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EU regulators charge J&J, Novartis over generic painkiller delay

A pedestrian passes the logo of Swiss pharmaceutical company Novartis at the company’s headquarters in Basel, Switzerland. Regulators on both sides of the Atlantic have warned pharmaceutical firms against agreements where brand-name companies pay generic competitors to withhold their rival drugs from the market

STEFFEN SCHMIDT/AP

EU antitrust regulators stepped up their fight against companies blocking the market entry of cheaper generic medicines, with charges against Johnson & Johnson and Novartis AG over a pay-for-delay deal in the Netherlands.

This is the third such case launched by the European Commission after it filed charges against Merck KGaA, Lundbeck, Servier Laboratories and several other pharmaceutical companies last year.

Regulators on both sides of the Atlantic have warned pharmaceutical firms against agreements where brand-name companies pay generic competitors to withhold their rival drugs from the market, saying such deals result in additional costs for consumers.

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The Commission, which acts as antitrust regulator in the 27-nation European Union, said it had sent a "statement of objections" or charge sheet to Johnson & Johnson and Novartis over an agreement between their Dutch subsidiaries.

"If our preliminary conclusions are confirmed, the Dutch subsidiaries of Johnson & Johnson and Novartis entered into a so-called 'co-promotion' agreement to avoid competing against each other, depriving users of fentanyl in the Netherlands from access to a cheaper painkiller," the Commission said in a statement.

It said the agreement meant Dutch consumers were not able to get access to cheaper generic fentanyl from July 2005 to December 2006.

The charges arose from an investigation of the pharmaceuticals sector after a Commission report highlighted deals between major drug makers aimed at hindering or blocking generic medicines in "pay-for-delay" deals.

The EU executive can fine companies up to 10 per cent of their global sales for breaching EU antitrust rules.

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