Conspiring to keep distributors from working with generic drugmakers is a no-no in Brazil, and the country's antitrust regulator is fining Merck KGaA for allegedly doing just that. And while the move harkens back to a meeting that happened 5 years ago, it's reflective of actions taken more recently by regulators in the U.S. and EU.
Brazil is demanding $1.8 million from Merck for its participation in a 1999 meeting, which also involved the domestic units of pharma giants Bayer, Abbott Laboratories ($ABT), Bristol-Myers Squibb ($BMY), Eli Lilly ($LLY), Johnson & Johnson ($JNJ), Roche ($RHHBY) and others, The Wall Street Journal's Pharmalot reports. A spokesman from Brazil's Administrative Council for Economic Defense (CADE) told the blog the other drugmakers were fined several years ago.
"Anticompetitive effects of the practice are clear," CADE spokesman Alessandro Octaviani said in a statement. Generics presented a "cheaper option and possibly better and [were] more accessible to the entire population."
A Merck spokesman, on the other hand, told Pharmalot the company was surprised by the decision and claimed there was a lack of evidence "demonstrating any anti-trust violation." Merck didn't begin selling generics in Brazil until two years after the meeting took place, he said. It may file an appeal.
As Pharmalot notes, Brazil's action comes as more and more countries turn their attention toward certain pharma industry practices that may limit generic competition. Pay-for-delay deals--in which drugmakers pay generic rivals to delay the launches of their low-cost copies--in particular have been in the spotlight as of late, with regulators cracking down in both the U.S. and EU.
And fast-growing Brazil is an increasingly important market for many drugmakers--including Merck KGaA, whose "organic growth was particularly fueled by the dynamic business performance" in its emerging markets segment, which comprises Latin America and Asia, the company said in last year's annual report. Sales for the region increased by 9.3%, with the share of group sales generated by emerging markets climbing to 36%.
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