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EU fines drugmakers for blocking generic

Tuesday, December 10 14:59:00

European Union regulators fined drugmakers Johnson & Johnson and Novartis 16.3 million euros ($22 million) for blocking the sale of a cheaper generic painkiller and warned others against such anti-competitive deals.

This is the second penalty by the European Commission against so-called pay-for-delay deals where brand-name companies pay generic rivals not to sell their versions of a drug at a fraction of the original price.

The practice, common in the pharmaceutical industry, has caught the attention of regulators around the world because it raises consumers' bills and public healthcare costs.

The EU competition watchdog said on Tuesday that the deal between Johnson & Johnson and Novartis meant cancer patients did not have access to the cheaper generic version of fentanyl for 17 months starting from July 2005.

Johnson & Johnson and its Dutch unit, Janssen-Cilag, were fined 10.8 million euros while Novartis and its Dutch subsidiary, Sandoz, were fined 5.5 million euros.

Sources told Reuters last month that the fines were planned.

"Today's decision should make pharmaceutical companies think twice before engaging into such anti-competitive practices, which harm both patients and taxpayers," EU Competition Commissioner Joaquin Almunia said.

The Commission fined Denmark's Lundbeck and eight others in June in its first pay-for-delay case and has two others in the pipeline involving Israel's Teva and its subsidiary Cephalon, and French drugmaker Servier.