AZ fined E60 million by European Commission
pharmafile | June 16, 2005 | News story | Sales and Marketing |
AstraZeneca has been fined E60 million by the European Commission for illegally trying to extend the patent on its ulcer drug Losec.
The company was found guilty of abusing its dominant market position by using the patent and regulatory systems to block generic versions of the drug from coming to the market.
AstraZeneca, however, said it did not accept the ruling and will appeal against the Commission’s decision.
In its ruling, the Commission said the company’s actions represented serious abuses of its dominant market position and a violation of European competition rules.
Competition commissioner Neelie Kroes said: “By preventing generic competition AstraZeneca kept Losec prices artificially high. Moreover, competition from generic products after a patent has expired encourages innovation in pharmaceuticals.”
The Commission said AstraZeneca abused several national patent systems, which resulted in Losec gaining extended patent protection through supplementary protections certificates (SPCs).
This misleading conduct, the commission judged, amounted to an abuse in the UK, Germany, and four other European countries.
The Brussels regulator also ruled against AstraZeneca’s switch from offering Losec as capsules to a tablet formulation, while asking patent offices to deregister market authorisation for the capsule version.
This blocked competition from parallel traders and generic competitors in three markets, Denmark, Sweden and Norway, the Commission ruled.
But AstraZeneca, responding to the decision, maintained that it acted in good faith and did not make misleading representations to Patent Offices to gain SPCs.
Sir Tom McKillop, AstraZeneca’s chief executive, said: “AstraZeneca has not made misrepresentations or behaved inappropriately. We believe that a proper evaluation on appeal of all the facts and legal positions will confirm that the Commission’s analysis is fundamentally flawed.”
The decision, which follows a six-year probe into AstraZeneca, will come as a blow to the UK company which is still recovering from a series of disappointments, most notably the FDA’s rejection of its blood-thinning drug Exanta and ongoing concerns over the safety of its cholesterol-lowering drug Crestor.
But the E60 million fine could have been substantially worse for AstraZeneca as its violation could have triggered a fine of up to 10% of its global annual turnover, around E214 million.
In 2001, the Commission issued record E855.2 million fines against Roche and seven other companies that were found to have colluded on price fixing of vitamins.
