EC Investigates Lundbeck for Potential Pay-to-Delay Agreements

Jul 27, 2012

The European Commission has issued a statement of objections against Lundbeck and several other pharmaceutical companies with the preliminary view that Lundbeck formed agreements with generic-drug companies to prevent the market entry of cheaper versions of its antidepressant, citalopram. Lundbeck has vigorously rejected the accusation as groundless.

According to a statement from the EC, the market entry of generic citalopram may have been delayed for up to two years. After patents on citalopram expired, Lundbeck entered into agreements with several generic-drug companies, which involved “substantial value transfers” from Lundbeck to generic competitors, who subsequently chose not to market any generic versions of citalopram. “The value transfers included direct payments from Lundbeck to the generic competitors and also occurred in other forms, such as the purchase of generic citalopram stock for destruction or guaranteed profits in a distribution agreement,” said the EC statement.

Other companies named in the Statement of Objections include Merck KGaA, Generics UK, Arrow, Resolution Chemicals, Xellia Pharmaceuticals, Alpharma, A.L. Industrier and Ranbaxy.

The sending of the Statement of Objections does not prejudge the final outcome of the investigation.

The investigation against Lundbeck is part the EC’s focus on anticompetitive practices in the European pharmaceutical industry after an inquiry concluded in 2009 indicated several structural issues and problems with company practices that could be delaying the market entry of generic drugs. The EC opened formal proceedings against Lundbeck in 2010, but is also investigating other companies including Les Laboratoires Servier, Cephalon, Teva, Johnson & Johnson, Novartis and Novartis’ generic branch Sandoz for possible violations of EU competition rules.

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