By Foo Yun Chee
BRUSSELS Dec 10 European Union regulators have
fined drugmakers Johnson & Johnson and Novartis
16.3 million euros ($22 million) for blocking the sale
of a cheaper generic rival to their painkiller fentanyl.
The EU warned others against such anti-competitive deals.
This is the second penalty imposed by the European
Commission over so-called pay-for-delay deals where brand-name
companies pay generic rivals not to sell their versions of a
drug at a fraction of the original price.
The practice, common in the pharmaceutical industry, has
caught the attention of regulators around the world because it
raises consumer bills and public healthcare costs.
The EU competition watchdog said on Tuesday that the deal
between Johnson & Johnson and Novartis meant cancer patients did
not have access to the cheaper generic version of fentanyl for
17 months from July 2005.
Johnson & Johnson and its Dutch unit, Janssen-Cilag, were
fined 10.8 million euros while Novartis and Dutch subsidiary
Sandoz were fined 5.5 million euros. The agreement ended after
another drugmaker unveiled plans to sell its own version.
Sources familiar with the matter told Reuters last month
that the fines were planned.
"Today's decision should make pharmaceutical companies think
twice before engaging in such anti-competitive practices, which
harm both patients and taxpayers," EU Competition Commissioner
Joaquin Almunia said.
Novartis and Sandoz disputed the regulator's finding.
"(We) reject the Commission's allegation that the 2005
co-promotion agreement was intended to deprive patients in the
Netherlands of cheaper medicines. We look forward to putting
this historical matter behind us," they said in a statement.
The Commission fined Denmark's Lundbeck and eight
others in June in its first pay-for-delay case and has two
others in the pipeline involving Israel's Teva and its
subsidiary Cephalon, and French drugmaker Servier.
Proponents of such agreements said they help companies avoid
costly and lengthy litigation.