EU fines Ranbaxy, others for blocking cheap drugs
Says companies capitalising profit at the expense of patients New Delhi (Agencies): The European Union on Wednesday imposed fine of 146 million euros...
Says companies capitalising profit at the expense of patients
New Delhi (Agencies): The European Union on Wednesday imposed fine of 146 million euros on several drug producers including Ranbaxy and Lundbeck and others for delaying the market entry of cheaper generic alternatives to antidepressant, claiming that the companies sought to capitalise profit at the expense of patients. EU Antitrust Commissioner Joaquin Almunia said that Lundbeck alone was fined 93.8 million euros ($125.6 million) for anti-competitive behavior, charging it agreed with several companies to delay the entry of generic versions of its antidepressant citalopram. However, Lundbeck announced it would appeal the fine and insisted it did not unduly restrict competition.
Further according to information available on the European Commission (EC) website, Ranbaxy Laboratories has been fined euro 10.32 million (over `80 crore). In 2002, Lundbeck agreed with each of these companies to delay the market entry of cheaper generic versions of Lundbeck's branded citalopram, a blockbuster antidepressant, it added.
"These agreements violated EU antitrust rules that prohibit anticompetitive agreements (Article 101 of the Treaty on the Functioning of the European Union � TFEU)," EC said.
Joaqu�n Almunia further said: "It is unacceptable that a company pays off its competitors to stay out of its market and delay the entry of cheaper medicines. "Agreements of this type directly harm patients and national health systems, which are already under tight budgetary constraints,'' it added.
The generic companies which have been fined are Alpharma (now part of Zoetis), Merck KGaA/Generics UK (Generics UK is now part of Mylan), Arrow (now part of Actavis), and Ranbaxy.
Reacting to the fine, Ranbaxy Laboratories said: "Ranbaxy 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 ten years ago, and the company considers that the Commission has misunderstood the facts and misapplied the law, it said, adding it believed it has strong grounds of appeal. Citalopram is a blockbuster antidepressant medicine and was Lundbeck's best-selling product at the time. EC said 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 cheaper, generic versions of citalopram therefore had the possibility to enter the market.
"But instead of competing, the generic producers agreed with Lundbeck in 2002 not to enter the market in return for substantial payments and other inducements from Lundbeck amounting to tens of millions of euros," EC said.
It further said Lundbeck paid significant lump sums, purchased generics' stock for the sole purpose of destroying it, and offered guaranteed profits in a distribution pact. "The agreements gave Lundbeck the certainty that the generics producers would stay out of the market for the duration of the agreements without giving the generic producers any guarantee of market entry thereafter," the EC statement said.
These agreements are very different from other settlements of patent disputes where generic companies are not simply paid off to stay out of the market, it added. For Ranbaxy the fine by the EC comes close on the heels of its agreement with US authorities last month under which it had agreed to pay a fine of $500 million after pleading guilty to 'felony charges' over violation of approved manufacturing norms at its two facilities in India.