Lundbeck appealing against European fine
pharmafile | September 2, 2013 | News story | Sales and Marketing | EMA, Lundbeck, pay for delay
Lundbeck is fighting a ruling by European authorities that could see it fined nearly €100 million over a pay-for-delay deal.
The company is being told to pay €93.8 million over alleged generic blocking deals for its antidepressant Celexa (citalopram) by the European Commission.
The drug was once a big seller for the firm but lost its patent in 2002. The European Commission, which regulates competition in the EU, has found that Lundbeck paid a number of generic firms and their subsidiaries to delay the launch of copycat versions of the drug.
Lundbeck has now come out saying today that it “strongly disagrees with the Commission’s decision”, which was made in June, and considers that it contains several ‘serious legal and factual errors’. The investigation into the firm has been ongoing since 2005.
Mette Carlstedt, senior VP of corporate legal at Lundbeck, said: “We remain appalled over the decision, which errs in a number of highly important aspects. Through our appeal we aim to have a thorough legal assessment of the case that sets legal precedent which is of the highest importance to us and all other innovative companies.”
The firm says that errors in the Commission’s decision include misinterpreting the main criterion to determine whether an agreement restricts potential competition, as established in case law and ignores key facts of the case.
The decision also contains manifest errors regarding its assessment of value transfers in the context of patent settlement agreements, according to Lundbeck.
The company also believes that the decision infringes Lundbeck’s rights of defence, because the: “Commission has changed the constituent elements of the alleged infringement between the Statement of Objections and the decision, without affording Lundbeck an opportunity of being heard on that change before the decision was taken”.
Lundbeck expects a decision on the appeal within two to three years. A judgment could be appealed to the European Court of Justice, either by Lundbeck or the Commission, and it could be up to six years before a final ruling in the case is reached.
Regardless of its appeal, however, Lundbeck is still obligated to pay the fine and will do so during the third quarter of this year.
But the Danish firm has not been handed the harshest penalty, as the Commission can officially fine a company up to 10% of its global revenue for breaching antitrust laws, which in this case would have been €240 million.
These types of payments are known as pay-for-delay deals, where pharma firms developing branded drugs make payments to a generic company in return for that firm agreeing to delay its entry into the market.
Both the Federal Trade Commission in the US and now the European Commission are beginning to take a tougher stance on these deals, which can cost governments billions every year as cheaper medicines are being blocked from use.
Ben Adams
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