EU to fine Servier, Teva for delaying generic drugs - sources

Thu Jun 19, 2014 8:34am EDT

* Total fine unlikely to exceed 300 million euros

* European Commission declines to comment

By Foo Yun Chee

BRUSSELS, June 19 (Reuters) - EU antitrust regulators are set to fine French drugmaker Servier, Israel's Teva and several of their peers next month for blocking cheaper generic medicine, two people with knowledge of the matter said on Thursday.

The sanctions will be the third action by the European Commission against so-called pay-for-delay deals in the pharmaceutical industry, where brand-name companies pay generics firms to refrain from putting rival medicines on the market.

A damning 2009 report by the European Union competition watchdog said such deals could jack up the cost of drugs by as much as 20 percent for consumers.

The regulators' decision, in a more than 900-page document, will likely be given to the companies next month, the sources said. They said the total fine was not likely to exceed 300 million euros ($407 million) and could be much less.

Companies found guilty of breaching EU antitrust rules can be fined up to 10 percent of their global turnover. Servier made 4.2 billion euros in sales last year.

Drugmakers say pay-for-delay deals stave off costly litigation battles.

Commission spokesman for competition policy Antoine Colombani and Teva declined to comment. The other companies involved were not immediately available.

The Commission in July 2012 charged Servier, France's second-largest drugmaker, with making illegal agreements with world No. 1 generic drugmaker Teva Pharmaceutical Industries, Unichem and its subsidiary Niche, as well as Matrix, which is now known as Mylan Laboratories, Krka and Lupin.

The watchdog said the deals could have maintained Servier's control of perindopril, a blood pressure medicine, which was set to lose its patent protection.

Denmark's Lundbeck, Germany's Merck KGaA and its former subsidiary Generics UK, which is now owned by Mylan, India's No. 1 pharmaceutical company Ranbaxy and several others were hit with a total fine of 146 million euros in June last year for pay-for-delay deals.

Six months later, Johnson & Johnson and Novartis were penalised 16.3 million euros for their anti-competitive agreements.

($1 = 0.7368 Euros) (Additional reporting by Tova Cohen in Jerusalem; Editing by Mark Potter)

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