European Trade Regulators Charge Companies for 'Pay-for-Delay' Agreements

If industry practitioners of so-called pay-for-delay settlements are worried about the climate for the legal agreements in the US after a recent court ruling against the measures, they should be just as concerned about European regulators, reports Reuters and The Financial Times.

The agreements are commonly used by pharmaceutical manufacturers of branded products to delay the entry of generic competition in return for large cash payments or other forms of compensation. Once subject to generic competition, the profits associated with branded products can fall substantially, creating an incentive for companies to delay the market entry of their competitors.

Both publications are reporting EU's competition commissioner, Joaquín Almunia, is pressing charges against pharmaceutical manufacturers Servier and Lundbeck over an alleged agreement to delay generic versions of Celexa (citalopram), a selective serotonin reuptake inhibitor (SSRI) used to control major depression, and Aceon (perindopril), an angiotensis-converting enzyme inhibitor used to treat high blood pressure and other cardiovascular conditions.

The Financial Times reports the commission alleges Lundbeck and Servier issued payments to several generic companies each to delay generic copies of Celexa and Aceon for several years. Lundbeck meanwhile has denied all allegations of wrongdoing, saying they are "groundless" and without merit. Servier said in a statement that it had not yet been notified of the charges and would not be able to comment.

As in the US, European trade regulators have taken an eye to the agreements' effects on public health systems, which can see substantially higher costs by not being able to prescribe lower-cost generic equivalents.

"Private companies can't be allowed to free-ride our welfare states and health insurance systems," Almunia said in a statement.

Read more:

Financial Times - EU to charge two drugmakers over generics

Reuters - EU regulators charge Lundbeck, others over generics