Report: EU regulator readying pay-for-delay move on J&J, Novartis

The whole pay-to-delay issue has gotten a lot of attention in the U.S., particularly with the U.S. Supreme Court this year making it easier for regulators and payers to attack those deals. But Europe also thinks the deals tend to stink for patients and government payers, and it has begun issuing fines to alleged violators. Next up looks to be Novartis ($NVS) and Johnson & Johnson ($JNJ).

No one is commenting officially, but sources tell Reuters that EU regulators are up in arms about deals by the two that delayed generic versions of the pain drug fentanyl from getting to the Dutch market. They say action will come next month. With pay-for-delay agreements, drugmakers settle patent challenges with generic companies, giving the generic maker an assured payment but allowing the branded drugmaker more sales of its product.

The EU in June fined Lundbeck, Merck KGaA and a cadre of other companies €146 million ($195.5 million) for holding off copies of Lundbeck's blockbuster antidepressant, Celexa. The deals were a decade old, but it was the first pay-for-delay action for the antitrust regulator. At the time, it made clear it would not be its last.

That action came only days after the Supreme Court in the U.S. ruled 5-3 vote that the Federal Trade Commission (FTC) and others can sue to challenge the patent settlements. It rejected the industry position that the deals actually save consumers money in the long run. The court did not say the deals are automatically anticompetitive, but it shot down a lower court ruling that protected them from these challenges.

There has been some more movement on that front since the June ruling. Endo Pharma ($ENDP) and Actavis ($ACT) have been named in some new suits, as have AstraZeneca ($AZN), Teva ($TEVA), Ranbaxy and Dr. Reddy's.

- here's the Reuters story

Related Articles:
Europe adds to drugmakers' pain on pay-to-delay strategy
Drugmakers confront new pay-for-delay cases under new rules
Supreme Court slaps pharma aside in pay-for-delay ruling
When is it fair to slap a 'pay for delay' label on a patent settlement?