Antitrust: Commission Sends Statement of Objections on Perindopril to Servier and Others
The European Commission has informed the French pharmaceutical company Servier and several of its generic competitors of its objections against practices potentially delaying the generic entry of perindopril, a cardio-vascular medicine. At this stage, the Commission takes the view that the patent settlement agreements concluded by Servier with Niche/Unichem, Matrix (today Mylan Laboratories Limited), Teva, Krka and Lupin, as well as Servier's acquisition of key competing technologies were aimed at delaying or preventing the market entry of cheap generic versions of perindopril, in violation of EU antitrust rules. The sending of a statement of objections does not prejudge the final outcome of the investigation.
In its statement of objections, the Commission takes the preliminary view that Servier and generic competitors had agreed to limit competition to perindopril and that, as part of a comprehensive strategy, Servier had acquired competing technologies. These practices could have aimed at preserving Servier's position with regard to perindopril, which was about to reach the end of its patent protection.
The Commission formed objections against two specific sets of practices by Servier, which appears to be dominant in the market for perindopril. Firstly, Servier acquired scarce competing technologies to produce perindopril, rendering generic market entry more difficult or delayed. Secondly, Servier unduly protected its market exclusivity by inducing its generic challengers to conclude patent settlements. This behaviour, if established, infringes EU Antitrust rules that prohibit restrictive business practices and the abuse of a dominant market position (respectively Articles 101 and 102 of the Treaty on the functioning of the European Union – TFEU).
The Statement of Objections is addressed to the following entities: Servier SAS, Les Laboratoires Servier, Servier Laboratories Limited, Adir, Biogaran (all belonging to the Servier group), Teva Pharmaceuticals Industries Limited, Teva Pharmaceuticals Europe BV, and Teva UK Limited (belonging to the Teva group), Unichem Laboratories Limited and its subsidiary, Niche Generics Limited, Mylan Incorporated and its subsidiary, Mylan Laboratories Limited (previously Matrix), Krka, d.d. Novo mesto, and Lupin Limited.
The Commission had opened proceedings against Servier and other companies on 8 July 2009 (see MEMO/09/322).
The Commission's competition inquiry into the pharmaceutical sector had indicated a number of structural and behavioural problems that potentially led to distortions of competition and delays to entry of new, innovative as well as cheaper generic medicines into the EU market (see IP/09/1098 and MEMO/09/321). In its final report the Commission made a number of recommendations to address these problems, and particularly emphasised stronger competition law enforcement especially with regard to patent settlements.
Following the sending of the statement of objections to Lundbeck only a few days ago (see IP/12/834), today's sending of statements of objections in the Servier case is a further important step in addressing the issues highlighted in the final report of the sector inquiry (see MEMO/12/593)
A Statement of Objections is a formal step in Commission investigations into suspected violations of EU antitrust rules. The Commission informs the parties concerned in writing of the objections raised against them and the companies can examine the documents on the Commission’s investigation file, reply in writing and request an oral hearing to present their comments on the case before representatives of the Commission and national competition authorities.
The duration of antitrust investigations varies according to the complexity of the case, the number of markets and companies involved and whether they cooperate with the Commission.
If, after the parties have exercised their rights of defence, the Commission concludes that there is sufficient evidence of an infringement, it can issue a decision prohibiting the conduct and impose a fine of up to 10% of a company's annual worldwide turnover.
Antoine Colombani (+32 2 297 45 13)
Marisa Gonzalez Iglesias (+32 2 295 19 25)
Posted: July 2012