€16 million fines for J&J and Novartis
pharmafile | December 12, 2013 | News story | Medical Communications, Sales and Marketing | EU, J&J, JJ, Novartis, Sandoz, fentanyl, fines
The European Commission has slapped multi-million euro fines on Johnson & Johnson and Novartis for what it says were ‘shocking’ breaches of competition law.
J&J has been fined €10.7 million and Novartis €5.5 million for actions dating back to 2005, when the Dutch subsidiaries of the US and Swiss manufacturers “concluded an anticompetitive agreement to delay the market entry of a cheaper generic version of the painkiller fentanyl”.
“J&J paid Novartis to delay the entry of a generic painkiller,” explained EC vice president Joaquín Almunia, who is in charge of competition policy.
“The two companies shockingly deprived patients in the Netherlands, including people suffering from cancer, from access to a cheaper version of this medicine,” Almunia went on.
J&J developed fentanyl and has put it out in various forms since the 1960s but was about to lose patent protection on the fentanyl depot patch in the Netherlands in 2005 – with Novartis’ Dutch subsidiary Sandoz poised to launch a generic version.
But the EC says, in July 2005, Sandoz made a co-promotion agreement with J&J’s Dutch subsidiary Janssen-Cilag which “provided strong incentives for Sandoz not to enter the market”.
The case against the companies is that the monthly payments to Sandoz while there was no generic entry were greater than the profits Sandoz expected to make from selling the generic in the first place.
The agreement ran until December 2006 when a third company was about to launch its own fentanyl patch.
In other words, the EC suggests, the price of fentanyl in the Netherlands was kept ‘artificially high’ for 17 months “to the detriment of patients and taxpayers who finance the Dutch health system” – thus infringing Article 101 of the Treaty on the functioning of the EU.
Quoting internal documents from the companies, the EC said that Sandoz would not enter the Dutch market in exchange for ‘a part of [the] cake’.
Janssen-Cilag and Sandoz arranged things so as “not to have a depot generic on the market and in that way to keep the high current price”.
Almunia hoped the fines “should make pharmaceutical companies think twice before engaging into such anticompetitive practices, which harm both patients and taxpayers”.
The EC has been clamping down on such ‘pay for delay’ activities, although Lundbeck is fighting a recent ruling that could see it fined nearly €100 million over alleged generic blocking deals for its antidepressant Celexa (citalopram).
Adam Hill
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