* EU Commission to send statement of objections this week
* Companies could face fines up to 10 pct of sales
* Cases concern pay-for-delay deals
By Foo Yun Chee
BRUSSELS, July 24 EU antitrust regulators are to
charge French drugmaker Servier and Danish peer Lundbeck
in two separate cases this week related to blocking the
entry of cheaper generic medicines into the market, three people
familiar with the cases said.
The move, the first by the European Commission against
"pay-for-delay" deals between brand-name companies and their
generic competitors since a high-profile inquiry into the sector
in 2009, could lead to hefty fines.
The EU regulators are likely to send statements of
objections stating their concerns to Servier and Lundbeck in
their respective cases in coming days, the people said on
Lundbeck said it had not prevented generic drugs from
entering the market and was confident it was meeting EU rules.
"We are clear on this case that we are living up to EU
regulations, " L undbeck's spokesman Anders Schroll said, adding
that the firm had not received any notification from the
European Commission about any further steps against it.
The Commission, which acts as competition regulator across
the European Union, began an investigation into Servier in July
2009, concerned that deals with several generic drug companies
may have blocked the entry of cardiovascular medicine
perindopril into the EU market.
It also opened a separate investigation into Lundbeck in
January 2010, on suspicion that the Danish company might have
done the same with its anti-depressant drug citalopram.
Companies found guilty of breaching EU rules can be fined up
to 10 percent of their global turnover.
That would amount to 390 million euros for Servier based on
its 2010/2011 turnover and 16 billion Danish crowns for
Lundbeck, based on its reported revenues last year. Regulators
however rarely levy the maximum penalty in such cases.
AstraZeneca was fined 60 million euros in 2005 for
misleading patent regulators between 1993 to 2000 in a bid to
block competition to its ulcer drug Losec. An EU court trimmed
the penalty to 52.5 million after the company challenged the
Worldwide sales of branded patent-protected medicines are
expected to reach between $615 billion and $645 billion by 2016,
according to healthcare information provider IMS Health.
It estimates generic sales at between $400 billion and $430
Cases involving world No. 1 generics producer Teva
, Johnson & Johnson and Novartis on
suspected pay-for-delay deals are still ongoing.
The investigations were triggered by an EU regulatory
inquiry into the pharmaceuticals sector in 2008 and 2009 which
found that delays in bringing generic medicines to the market
were costing European consumers billions of euros.
U.S. antitrust regulators are also examining pay-for-delay
settlement deals and other tactics used to delay generics.