J&J Fined $14.9 Mln by EU for Novartis Drug-Delay Pact

Johnson & Johnson was fined 10.8 million euros ($14.9 million) by European Union regulators over an accord with a Novartis AG unit that hampered the sale of generic versions of pain killer fentanyl in the Netherlands.

Novartis must pay 5.49 million euros, the European Commission said in an e-mailed statement today. The pact delayed the entry of a cheaper generic medicine for 17 months and kept prices for fentanyl in the Netherlands artificially high, according to the statement.

“The two companies shockingly deprived patients in the Netherlands, including people suffering from cancer, from access to a cheaper version of this medicine,” said Joaquin Almunia, the EU’s antitrust chief. “Today’s decision should make pharmaceutical companies think twice before engaging into such anticompetitive practices, which harm both patients and taxpayers.”

Antitrust regulators on both sides of the Atlantic are focusing on how settlements between companies that make branded medicines and generics producers might harm consumers. H. Lundbeck A/S, the Nordic region’s second-largest drugmaker, was fined in June in a probe over delays for generic drugs and Les Laboratoires Servier was sent a statement of objections over so-called pay-to-delay contracts last year.

‘Problematic’ Settlements

Only 7 percent of pharmaceutical companies’ 2012 settlements, including so-called pay-to-delay deals, were “problematic” for European Union antitrust regulators, Almunia said earlier this week.

For the duration of the fentanyl pact, Dutch patients had to pay prices “probably more than 30 percent higher” for the pain killer, Almunia said today in a recorded speech.

Novartis, based in Basel, Switzerland, and Sandoz, its generic-drug unit, “reject the commission’s allegation that the 2005 co-promotion agreement was intended to deprive patients in the Netherlands of cheaper medicines,” according to an e-mailed statement. “We look forward to putting this historical matter behind us.”

Johnson & Johnson didn’t immediately react to a call and an e-mail seeking comment.

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