Recently, French drugmaker Servier faced a major setback in its legal battle against the European Union for deals made with rivals to delay the sales of generic versions of its popular blood pressure medicine perindopril. The European Commission imposed a hefty fine amounting to 331 million euros on Servier back in 2014, along with fines on several generic drug manufacturers such as Teva, Unichem, Matrix (now known as Mylan), Krka, and Lupin. These fines were the result of what antitrust regulators refer to as “pay-for-delay” deals that occurred between 2005 and 2007.
Antitrust regulators on both sides of the Atlantic have been actively targeting these types of agreements, where brand name pharmaceutical companies pay their generic rivals to delay the release of more affordable versions of their drugs. The ultimate goal of these regulators is to promote fair competition in the market and ensure that consumers have access to cheaper alternatives.
Despite Servier’s efforts to challenge the EU’s decision in court and having the fine reduced to 228 million euros in 2018 due to alleged errors in the regulators’ analysis, the Court of Justice of the European Union ultimately upheld the Commission’s decision. The court ruled that the agreements entered into by Servier and other companies constituted as market-exclusion agreements that hindered competition. As a result, the fines imposed by the Commission were deemed valid.
While the pharma industry argues that pay-for-delay deals are necessary to avoid prolonged and costly litigation processes, regulators maintain that these agreements are detrimental to fair competition and consumer welfare. The fine imposed on Servier and other companies serves as a warning to pharmaceutical companies engaging in anti-competitive practices.
The legal battle between Servier and the European Commission sheds light on the ongoing efforts to combat “pay-for-delay” deals in the pharmaceutical industry. With antitrust regulators cracking down on such agreements, the focus remains on promoting fair competition and ensuring access to affordable medication for all.