The European Commission welcomes today's judgments by the General Court fully upholding its Lundbeck decision (cases T-472/13, T-460/13, T-467/13, T-469/13, T-470/13, T-471/13). The Commission's decision found that the Danish pharmaceutical company Lundbeck and four generics competitors had concluded agreements that harmed patients and health care systems. This allowed Lundbeck to keep the price of its blockbuster drug citalopram artificially high, in breach of Article 101 of the Treaty on the Functioning of the European Union. The decision imposed a fine of €93.8 million on Lundbeck and fines totalling €52.2 million on the four generics competitors, Generics UK, Arrow, Alpharma and Ranbaxy.
Before the agreements were concluded, Lundbeck's basic patent for the blockbuster antidepressant medicine citalopram had expired. Lundbeck still held a number of process patents that provided limited protection. Generics producers were preparing for market entry with much cheaper generic versions of citalopram. Lundbeck paid the generics competitors for their promise to stay out of the citalopram market. As a result, Lundbeck was certain to avoid competition from the four companies for the entire duration of the agreements.
Lundbeck and the generics companies appealed the decision to the General Court.
The General Court has today fully confirmed the Commission's findings. It is the first time that it has ruled on pay-for-delay agreements in the pharmaceutical sector. In particular, it found that:
- The Commission was correct in finding that, irrespective of any patent dispute, generics 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";
- The Commission had correctly established that the agreements eliminated the competitive pressure from the generic companies and are "a restriction of competition by object". Furthermore, Lundbeck was not able to justify why these particular agreements would have been needed to protect its intellectual property rights.
Background to today's judgment
The Commission's competition inquiry into the pharmaceutical sector indicated a number of structural issues and problems in companies' practices that could unduly delay the entry of cheaper medicines into the EU market. It also emphasised the importance of stronger competition law enforcement (see IP/09/1098, MEMO/09/321 and MEMO/13/56).
After the Lundbeck case, in 2013 and 2014, the Commission fined companies in two other pay-for-delay investigations – one concerning fentanyl, a pain-killer (see IP/13/1233), and the other concerning perindopril, a cardiovascular medicine (Servier Decision see IP/14/799). The Fentanyl Decision was not appealed. Several appeals against the Servier Decision are pending before the General Court.
In addition, since 2009, the Commission has been continuously monitoring patent settlements in order to identify settlements which could be potentially problematic from an antitrust perspective - namely those that limit generic entry against a value transfer from an originator to a generic company. The latest report was published in December 2015 (6th Report).