Drugmakers Hit With Nearly $600 Million in EU Fines Over Pay-for-Delay Scheme

July 15, 2014

French drugmaker Servier and five generics firms are facing roughly $580 million in fines from European antitrust regulators over an alleged pay-for-delay scheme.

According to the European Commission, Servier used technology acquisitions and patent settlements with the other manufacturers to keep generic versions of its blockbuster cardiovascular drug Coveram (perindopril) off the market in what amounted to payoffs that violated European antitrust law.

Regulators first announced an investigation into the patent settlements last December. Along with Servier, the case involves Teva, Mylan subsidiary Matrix Laboratories, Niche/Unichem, Krka and Lupin. Each faces tens of millions in fines.

Reached for comment, both Mylan and Lupin denied the allegations and vowed to appeal. Mylan noted that its subsidiary’s alleged deal occurred in 2005, about two years before it acquired Matrix.

European regulators minced no words in their accusations, arguing that Servier paid the generics companies tens of millions to keep their products off the market.

Servier managed to maintain market exclusivity over the product until about 2007, four years after the drug’s main patent expired in 2003, according to the Commission. To do so, regulators say Servier acquired additional technology patents to make it harder for generics makers to pursue their own versions. When competitors did propose their own version, Servier sued and later settled with payouts in exchange for a market delay.

The Commission emphasized that the case was not an isolated incident, but rather the latest in a concerted effort to scrutinize patent settlements that may be anticompetitive. The overall frequency of such deals has declined, the Commission said. — Bryan Koenig

Originally appeared in Drug Industry Daily, the pharmaceutical industry’s number one source for regulatory news and information. Click here for more information.