The European Commission is fining Servier and five generic drug companies—Niche/Unichem, Matrix (which is now a part of Mylan), Teva, Krka, and Lupin—€427.7 million (around $582.59 million) for making a series of deals aimed at protecting Servier's blood pressure medication perindopril from generic competition. The EC says Servier used a series of patent settlements with generic rivals and a technology acquisition as part of a scheme to exclude competitors and delay the entry of cheaper generic medicines—something that violates EU antitrust rules.
Perindopril, according to the EC, used to be Servier's best-selling product, and the French pharma's patent for the perindopril molecule for the most part expired in 2003. The EC says Servier made a series of deals with generic firms from 2005 to 2007 where the firms would agree to abstain from competing in exchange for a share of the French firm's rent. The cash payments Servier made to generic firms reportedly amounted to several tens of millions of euros; in one case, Servier even offered a generic company a license for seven national markets if it ceased all efforts to launch perindopril in the EU.
"Servier had a strategy to systematically buy out any competitive threats to make sure that they stayed out of the market," Joaquín Almunia, the EC's commission vp, said in a statement. "Such behavior is clearly anti-competitive and abusive. Competitors cannot agree to share markets or market rents instead of competing, even when these agreements are in the form of patent settlements. Such practices directly harm patients, national health systems, and taxpayers."
Servier is being hit with €331 million (around $450.88 million) in fines; the five generic firms are being slapped with €96.7 million ($131.7 million).
In response to the EC's decision, a spokesperson from Servier argued that patients have not been deprived of perindopril at any time, generic entry has not been delayed, and that the firm acted in a transparent and legitimate way to defend its patents, cooperating with EC since the beginning of this investigation and the statement of objections it received in July 2012. The spokesperson added that the settlements were simply a means to put an end to "long, costly, and uncertain disputes."
Servier believes the EC's allegation of abuse is based on a market definition limiting the relevant market to the single molecule of perindopril; treatments for hypertension include multiple competing products within the ACE inhibitor therapeutic class (perindopril is an ACE inhibitor).
"Medically or economically, limiting the relevant market to a single molecule of such a crowded therapeutic class is absurd," the spokesperson commented. "The European Commission’s decision against our intellectual property rights sends a very bad signal to companies of all sizes, which make the choice to innovate in Europe. This kind of sanction jeopardizes the pharmaceutical companies’ commitment to research, and this is thus detrimental to patients."