European Commission Investigates Pay-to-Delay Deals

Aug 31, 2012


Stephanie Sutton
Following an inquiry in 2009 that suggested the launch of various generic drugs was being delayed by anticompetitive business practices, the European Commission (EC) has been closely monitoring deals for potential breaches of the EU's antitrust rules. Recently the EC issued a Statement of Objections (a formal step in investigations into suspected violations of antitrust rules) for two further separate cases.

The first statement was sent to Lundbeck and several generic-drug companies with the preliminary view that agreements were formed to prevent the market entry of cheaper versions of Lundbeck's antidepressant, citalopram. After patents on citalopram expired, the EC says that Lundbeck entered into agreements that involved "substantial value transfers" from Lundbeck to its generic-drug 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 an EC statement, released on 25 July.

The second being scrutinised by the EC is Servier. The EC believes that Servier's agreements with several companies, coupled with acquisitions of key competing technologies, were aimed at preventing the market entry of generic versions of its cardiovascular medicine perindopril. Servier has been under close watch by the EC for potential anticompetitive practices since 2009.

Despite these latest high-profile cases, the EC has reported a decrease in pay-to-delay deals. Results from the EC's patent monitoring activities show that the number of "potentially problematic" settlements stabilised in 2011 at 11% compared with the 21% noted during the sector inquiry, which examined the period 2008–2009.

Stephanie Sutton is community manger of PharmTech Europe.