Europe's top court upholds pay-for-delay fines against Lundbeck and others

Justice statue with sword and scales

Drugmakers were wrong if they believed that the top court of the European Commission would be more tolerant of pay-for-delay deals than the U.S. Supreme Court. On Thursday, the European Union’s Court of Justice not only upheld €146 million ($164 million) in fines against Denmark’s Lundbeck and 5 drugmakers that participated in the deals, but it also told them they are on the hook for the EC’s legal expenses and court costs as well.

In the Lundbeck ruling, the court said that none of its arguments were “well founded or effective” and that the fine was not inappropriate, so the court left it in place. It found similarly against appeals by Merck KGaA, Sun Pharmaceutical Industries (which bought Ranbaxy), Xellia Pharmaceuticals, Alpharma, Mylan ($MYL) subsidiary Generics U.K., Arrow Group and Arrow Generics.

The EU fined Lundbeck and others in 2013 for working out agreements to delay copies of the blockbuster antidepressant Celexa. Lundbeck was fined €93.8 million, while Merck KGaA was fined €21.4 million, Ranbaxy €10.3 million, Arrow Group €9.9 million and Alpharma €10.5 million. Some other companies will share those fines.

Authorities in Europe and the U.S. have decried the deals as a rip-off for consumers, delaying generics that could save payers huge amounts of money. Drugmakers have made the argument that the deals are not anticompetitive, don’t really delay generics from hitting the market and are just a good way to save everyone some legal costs.

The U.S. Supreme Court ruled in 2013 that while pay-for-delay deals are not automatically anticompetitive, the Federal Trade Commission and others can sue to challenge brand-name drugmakers' patent settlements with generics producers. In the 5-3 vote, the top court shot down a lower court ruling that protected drugmakers from these challenges.

- here’s the court diary of the cases

Related Articles:
Europe adds to drugmakers' pain on pay-to-delay strategy
Who wins after SCOTUS pay-for-delay decision? Lawyers
FTC stats show pharma backing off pay-for-delay deals after SCOTUS ruling