Pay-to-Delay Charges Against J&J and Novartis in Europe: U.S. Supreme Court Ruling Awaited
In the latest bid by regulators to squash so-called pay-to-delay deals, the European Commission has filed a complaint against Johnson & Johnson (JNJ) and Novartis (NVS) – and its Sandoz generic subsidiary – for allegedly conspiring to delay the generic introduction of a version of the fentanyl pain patch in the Netherlands.
The move had been expected after European antitrust regulators opened a probe into the drug makers in October 2011 as part of a widening crackdown on such deals (covered in prior Pharma news). The concern has picked up steam in recent years as governments attempt to grapple with rising healthcare costs and investigators have gone so far as to raid offices seeking incriminating documentation.
Pharmaceutical companies have had a hard time in recent years generating revenue growth, as patents expire on existing drugs and company labs fail to produce enough new drugs. The pay-to-delay approach can keep a higher-priced brand drug on the market beyond patent expiration. The U.S. Supreme Court is reviewing a major pay-to-delay case.
Last July, several drugmakers – including Lundbeck, Merck KGgA and Ranbaxy Laboratories – were charged with blocking the entry of generic versions of the best-selling Celexa antidepressant (covered in prior Pharma news). The EU also charged Servier and several other drugmakers, including Teva Pharmaceuticals (TEVA), with conspiring to delay a generic version of the Perindopril heart medicine.
In this latest case, a J&J unit known as Janssen-Cilag struck a deal with Sandoz in 2005, a time when there were no regulatory barriers to develop and market generic versions of fentanyl patches, which meant Sandoz could have sold a version in the Dutch market. The J&J unit agreed to make monthly payments to Sandoz for as long as no generic was launched, according to the EU.
Consequently, Sandoz abstained from selling generic fentanyl patches in the Dutch market from July 2005 until December 2006. The EU contends the deal may have delayed the entry of a cheaper generic for 17 months and kept prices for fentanyl in the Netherlands artificially high.
To read the remainder of this article, go to Pharmalot.
Ed Silverman, a contributing editor of YCharts, is the founder and editor of Pharmalot. He previously reported on the pharmaceutical industry and other business topics for the Star-Ledger of New Jersey, New York Newsday and Investor’s Business Daily. He can be reached at email@example.com.
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