EU Fines Drugmakers €16 million for Painkiller Delay

The European Commission has fined U.S. pharmaceutical producer Johnson & Johnson (J&J) €10.8 million and Swiss drugmaker Novartis of Switzerland € 5.5 million for actions taken by the two companies' Dutch subsidiaries to delay market cheaper generic version of the painkiller fentanyl in the Netherlands in 2005.

Commission vice president Joaquín Almunia, who oversees EU competition policy, said J&J paid Novartis to delay the generic drug - a painkiller 100 times more potent than morphine - thus depriving cancer patients from access to a cheaper version.

Alumina noted that the U.S. drugmaker's patent production on the fentanyl depot patch had expired in the Netherlands, and Novartis' Sandoz arm was preparing to launch its generic fentanyl depot patch there. Rather than sell the generic version, Almunia said Sandoz instead signed a co-promotion agreement with J&J's Dutch subsidiary Janssen-Cilag, providing for monthly payments exceeding the profits it could expect from the generic product.

In December 2006, when a third party was about to launch a generic version, the Commission said the "anticompetitive agreement, which infringed Article 101 of the Treaty on the functioning of the European Union (TFEU),"was canceled.

The decision should make pharmaceutical companies think twice before engaging into such anticompetitive practices that harm both patients and taxpayers, Alumnia said, adding that the EU is "actively investigating 'pay-for-delay' agreements that limit generic entry in return for a value transfer by the originator company to the generic company."

In June of this year, the Commission adopted a proposal for a directive that it said would make it easier for victims of anticompetitive practices to obtain damages.