The European Commission this week fined Johnson &

Johnson and Novartis a combined €16 million for delaying the market entry of a

generic painkiller often used by cancer patients.

U.S.-based Johnson & Johnson was fined €10,798,000, and

Swiss-based Novartis was fined €5,493,000 for an agreement their Dutch

subsidiaries made in 2005 regarding the pain-killer depot patch fentanyl. According to the commission, the subsidiaries

formed an agreement to delay the market entry of a less expensive, generic

version of the fentanyl patch in the Netherlands, and violated the EU's

antitrust laws.

“J&J paid Novartis to delay the entry of a generic pain

killer,” Joaquin Almunia, the commissioner responsible for competition policy

and vice president of the European Commission, said in a statement following

the decision. “The two companies shockingly deprived patients in the

Netherlands, including people suffering from cancer, from access to a cheaper

version of this medicine. Today's decision should make pharmaceutical companies

think twice before engaging into such anticompetitive practices, which harm

both patients and taxpayers.”

Johnson & Johnson first brought fentanyl to the market

in the 1960s, and makes different forms of the powerful painkiller. The

pharmaceutical company's patent protection for the fentanyl depot patch ran out

in 2005 in the Netherlands. In July 2005, Novartis subsidiary Sandoz was poised

to release a generic version of the drug, including having the product

packaging ready, but held off on the drug's release after signing a “co-promotion

agreement” with J&J's Dutch subsidiary Janssen-Cilag, the commission said.

The agreement between the competitors included monthly

payments from the J&J subsidiary to Sandoz, which exceeded the likely profits

the company would have received by releasing the generic to the market, the commission

said. Sandoz did little to no promotion activities in support of the agreement.

The agreement lapsed in December 2006, when another company was getting ready

to launch its own generic fentanyl patch.

The commission launched a formal investigation into the

matter in 2011. The commission said the result of the “co-promotion agreement”

was a 17-month delay in providing a cheaper generic version of the drug,

keeping prices artificially high in the Netherlands.

Sandoz released a statement that it had received the

commission's decision and “rejected” the allegations that the agreement was

intended to deprive patients of cheaper medicine in the Netherlands. The

company said it looks forward “to putting this historical matter behind us.”

“Both Novartis and Sandoz fully believe in competition and

are committed to producing high-quality, affordable medicines to help people

around the world secure access to healthcare,” the company's statement said.

The commission's antitrust arm has pledged to continue

investigating so-called “pay for delay” agreements like the one in the

J&J-Novartis case. Earlier this year, the commission fined Denmark's

Lundbeck and a group of generic producers for delaying the market entry of an

antidepressant called citalopram.

In other antitrust action, the commission revealed last week

that it had raided the offices of

several consumer electronics companies in different member states after

suspicions surfaced that the companies were violating antitrust regulations.

The Commission said the companies are suspected of

restricting online sales of consumer electronics and small appliances, which

could lead to higher prices or unavailability of the products through certain

online retailers. While the commission did not name the companies involved, Reuters reported last week that the

companies raided included Philips, Samsung Electronics, and Media-Saturn. Reuters

said the three companies acknowledged their offices were visited by EU

officials and said they are cooperating with the investigation.

Topics