The European Commission is investigating Swiss
pharmaceutical company Novartis and its US rival Johnson & Johnson
(J&J) on suspicion of delaying the launch of a generic painkiller in
the Netherlands, in breach of EU competition laws, it said Thursday.
The investigation, which could lead to hefty fines, relates to a 2005 deal signed between a subsidiary of J&J selling the painkiller Fentanyl in the Netherlands and rival generic manufacturer Sandoz, a subsidiary of Novartis.
Under the agreement, which ended in December 2006, Sandoz received money for every month that it did not launch a Dutch generic alternative to Fentanyl, according to the commission.
"This may have delayed the entry of a cheaper generic medicine for 17 months and kept prices for Fentanyl in the Netherlands artificially high," the EU executive wrote in a statement.
Fentanyl is a more powerful drug than morphine, according to the commission.
EU Competition Commissioner Joaquin Almunia accused the pharmaceutical giants of agreeing to "avoid competing against each other, depriving users of Fentanyl in the Netherlands from access to a cheaper painkiller."
He said generic medicines were important in keeping medicine affordable for patients and healthcare providers.
"It is also important to make sure that pharmaceutical companies do not freeride our welfare state and health insurance systems, especially in this period of constraints on public spending," Almunia added.
The commission launched similar probes last year, as part of a sector-wide investigation, alleging that a generic antidepressant medicine and a cardio-vascular drug were both withheld from the market under so-called "pay for delay" agreements.
EU cartel fines can cost companies up to 10 per cent of their annual turnover.
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