Thursday, June 20, 2013

ANTI-TRUST RAP: Ranbaxy, 8 other cos fined 1,000 crore

EU Slaps Penalty On Drug Makers For Pacts To Delay Cheaper Antidepressant
Mumbai: EU antitrust regulators on Wednesday imposed fines totalling 146 million euros (Rs 1,150 crore) on nine global drugmakers, including Ranbaxy, for blocking the supply of cheaper versions of Danish company Lundbeck’s antidepressant drug citalopram. Ranbaxy, which needs to pay a penalty of 10.3 million euros (around Rs 80 crore), is expected to appeal against the EU decision.

Lundbeck has to pay damages of 94 million euros while the others fined include Alpharma (now part of Zoetis), Merck KGaA/Generics UK (Generics UK is now part of Mylan) and Arrow (now part of Actavis).

In 2002, Lundbeck had entered into agreements with each of these companies to delay the entry of cheaper generic versions of its blockbuster citalopram, the EC said. The punishments follow a 2009 report by the European Commission on the pharmaceutical sector, which said “pay-for-delay” deals lead to consumers paying as much as 20% more for their medicines.

“Agreements of this type directly harm patients and national health systems, which are already under tight budgetary constraints,” EU competition commissioner Joaquin Almunia said in a statement, adding, “The Commission will not tolerate such anticompetitive practices.”

The European Commission, which acts as competition regulator across the 27-member European Union, imposed a 21.4 million euro fine on Germany’s Merck KGaA, and another 7.77 million euros on it jointly with former subsidiary Generics UK.

Ranbaxy may appeal against the EU order. When contacted, a Ranbaxy spokesperson said “the company is disappointed with the decision by the European Commission to rule its patent settlement agreement with Lundbeck, covering the molecule Citalopram, anti-competitive, and intends to appeal the decision to the General Court of the European Union. These events took place over 10 years ago, and the company considers that the commission has misunderstood the facts, and misapplied the law. It believes it has strong grounds of appeal.”

In 2002, after Lundbeck’s basic patent for the citalopram molecule had expired, it only held a number of related process patents which provided a more limited protection. Producers of generic versions of citalopram therefore had the possibility to enter the market. But instead of competing, generic companies agreed with Lundbeck not to enter the market in return for substantial payments, and other inducements amounting to tens of millions of euros, the EC said.

The agreements gave Lundbeck the certainty that generics producers would stay out of the market for duration of the agreements, without giving the generic producers any guarantee of market entry thereafter.
TIMES NEWS NETWORK With inputs from agencies

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