Servier and 5 generics are fined for delaying the generic entry of perindopril

August 18, 2014

Servier and 5 generics are fined for delaying the generic entry of perindopril

On 9 July 2014 the European Commission imposed fines totaling Euro 427.7 million on the French pharmaceutical company Servier and five producers of generic medicine for concluding a series of deals preventing the launch of a new generic medicine. The European Commission decided their actions were in violation of Articles 101 and 102 TFEU.

 

Servier held a significant market power on the bestselling blood pressure medicine Perindopril, however the patent on Perindropil expired in 2003. To secure its market share, Servier implemented a number of anticompetitive strategies.

 

First of all, generic companies tried to enter the market by seeking access to non-protected technology. However, when Servier acquired the most advanced technology in 2004, there were almost no sources of non-protected technology left, forcing a number of generic to stop and delay their market entry.

 

Secondly, the European Commission concluded that between 2005 and 2007, each time a pharmaceutical generic company attempted to enter the market, Servier delayed such entry by concluding a respective settlement that envisaged payments from Servier to the generic company in question. The cash payments from Servier to such generics for the delay of their market entry totaled up to several tens of millions of euros.

 

The European Commission made a number of references to internal documents of the companies in order to uphold its decision. These included Servier’s comment “great success = 4 years won” referring to their successful delay of the entry of generic medicine after the expiry of the perindopril patent in 2003.  The European Commission concluded those were the aggravating circumstances for Servier and certain generics whose actions could not be justified.

 

Based on its findings, the European Commission decided the companies should be fined for the breach of Article 101 TFEU, particularly for the “pay-for-delay” agreements, and of Article 102 TFEU for the abuse of dominant position. In setting up the fine the European Commission took into account the duration of each infringement and its gravity.

 

It is very likely that Servier will appeal its decision to the General Court of the EU in hope to at least reduce the fine.

 

At the same time, there any person or company affected by the anti-competitive behaviour as described in this case may bring the matter before the courts of the EU Member States and seek damages. The European Commission decision in this case constitutes a binding proof that the anticompetitive and illegal behaviour took place. Currently there are damages actions in the United Kingdom concerning Servier's practices in the market for perindopril. 

 

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