EU fines Teva, Cephalon over pay-for-delay drug deal

By Philip Blenkinsop
·2-min read
FILE PHOTO: The logo of Teva Pharmaceutical Industries is seen during a news conference in Tel Aviv

By Philip Blenkinsop

BRUSSELS (Reuters) - The European Commission has fined pharmaceutical company Teva and its now subsidiary Cephalon 60.5 million euros ($72 million) for agreeing to delay a cheaper generic version of Cephalon's sleep disorder medicine.

The fine is the fourth and final penalty following a series of EU antitrust investigations begun 11 years ago into "pay-for-delay" drug deals. Previous fines in 2013 and 2014 related to a cardiovascular medicine of Servier, an anti-depressant of Lundbeck and a Johnson & Johnson painkiller.

The agreement with Teva, to delay market entry of generic drug modafinil after Cephalon's main patents had expired, caused substantial harm to EU patients and healthcare systems, the Commission said on Thursday.

Modafinil is used to treat excessive daytime sleepiness associated with narcolepsy and was Cephalon's top-selling product under the brand Provigil for years.

Cephalon's main patents for Europe had expired by 2005 and the illegal agreement lasted to 2011, when Teva acquired Cephalon, the Commission said.

Teva had been ready to enter the market and had even started selling in Britain, but Cephalon induced Teva not to enter the market with a cheaper generic version in exchange for a package of side-deals and cash.

The European Consumer Organisation welcomed the fine, but regretted it had taken nearly a decade to come.

EU competition chief Margrethe Vestager said the Teva case was more complex than others and the Commission had to learn from EU court rulings on the previous decisions. She said the Commission continued to investigate drugmakers, including on exessive pricing

"So it's not that we say 'chapter closed, all is history'. No, we will still keep a keen eye on the pharmaceutical industry," she told a news conference.

Generic versions of drugs can lead to price drops of up to 90%. When Teva briefly introduced modafinil in Britain, it was half the price of Provigil.

Shares in Teva were 1.3% higher at 1436 GMT, valuing the firm around $10.50 billion.

The Commission fined Servier 427.7 million euros, Lundbeck 146 million euros and Johnson & Johnson 16.3 million euros.

($1 = 0.8398 euros)

(Reporting by Philip Blenkinsop; Editing by Elaine Hardcastle)