December 6, 2012 6:00 pm

Court of Justice upholds AstraZeneca fine

Europe’s highest court has upheld a €53m fine against AstraZeneca, in a closely watched case that penalised the Anglo-Swedish pharmaceutical group for policies aimed at delaying generic competition.

The European Court of Justice rejected the company’s appeals against rulings that it had abused its dominant position on its blockbuster anti-stomach acid drug Losec, bringing to a close a series of appeals since the company was first fined €60m in 2005.

The Luxembourg-based court supported an earlier appeal judgment that ruled against AstraZeneca and reduced the level of the fine to reflect insufficient proof of its actions in some EU countries.

The judgment was the first example of an abuse of dominance action brought by the competition authorities in Brussels in the drug sector, and followed still higher penalties for companies in other sectors such as Microsoft and Intel.

It comes at a time of intensifying pressure in Brussels to lower medicine costs across Europe by encouraging competition from generic drug manufacturers to reduce the price of lower-priced equivalents of innovative medicines as soon as their patents expired.

Jonas Koponen, a partner with Linklaters, said: “This solidifies the Commission’s ‘unbeaten’ record in abuse of dominance cases. No commission decision has been overturned in its entirety. The pharma industry has followed this case very closely and tried to adapt its own practices in risk management as a result.”

The Commission has since taken other legal actions including pursuing Servier of France and Lundbeck of Denmark for “pay for delay” agreements also designed to delay generic companies launch of drugs. Both companies have denied the charges.

The ruling argued that AstraZeneca had made “deliberately misleading representations” over the dates when it originally filed patents on Losec, providing it with extensions of its exclusivity longer than those to which it was entitled under EU rules on “supplementary protection certificates”.

It also considered that the company had tried to defer generic rivals launching versions of Losec (also known as omeprazole) by withdrawing its registration of the original drug with regulators in a number of European countries.

That had the effect of requiring generic producers to prepare an expensive full regulatory dossier for approval as if for a new drug, rather than simply demonstrating equivalence to Losec.

AstraZeneca said in a statement: “AZ is disappointed with the Court of Justice’s decision that AZ’s appeal should be dismissed. AZ takes compliance with all laws seriously and has a fundamental commitment to doing business in an ethical and proper manner.”

Marie Manley, a partner with Bristows, said: “The pharmaceutical industry is now subject to a set of onerous but not fully clear obligations. Ensuring compliance will require pharmaceutical companies to build in more checks and balances to their internal procedures.”

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