H. Lundbeck A/S (LUN), the Nordic region’s second-largest drugmaker, was sent a complaint by European Union antitrust regulators over agreements with rivals that may have held back sales of cheaper generic drugs.
Pfizer Inc.’s Alpharma unit, Merck’s German subsidiary, Ranbaxy Laboratories Ltd. (RBXY) and other generic drugmakers were also sent EU complaints for agreeing to pay-to-delay deals with Lundbeck that may have delayed generic versions of its antidepressant citalopram, marketed as Celexa, for as long as two years, the European Commission said in a statement today. Les Laboratoires Servier will soon get a similar EU antitrust complaint over a separate probe, the EU’s antitrust chief said.
“There are significant competition issues in the pharmaceutical industry, in particular certain business practices delay the market entry of cheaper medicines,” said EU Competition Commissioner Joaquin Almunia at a press conference today. “Private companies can’t be allowed to free ride our welfare states and health insurance systems.”
The Lundbeck investigation is the EU’s first case over pay-for-delay settlements, regulators said. The Brussels-based antitrust agency has sought information from companies including GlaxoSmithKline Plc over patent settlement agreements to check if any there is harm to competition. Potentially problematic agreements made up 11 percent of 120 agreements reviewed by the EU last year, the commission said in a report today.
“Lundbeck vigorously opposes any allegation of wrongdoing and does not believe its practice has violated European competition law,” the Copenhagen-based company said in a statement. “It is confident that all allegations made by the commission should be rejected as groundless.”
Lundbeck shares fell 2.9 percent to 118.80 Danish kroner in Copenhagen.
Almunia plans to send a statement of objections to Servier “in a few days,” he said in Brussels today. Regulators are investigating Servier’s agreements with generic rivals to hinder the sales of cheaper versions of its cardiovascular drug perindopril.
Servier hasn’t yet received the EU complaint, the French company said in an e-mailed statement today. The drugmaker said it “has always cooperated” with the commission and plans to respond to the EU’s concerns “point by point as it’s convinced it breached no competition rules.”
Xellia Pharmaceuticals, Resolution Chemicals, AL Industrier ASA, Watson Pharmaceutical Inc.’s Arrow unit and Generics UK, now known as Mylan Inc., were also sent statements of objections over Lundbeck’s agreements with competitors who subsequently held back sales of generic versions of citalopram, the commission said.
Lundbeck’s deals included direct payments to generic competitors, guaranteed profits in a distribution agreements and the purchase of generic versions of citalopram to be destroyed, the EU said.
Andrew Ridger, a spokesman for New York-based Pfizer, said the company received a complaint relating to a business its Alpharma unit sold before it was bought by Pfizer’s King Pharmaceuticals subsidiary.
The complaint against Merck KGaA (MRK) related to an agreement made in 2002 by its former British subsidiary, Generics UK, Phyllis Carter, a spokeswoman for the company, said by telephone. Merck sold its generics business in May 2007 to Mylan for $6.7 billion. The company will analyze the statement and consider its next steps, she said.
Jen Lewis, a spokeswoman for Xellia in Congleton, England, said the EU probe related to a 2002 agreement between Lundbeck and Alpharma. Xellia was spun out from Alpharma in 2008 and it doesn’t manufacture or supply citalopram or other antidepressants, she said.
Watson, which owns Arrow, has received the complaint and is currently reviewing it, said Charlie Mayr, a spokesman for the Parsippany, New Jersey-based company.
Ranbaxy spokesman Krishnan Ramalingam had no immediate comment. Calls and an e-mail to Resolution Chemicals weren’t immediately answered. Calls to Mylan’s U.S. press office and to AL Industrier weren’t immediately returned.
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