Lundbeck appeals against €93.8m fine

Lundbeck has filed an appeal against a €93.8m fine imposed by the European Commission over deals with rivals to block the supply of generic versions of antidepressant drug citalopram in the EU.

Lundbeck aims to have the decision annulled or the fine reduced.

The firm says it expects a decision on the appeal within two to three years.

Lundbeck says it 'strongly disagrees with the Commission’s decision', and considers that it 'contains several serious legal and factual errors, and several violations of Lundbeck’s right of defence'.

'We remain appalled over the decision, which errs in a number of highly important aspects. Through our appeal we aim to have a thorough legal assessment of the case that sets legal precedent which is of the highest importance to us and all other innovative companies,' says Mette Carlstedt, Senior Vice President, Corporate Legal at Lundbeck.

Lundbeck aims to have the decision annulled or the fine reduced

According to Lundbeck the errors in the Commission’s decision include 'misinterpreting the main criterion to determine whether an agreement restricts potential competition as established in case law and ignores key facts of the case. The decision also contains manifest errors regarding its assessment of value transfers in the context of patent settlement agreements.'

The Commission also 'errs in law by imposing a fine on Lundbeck despite the novelty of the factual and legal issues raised in this case. The fine violates the principle of legal certainty,' the firm claims.

Lundbeck says the decision also infringes the firm's rights of defence, because the Commission has 'changed the constituent elements of the alleged infringement between the Statement of Objections and the decision, without affording Lundbeck an opportunity of being heard on that change before the decision was taken'.

Lundbeck says it could be up to six years before a final ruling in the case is reached.

Regardless of its appeal, Lundbeck is still obligated to pay the fine and says it will do so during the third quarter of 2013.

In June, the European Commission imposed a €93.8m fine on Lundbeck and fines totalling €52.2m on several producers of generic medicines, including Alpharma (now part of Zoetis), Merck KGaA/Generics UK (Generics UK is now part of Mylan), Arrow (now part of Actavis), and Ranbaxy.

In 2002, the Commission said Lundbeck agreed with these companies to delay the market entry of generic versions of citalopram. These agreements violated EU antitrust rules that prohibit anticompetitive agreements (Article 101 of the Treaty on the Functioning of the European Union – TFEU), according to the Commission.

Instead of competing, the generic producers agreed with Lundbeck not to enter the market in return for substantial payments and other inducements 'amounting to tens of millions of euros', the Commission says.

Lundbeck says it could be up to six years before a final ruling in the case is reached

Internal documents refer to a 'club' being formed and 'a pile of $$$' to be shared among the participants. The agreements gave Lundbeck 'the certainty that the generics producers would stay out of the market for the duration of the agreements without giving the generic producers any guarantee of market entry thereafter', the Commission says.

In 2005 Commission conducted an inspection at Lundbeck premises with the aim of identifying whether the firm had 'misused a dominant position or had been involved in anticompetitive agreements in the markets for antidepressant drugs'.

In 2008, the Commission initiated a wide-ranging sector inquiry of the pharmaceutical industry to review possible anti-competitive conduct.

In 2010, the Commission opened a formal investigation against Lundbeck to investigate possible infringement of European competition law and specifically whether Lundbeck's agreements with generic manufacturers delayed the entry of generic citalopram into markets in the EEA.

In July 2012, the Commission issued a Statement of Objections to Lundbeck regarding agreements concluded with four generic competitors concerning citalopram.

On 19 June 2013, the Commission decided that these agreements had violated competition and imposed the fines on Lundbeck and the generic producers of citalopram.