Europe Says Drug Makers Paid for the Delay of Generic

European antitrust officials accused the pharmaceutical giants Johnson & Johnson (J&J) and Novartis of deliberately delaying the availability of a less expensive generic version of a powerful medication used to relieve severe pain in cancer patients.

This case focuses on monthly payments made by Netherlands-based subsidiary of J&J to Sandoz, a unit of Swiss company Novartis. Although the companies contend the payments were legitimate, the European Union’s antitrust chief said that the money probably changed hands in order to keep lower-cost versions of the drug, Fentanyl, off the market in the Netherlands. Fentanyl is a transdermal patch that delivers the pain medication through the skin.

European authorities are “determined to fight undue delays in the market entry of generic medicines,” Joaquin Almunia, the European competition commissioner, stated.

A goal of European authorities has been to increase patient’s access to less costly drugs, as name-brand drug patents, which are worth tens of billions of euros, expire. The end of a drug’s patent protection, which typically is as long as 25 years in Europe, can hurt a pharmaceutical company’s bottom line but is advantageous to government and private insurers by keeping costs down.

Drug manufacturers who agree to delay the introduction of generic drugs have come under increased scrutiny in both the U.S. and Europe in recent years, with regulators on both sides concluding this is anticompetitive. In the U.S., the Supreme Court is scheduled to deal with this issue in March. Such arrangements typically are the result of patent disputes between the brand name and generic drug makers, even though no such dispute was mentioned in the most recent case between J&J and Novartis.

Fentanyl is widely used in Europe and the United States, and typically is paid for by government-provided health plans or, in many cases in the United States, by private insurance. Although the pricing of such drugs is usually negotiated behind closed doors, generic versions are almost always much cheaper.

Patent expirations also open opportunities for generic competitors, which is the reason why in some cases drug makers have been accused of paying generic companies to delay bringing their products to market.

A preliminary investigation by Mr. Almunia’s office found that J&J unit in the Netherlands, Janssen-Cilag, made the payments to stop Novartis from selling generic fentanyl skin patches in the Netherlands for more than a year, from July 2005 until December 2006. That kept the prices high, according to the European Commission, the European Union’s administrative body that enforces antitrust law. Mr. Almunia’s office would not disclose the amount of money Janssen-Cilag paid to Sandoz, nor would officials indicate whether the investigation would go beyond the Netherlands.

A spokesman for the J&J subsidiary said in a statement that the company had acted properly. Sandoz said in a statement that it and Novartis would rebut the accusations made by the commission by using their “rights of defense as provided for in the process.”

These drug giants care about the profits before anything else. The public suffers when lower cost medications are not made available to them. Many people are on fixed incomes, and some even go without their medications if they cannot afford them. Do you think there should be sanctions against these big pharmas for deliberately delaying the availability of generics?

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