Lundbeck loses €150m pay-for-delay appeal
Lundbeck has lost an appeal to the Court of Justice of the European Union (CJEU) to waive €150 million ($176 million) in fines levied against itself and a group of five generics manufacturers over ‘pay-for-delay’ deals for its antidepressant generics.
On March 25 the CJEU upheld a 2016 decision from the general court which ruled that Lundbeck and the had agreed with the manufacturers to delay the market entry of generic citalopram in return for “substantial payments” by Lundbeck.
The companies had sought to set aside the judgments of the general court and have a prior decision from the EU Commission annulled. The CJEU dismissed all appeals.
Determining competitiveness
The CJEU found that the general court did not err in upholding that Lundbeck and the generic manufacturers were potential competitors.
The court noted the existence of a patent that protects the manufacturing process of an active ingredient (citalopram) that is not in the public domain cannot be regarded as an “insurmountable barrier” to market.
Additionally, it also found that the general court did not err in concluding that the deals between the parties constituted restrictions of competition “by object”.
The court explained: “In order to be able to characterise a given agreement as a ‘restriction by object’, only the specific characteristics of that agreement are significant, from which it is necessary to infer any harmfulness for competition, where necessary following a detailed analysis of that agreement, its objectives and the economic and legal context of which it forms part.”
Finally, the CJEU found that the general court did not err in imposing upon two of the generics manufacturers, Xellia Pharmaceuticals and Alpharma, an obligation of diligence that is not applicable to case law.
‘Anti-competitive’ agreements
Lundbeck patented its antidepressant medicine containing citalopram in the late 1970s. Once its compound patent expired, it continued to hold onto several secondary patents offering limited protection.
In 2002, Lundbeck entered into agreements to allow the production and sale of generics with several companies, but in return, asked for a commitment by the companies to not enter the citalopram market.
As part of the deal, Lundbeck provided the generics manufacturers “substantial payments” and purchased stock of their generic products.
The European Commission began an investigation into the agreements in January 2008. By June 2013, it ruled that Lundbeck and the generics manufacturers were “at least potential competitors”, therefore classing the agreements and restrictions as anti-competitive.
A total fine of €93.7 million was imposed on Lundbeck and a fine of €52.2 imposed upon the generics manufacturers that entered into the agreement.
The generics manufacturers appealed to have the decision of the commission dismissed by the general court of the European Union. The appeals were dismissed on September 8, 2016, leading the manufacturers to bring appeals before the CJEU, where they were again dismissed.
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