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Lupin Appeals Fine Imposed by European Commission in “Pay-For-Delay” Crackdown

In July of this year, the European Commission imposed fines on French pharmaceutical company Servier and five generic drug makers, including Lupin Ltd., totaling €427.7 million. The fines were the result of a five-year investigation into alleged anticompetitive agreements that prevented generic versions of perindopril, Servier’s best-selling blood pressure medication, from entering the market.

We have been monitoring the development of “pay-for-delay” cases in the United States (see herehere, and here) following the Supreme Court’s decision in FTC v. Actavis, Inc., 133 S. Ct. 2223 (2013)—in which the Court held that reverse payment settlements resulting from patent litigation can sometimes violate antitrust laws—and developments in Europe as well. Just two days after the Supreme Court delivered its 2013 ruling in Actavis, the Commission issued its first decision dealing with pay-for-delay agreements and fined Danish pharmaceutical company Lundbeck and several generic producers €146 million for payments made to keep competitors from introducing a generic version of Lundbeck’s antidepressant citalopram. Then in December 2013, the Commission fined Johnson & Johnson and Novartis €16.3 million for agreeing to delay introduction of a generic version of Johnson & Johnson’s painkiller fentanyl in the Netherlands.

Lupin recently appealed the Commission’s fine in the perindopril proceeding, arguing that the Commission applied “a wholly novel and incorrect legal test.” Lupin further argued that the Commission failed to recognize the objectives of competition and patent law when it rendered its decision. Although several other companies have appealed their fines to the European Union’s General Court, the General Court has not yet issued any decisions on these recent pay-for-delay fines.

To date, pharmaceutical companies are facing liability for pay-for-delay deals in Europe but not yet in post-Actavis proceedings in the U.S. A decision by the EU’s General Court on any of the cases before it will indicate whether there will be a divide in the application of competition law in Europe and its application in the U.S.