Ranbaxy Laboratories, 8 others fined by EU for blocking cheaper drugs

The European Commission has imposed a fine of 146 million euros on nine pharma companies, including Ranbaxy Laboratories, for delaying market entry of cheaper generic versions of Danish company Lundbeck's branded citalopram, a blockbuster antidepressant.

The generic companies which have been fined are Alpharma (now part of Zoetis), Merck KGaA/Generics UK (Generics UK is now part of Mylan), Arrow (now part of Actavis), and Ranbaxy.

"The European Commission has imposed a fine of euro 93.8 million on Danish pharmaceutical company Lundbeck and fines totalling euro 52.2 million on several producers of generic medicines," EC said.

According to information available on the European Commission (EC) website, Ranbaxy Laboratories and Ranbaxy (UK) Ltd have been fined euro 10.32 million (over Rs 80 crore).

In 2002, Lundbeck agreed with each of these companies to delay the market entry of cheaper generic versions of Lundbeck's branded Citalopram, a blockbuster antidepressant.

"These agreements violated EU antitrust rules that prohibit anticompetitive agreements (Article 101 of the Treaty on the Functioning of the European Union TFEU)," EC said.

Citalopram was Lundbeck's best-selling product at the time.

EC said after Lundbeck's basic patent for the Citalopram molecule had expired, it only held a number of related process patents which provided a more limited protection. Producers of cheaper, generic versions of citalopram therefore had the possibility to enter the market.

Reacting to the developments, European Commission Vice-President Joaqun Almunia (in charge of competition policy), said: "It is unacceptable that a company pays off its competitors to stay out of its market and delay the entry of cheaper medicines. Agreements of this type directly harm patients and national health systems, which are already under tight budgetary constraints. The Commission will not tolerate such anticompetitive practices".

Indian pharmaceutical major Ranbaxy has been in news for the wrong reasons of late.

The drugmaker, earlier in May, pleaded guilty to felony charges and agreed to pay $500 million to settle regulatory disputes in the United States. Thereafter, the Indian drug regulator decided to review Ranbaxy's dossiers and applications based on which the company was granted drug approvals in the past.

Reacting to the fine imposed by EU, the company said: "Ranbaxy is disappointed with the decision by the European Commission to rule its patent settlement agreement with Lundbeck, covering the molecule Citalopram, anti-competitive, and intends to appeal the Decision to the General Court of the European Union."

"These events took place over ten years ago, and the company considers that the Commission has misunderstood the facts and misapplied the law," Ranbaxy said, adding it believed it has strong grounds of appeal.

With inputs from PTI