European Commission calls out Teva over anti-competitive practice

The European Commission has  called out Teva over anti-competitive behaviour centring on a pay-for-delay drug deal.

In a statement released yesterday, July 17, the Commission said that it had informed Teva that its deal with competitor Cephalon was in breach of EU competition rules.

Under the agreement, Teva had agreed to not market a cheaper generic version of modafinil, Cephalon’s drug for sleep disorders.

Margrethe Vestager, commissioner in charge of competition policy, said: “Market entry and competition by generic drugs is an essential element to improve the affordability of healthcare.

“In this case, our preliminary finding is that Teva and Cephalon broke EU antitrust rules by agreeing on Cephalon paying Teva to keep its cheaper generic version of Cephalon's sleep disorder drug modafinil out of the market. It’s now up to the companies to respond to our concerns.”

Cephalon owned the patents for the drug and its manufacture, and after certain patents on the compound expired in the European Economic Area (EEA), Teva entered the UK market for a period of time with its generic.

Following Teva’s entry to the market, Cephalon sued Teva but the companies settled the litigation with a global agreement.

Under the settlement, Teva agreed not to sell its generic drug in the EEA until October 2012 and, in exchange, received a series of cash payments.

The Commission opened an investigation against the companies in April 2011.

It has now said: “The statement of objections alleges that the patent settlement agreement between Cephalon and Teva may have caused substantial harm to EU patients and health service budgets. This is because they may have delayed the entry of a cheaper generic medicine, leading to higher prices for modafinil.”

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