European Commission To Fine Pharma Firms for Anticompetitive Practices

The European Commission will fine nine drug companies from around the world later this month, penalizing them for obstructing the free flow of generic drugs into the marketplace.

Danish firm Lundbeck will face the highest fines, which could run up to 240 million euros ($314 million), or 10 percent of the company’s global revenue, Reuters reports.

The potential fines, which the European Commission did not confirm to Reuters, come after a 2009 EU inquiry into anticompetitive practices in the pharmaceutical industry.

The European Commission also launched an antitrust investigation into Lundbeck specifically in 2009, according to Law360.com. That focused on whether Lundbeck blocked other firms from selling a generic version of Lundbeck’s antidepressant drug citalopram.

The exact size of the fines were not made clear, but one unnamed official told Reuters, “The fine for Lundbeck is expected to be significant, less so for the others.”

Other companies facing likely fines include Merck KGaA in Germany, Generics UK and a top Indian pharmaceutical company, Ranbaxy. Asked by Reuters, Lundbeck denied any wrongdoing and said it was unaware of any imminent fines.

European regulators have estimated that consumers sometimes pay up to 20 percent more for medicine as a result of delaying tactics by drug companies and generic manufacturers. Drug companies allegedly pay generic manufacturers to delay release of their cheaper generic products, sometimes by threatening lawsuits.

The 2009 European Commission inquiry concluded that entry of generic drugs into the medical marketplace is unduly delayed and suggested improper business practices could be one key cause.

“Originator companies use a variety of instruments to extend the commercial life of their products without generic entry for as long as possible,” an announcement accompanying the report read.

“Defensive patenting strategies that mainly focus on excluding competitors without pursuing innovative efforts will remain under scrutiny,” the commission pledged in 2009.