Legal Update - Johnson & Johnson and Novartis Fine

Regulatory Law – Pharmaceuticals – Johnson & Johnson – Novartis – Sandoz – Fines for Anticompetitive Behaviour – European Commission 

 

The European Commission recently imposed a fine of €16 million on Johnson & Johnson (“JJ”) and Novartis for delaying the market entry of a generic painkiller, fentanyl.

 

Background

 

• JJ developed fentanyl and has been exploiting it in numerous formats since the 1960s, including as a patch;
• In 2005, JJ’s protection in respect of the patch expired in the Netherlands;
• At the time, Sandoz (Novartis’ Dutch subsidiary) was close to launching its generic fentanyl patch;
• An agreement was concluded between Sandoz and JJ, whereby strong incentives in the form of monthly payments were to be made to Sandoz to not enter the market. The payments exceeded the profits Sandoz expected to get from sales of its generic product;
• It was only when a third party was about to launch a generic fentanyl patch in December 2006, that the agreement was stopped.

 

Outcome

 

It was concluded by the European Commission that the agreement, which had been termed a “co-promotion agreement”, was anticompetitive as it delayed the entry of a cheaper generic fentanyl patch and kept the prices for fentanyl in the Netherlands artificially high.

 

More information can be found on the European Commission’s website.

 

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© RT COOPERS, 2013. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.

 

  

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