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Mar 19, 2013 - Mar 21, 2013, Barcelona, Spain

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EU Regulators Charge J&J and Novartis over Pay-to-Delay Agreement

Johnson & Johnson and Novartis have been charged with delaying the introduction of a generic version of fentanyl into the Netherlands market – the latest in a spate of ‘pay-to-delay’ deals uncovered by the European Commission.



The Commission alleges that the J&J unit Janssen-Cilag made a deal with Novartis’ generics subsidiary Sandoz in order to postpone the entrance into market of a generic version of J&J’s fentanyl painkiller patch, which involved J&J making payments to Sandoz for every month the sale of the generic was delayed. This took place between July 2005 and December 2006, and the EU has claimed that prices were kept artificially high for 17 months as a result. The investigation began in October 2011, and the Commission has now issued  a ‘statement of objections’ to the two companies (here) in which it accused them of violating competition laws; companies found guilty of such violations can be fined up to 10% of annual global sales.

The investigation is part of a wider crackdown on ‘pay-to-delay’ agreements, an issue which has come to the fore in the last few years as European governments search for ways to reduce healthcare spending. Recently, investigators have gone as far as to raid the offices of drug companies in a bid to uncover evidence of anticompetitive practices. Commission Vice President in charge of competition policy Joaquin Almunia highlighted the cost to consumers resulting from ‘pay-to-delay’ agreements: “If our preliminary conclusions are confirmed, the Dutch subsidiaries of Johnson & Johnson and Novartis entered into a so-called 'co-promotion' agreement to avoid competing against each other, depriving users of fentanyl in the Netherlands from access to a cheaper pain killer”.

Last July drugmakers including Servier and Teva Pharmaceuticals were accused by the EU of delaying the entry to market of generic forms of the Perindopril heart medication, and the Commission also charged several drugmakers including Merck KGaA, Lundbeck and Ranbaxy Laboratories with delaying generic versions of Celexa, a blockbuster antidepressant. Across the Atlantic there has been similar focus on ‘pay-to-delay’ practices, which the FTC says are “increasing”.  FTC economists have predicted that if the situation doesn’t change, “exclusion payment settlements” will cost American consumers a whopping $35 billion over the next ten years.

A Novartis spokesman told Pharmalot that “Sandoz and Novartis operate to the highest of standards and take the position of the Commission seriously. They will closely examine the Statement of Objections and will avail themselves of their rights of defence as provided for in the process”. Janssen also issued a statement, claiming that “[The Statement of Objections] does not represent the Commission’s final decision” and stating that it “continues to believe these arrangements were legitimate”.



eyeforpharma Barcelona

Mar 19, 2013 - Mar 21, 2013, Barcelona, Spain

Put the all-powerful customer at the centre.