Reverse payment deals under the microscope in the EU

December 20, 2013

In a strong signal to the pharmaceutical industry, on 10 December 2013 the European Commission imposed fines totalling just over EUR 16 million on the U.S. pharmaceutical company Johnson & Johnson (J&J) and the Swiss pharmaceutical company Novartis for agreeing in 2005 to delay the market entry of a generic version of the pain-killer fentanyl in the Netherlands. The European Commission concluded that the co-promotion agreement reached between the two companies was in fact a so-called “reverse payment” agreement, designed to delay the entry of a generic drug and to share monopoly profits. Joaquín Almunia, the European Commissioner in charge of competition policy, called such agreements “unacceptable” and threatened that the Commission “will not tolerate such anticompetitive practices”. J&J and Novartis have the right to appeal the European Commission’s decision to the General Court of the European Union.

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