AstraZeneca fined 60 million euros

The European Commission has imposed a fine of 60 million euros on Anglo-Swedish pharmaceutical giant AstraZeneca PLC for illegally pushing rivals of its stomach ulcer medicine Losec out of the market.

The commission said the company had delayed or blocked market access for generic versions of Losec and had prevented parallel imports of Losec from 1993 to 2000.

It said its actions constitute “serious abuses of its dominant market position” and violated competition.

According to the commission, the company obtained supplementary protection certificates for Losec – a product which was once the world’s biggest selling drug, generating annual sales of more than $6 billion in 2000. The introduction of generics and an improved version of the product, launched by AstraZeneca in part to counteract the impact of generic versions, hit sales, which fell to $1.95 billion by 2004.

The certificates extend the basic patent protection for medicines by a maximum of five years to register time spent between filing the patent and eventual product marketing.

However, as Losec was already on the market when the laws took effect, extra protection was only allowed if EU market authorisation was granted after certain cut off dates.

AstraZeneca is said to have concealed from these patent offices the date on which it received its first marketing authorisation for Losec, thereby garnering extra protection in certain countries – Belgium, Denmark, Germany, the Netherlands, Norway and the UK.

The commission said the company has therefore been fined for “misusing the patent system and the procedures for marketing pharmaceuticals to block or delay market entry for generic competitors” to the drug.

EU competition commissioner Neelie Kroes said: “Misleading regulators to gain longer protection acts as a disincentive to innovate and is a serious infringement of EU competition rules.”

The second infringement concerns parallel imports. The company was found to have restricted the import into member states of the EU where prices are higher from other member states where Losec can be bought at a cheaper price.

It did this by de-registering the market authorisations for Losec capsules in Denmark, Norway and Sweden to block or delay the entry by generic firms and parallel traders. In these countries, only tablets were authorised, thereby restricting opportunities for generic producers.

If a drug has no market authorisation then generic producers cannot obtain a market authorisation for their own version and importers cannot obtain import licences.

Today’s decision concludes investigations started in July 2003. The investigations were prompted by two generic drug companies which complained that AstraZeneca had abused the pharmaceutical patent system.