French drugmaker Servier challenges 331 million euro EU antitrust fine

LUXEMBOURG (Reuters) - French drugmaker Servier urged an EU court on Tuesday to slash a 331 million euro (£288.5 million) antitrust fine, saying regulators had committed multiple errors when they ruled against the company’s pay-for-delay deals with generic rivals three years ago.

Such deals, a typical business practice in the industry, are frowned upon by competition authorities on both sides of the Atlantic, who say they block the entry of cheaper generic medicines into the market as governments grapple with rising healthcare costs.

The case against Servier and five other drugmakers related to the French company’s cardiovascular medicine perindopril.

Servier's appeal against the fine imposed by the European Commission in 2014 comes as the EU competition enforcer recently opened another front against the sector, this time an investigation into South Africa's Aspen Pharmacare APNJ.J for allegedly charging excessive prices for five key cancer drugs.

The case relating to perindopril was triggered by a regulatory inquiry into the sector in 2008 and 2009, which found that pay-for-delay deals were costing European consumers billions of euros.

“The Commission’s investigation was skewed from the beginning,” Servier lawyer Olivier de Juvigny told a panel of five judges at the General Court, Europe’s second highest court, on the first day of a four-day hearing.

He said public statements made by two previous competition commissioners on the case even before a decision was issued showed bias against the company, on top of legal and procedural mistakes.

Commission lawyer Bernard Mongin denied prejudice against the company.

“The investigation was carried out in a neutral manner,” he said, adding that it was clear that Servier wanted to block rivals’ cheaper medicines.

“Servier was faced with the risk of entry of generics and it set about neutralising these risks,” he said.

Lobbying group the European Federation of Pharmaceutical Industries and Associations (EFPIA) backed Servier, saying that the Commission should not punish legitimate settlement deals on patents simply because they include the transfer of money.

Danish peer Lundbeck LUN.CO tried but failed to convince the EU Court of Justice (ECJ), Europe's top court, last year that its deals with five smaller rivals to delay cheaper generic copies of its blockbuster citalopram anti-depressant from entering the market were not anti-competitive.

The case is T-691/14 Servier SAS and others v Commission.

Reporting by Foo Yun Chee; Editing by Susan Fenton