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AstraZeneca must pay €52.5m fine for anticompetitive tactics, rules European court

BMJ 2012; 345 doi: http://dx.doi.org/10.1136/bmj.e8396 (Published 10 December 2012) Cite this as: BMJ 2012;345:e8396
  1. Nigel Hawkes
  1. 1London

The drug company AstraZeneca will have to pay a fine of €52.5m (£42.4m; $68m) for trying to prevent the marketing of cheaper generic versions of its blockbuster ulcer treatment omeprazole (marketed in the United Kingdom as Losec) after its appeal against a ruling made by the European Commission was rejected in the European Court of Justice.

The commission welcomed the decision, saying that it showed that misuse of drug regulatory procedures could amount to an abuse of antitrust rules. AstraZeneca said that it was disappointed, that it took compliance with all laws seriously, and that it was committed to doing business in an ethical and proper manner.

The dispute between the company and the commission is longstanding and relates to activities undertaken by AstraZeneca between 1993 and 2000. After a complaint by two manufacturers of generic drugs, the commission launched an investigation in 1999 into two allegations: that AstraZeneca had lied to patent lawyers, patent offices, and courts in several member states over the date at which omeprazole had originally been given marketing authorisation; and that by replacing a capsule formulation of the drug with tablets and asking for the capsule authorisation to be withdrawn it had made it impossible for manufacturers of generic drugs to market the capsules.

In 2005 the commission found the case proved and imposed a fine of €60m. On appeal, the General Court of the European Union upheld the finding but reduced the fine to €52.5m. AstraZeneca then appealed to the EU’s highest court, the European Court of Justice, which dismissed the appeal in a ruling on 6 December. Contrary to what the company claimed, the General Court had not made any errors in law and was entitled to rule that AstraZeneca’s actions were an abuse of its dominant market position, the Court of Justice concluded.

At its peak in 2000 omeprazole was the world’s best selling drug, with sales in the United States (where it was sold as Prilosec) worth $6bn a year. Although the patent expired in 2001, AstraZeneca was able to delay competition from generic versions by using methods some of which have now been found to be illegal in Europe.

The London law firm Linklaters said that the judgment was significant because it meant that companies with a dominant position in the market could not delay generic competition by tinkering with marketing authorisations.

Jonas Koponen, a partner at the firm, said, “The judgment must be seen in the light of the European Commission’s policy of removing obstacles to competition from generics.” He added that because the General Court had issued its ruling in 2005, most companies would have already factored the guidance into their business practices.

Ana Nicholls, healthcare analyst at the Economist Intelligence Unit, said, “This case exposed some of the stratagems that pharma companies have used to delay the launch of cheaper generic versions of their drugs. By upholding the ruling, the court confirmed that pharma companies have to stamp out these practices or risk a substantial fine. As such, it should help EU governments to gain the maximum benefit from the patent cliff, which reached its steepest point last year. It should also send a strong message to US regulators, who have been trying to step up efforts against ‘pay for delay’ tactics.” (Pay for delay is when companies about to lose patent protection pay rivals to stay out of the market.)

AstraZeneca has pursued a policy of legal action in Europe and the US to defend its market position, with mixed success.1 In the UK the High Court ruled that the company was not entitled to extend the patent life of its antipsychotic drug quetiapine (Seroquel) by virtue of having launched a slow release version, Seroquel XR. But a court in the US ruled differently, finding that an extension was justified. Another US court rejected AstraZeneca’s claim for extended exclusivity for Seroquel itself after the company sought to use a labelling issue to prolong the patent.

Notes

Cite this as: BMJ 2012;345:e8396

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