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EU antitrust ruling leads to AstraZeneca fine

16-Jun-2005

AstraZeneca has been fined a hefty €60 million by the European Commission for manipulating patent laws to keep competitors out of the market, marking the first occasion that antirust laws have been used to combat patent abuse.

The Commission has concluded, after a two-year probe, that the Anglo-Swedish drug company carried out a series of anti-competitive action between 1993 to 2000 to keep generic competitors to its blockbuster ulcer drug Losec (omeprazole) off the market, and block the parallel trade in the drug.

In a statement, the EC said the company had systematically given misleading information to national patent authorities in Belgium, UK, Denmark and Germany to obtain extended patent protection for the drug. It also took unfair advantage of rules on market authorisations to block generic medicines and stop parallel traders from competing with Losec in Denmark, Sweden and Norway.

As a result, it says, AstraZeneca kept the price for Losec artificially high, causing damage to consumers and competitors. At the time, Losec was the biggest-selling drug in the world with annual revenues of more than $6 billion a year.

This is the first case where misuse of regulatory procedures has been found to amount to an abuse of dominant position under competition rules, and sets a precedent that could make it harder for other pharmaceutical companies to fend off generic competition, according to analysts.

AstraZeneca said it had acted in good faith and will appeal the decision and claimed that it 'did not make misleading misrepresentations to patent offices or courts to obtain supplementary protection certificates (SPCs) for Losec'.

"Indeed this matter was so unclear that it was ultimately decided by the European Court of Justice after several years of legal argument. The court's judgment recognised the difficulty in interpretation of the SPC Regulation and had no criticism of the company," it said in a statement.

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