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French Drugmaker Servier Loses Appeal Against EU Fine for “Pay-for-Delay” Deals

 |  June 30, 2024

In a decisive ruling, the Luxembourg-based Court of Justice of the European Union on Thursday upheld a significant fine against French pharmaceutical company Servier for its anti-competitive “pay-for-delay” deals aimed at postponing the sale of generic versions of its blood pressure medication, perindopril.

Servier’s legal struggle began in 2014 when the European Commission imposed a €331 million ($354 million) fine on the company, reported Reuters. This fine also extended to several generic drug manufacturers involved in the deals, including Teva Unichem and its subsidiary Niche, Matrix (now Mylan Laboratories), Krka, and Lupin. These agreements, which took place between 2005 and 2007, were designed to delay the introduction of cheaper generic drugs to the market.

Antitrust regulators, both in the European Union and the United States, have long targeted such “pay-for-delay” arrangements, where brand-name pharmaceutical companies compensate generic drugmakers to delay the release of lower-cost alternatives. These deals are seen as detrimental to competition and costly to consumers and healthcare systems.

Related: EU Regulators Accuse Indian Drugmaker Alchem of Price-Fixing Cartel

In 2018, a lower tribunal reduced Servier’s fine to €228 million, acknowledging certain errors in the European Commission’s initial analysis. However, both Servier and the EU competition watchdog subsequently appealed the decision.

In its latest ruling, the Court of Justice of the European Union sided with the Commission, maintaining the fines against Servier and the generic manufacturers involved. The court confirmed that the agreements made by Servier and its co-conspirators were intended to exclude market competition and restrict the entry of generics, which is in violation of EU antitrust laws.

“The Court dismisses the appeals of Lupin, Niche Generics, Unichem Laboratories, Matrix, Teva, and Biogaran. It thereby confirms the judgments of the General Court that held that the agreements concluded by Servier and Biogaran constituted market-exclusion agreements and restricted competition,” the judges stated.

In response to the ruling, the European Commission reiterated its stance that Servier’s actions were aimed at protecting its lucrative perindopril market from generic competition within the EU. The pharmaceutical industry, however, has defended pay-for-delay agreements as a means to avoid protracted and expensive litigation.

Source: Reuters