EU body objects to patent settlement involving Indian pharma cos

Written by Soma Das | New Delhi | Updated: Jul 31 2012, 08:18am hrs
The EU anti-trust commission has objected to a patent settlement between French company Servier and a score of Indian generic firms, such as Unichem, Matrix Lab (now Mylan) and Lupin, on a cardio-vascular drug perindopril. It claimed that such an agreement would potentially delay the launch of cheaper generic alternatives even after the patent of the original drug expires.

At this stage, the commission takes the view that the patent settlement agreements concluded by Servier with Niche/Unichem, Matrix (now Mylan Laboratories Limited), Teva, Krka and Lupin, as well as Servier's acquisition of key competing technologies were aimed at delaying or preventing the market entry of cheap generic versions of perindopril, in violation of EU antitrust rules," said an EU commission notification on Monday. It, however, added that the sending of a statement of objections does not prejudge the final outcome of the investigation.

In its statement of objections, the European Commission takes the preliminary view that Servier and generic competitors had agreed to limit competition to perindopril and that, as part of a comprehensive strategy, Servier had acquired competing technologies. These practices could have aimed at preserving Servier's position with regard to perindopril, which was about to reach the end of its patent protection, the notification said.

The EU Commission has categorically raised objections against two specific sets of practices by Servier, which is the dominant player in the European market for perindopril. Firstly, Servier acquired scarce competing technologies to produce perindopril, rendering generic market entry more difficult or delayed.

Secondly, Servier unduly protected its market exclusivity by inducing its generic challengers to conclude patent settlements. "This behaviour, if established, infringes EU Antitrust rules that prohibit restrictive business practices and the abuse of a dominant market position (respectively Articles 101 and 102 of the Treaty on the functioning of the European Union TFEU)," the EU commission notification said. A Lupin spokesperson said the firm has not received the statement of objections from EU Commission. We will decide further course of action accordingly.

A statement of objections is a formal step in EU Commission investigations into suspected violations of EU antitrust rules. Through this, the EU commission informs the companies of the objections raised against them, giving these firms a chance to examine the documents on the investigation file, reply in writing and request an oral hearing before representatives of the commission and national competition authorities.