay-for-delay agreements violate EU law, General Court holds, (Sep 8, 2016)

By Greg Hammond, J.D.

The European General Court today upheld the European Commission’s decision imposing fines on Danish pharmaceutical company Lundbeck and four generic companies for entering into agreements that delayed the release of generic citalopram—a blockbuster antidepressant—into the market. This judgment marks the first time the General Court has ruled that pharmaceutical pay-for-delay agreements violate European Union (EU) antitrust rules, according to the European Commission (EC).

In 2013, the EC fined Lundbeck €93.8 million and generic companies Generics UK, Arrow, Alpharma, and Ranbaxy a total of €52.2 million for the anticompetitive agreements. In particular, the EC found that, in 2002, Lundbeck agreed with each of the four generic pharmaceutical companies to delay the market entry of cheaper generic versions of Lundbeck’s branded citalopram. The generic companies had been preparing for market entry with much cheaper generic versions of citalopram, according to the EC. However, Lundbeck paid the generic competitors for their promise to stay out of the market and was therefore able to avoid generic competition.

The General Court fully upheld the EC’s decision, concluding that the Commission correctly found that the generic pharmaceutical competitors agreed with Lundbeck to stay out of the market in return for value transfers and other inducements, which constituted a "buying-off of competition." In addition, the General Court found that the EC properly established that the agreements eliminated the competitive pressure from the generic companies and were a "restriction of competition by object." Lastly, the EC properly determined that Lundbeck was not able to justify why the agreements would have been needed to protect its intellectual property rights, the General Court decided.

Companies: Lundbeck A/S; Merck KGaA; Generics UK Ltd.; Arrow Group ApS; Ranbaxy Laboratories Ltd.; Ranbaxy UK Ltd.

News: Antitrust