Lundbeck v European Commission - a rotten decision or effective competition law enforcement?

This GuestKat was entertained yesterday evening at Monckton Chamber's event at the Goldsmith Centre in London entitled "Recent key developments in competition law and regulation in the pharmaceutical sector". The main focus of the seminar was on last month's decision of the General Court in Case T‑472/13, Lundbeck v European Commission. This is the first time that the General Court has ruled that so called 'pay-for-delay' agreements breach EU antitrust rules, and the General Court upheld fines of €146 million on Lundbeck and the generic companies involved.

The speakers were Ronit Kreisberger, Ben Rayment, and George Peretz QC, and the session was chaired by Sir Robin Jacob.  Each of the speakers have been involved in the case, and were not expressing their own views or those of their clients in the debate.


The case concerns the Danish Pharmaceutical company Lundbeck's anti-depressant citalopram drug. Lundbeck's compound patent for citalopram had expired by 2002, but it also held a crystallisation patent that protected citalopram when produced using a crystallisation process. Lundbeck concluded a series of settlement agreements with four generic manufacturers (Alpharma, Arrow, Generics UK and Ranbaxy), and these agreements were the subject of the General Court's analysis. Under these agreements, Lundbeck made substantial payments to each of the generic companies, and the generic companies agreed not to enter the citalopram market for a defined period. The Commission's decision had found that the concluded agreements harmed patients and health care systems, in that they allowed Lundbeck to keep the price of its blockbuster drug citalopram artificially high, in breach of Article 101 of the TFEU.


Never one to sit on the fence, Sir Robin kicked off proceedings by labelling the decision a rotten case, and invited Ronit Kreisberger and Ben Rayment to take the floor in the debate.
One key issue is that the Commission declined to perform any analysis of economic effects in its decision - it only assessed the object of the settlement agreements. The audience was reminded that where an agreement has an anti-competitive object, the Commission is not put to proof on the effects of that agreement. This promotes legal certainty, and has a deterrence effect. So far so good. But did the settlement agreements deserve to be assessed on an object basis only?

As a threshold issue, article 101 is not triggered unless the parties to the agreements are actual or potential competitors.  The generic companies maintained that they were not potential competitors: they could not launch a generic form of citalopram because they were prohibited from doing so by Lundbeck's crystallisation patent. This was rejected by the General Court on the basis that the patent was not an insurmountable barrier to entry due to the presence of a number of factors, which included the following: the parties' internal documents suggested that the patent might be 'weak', litigation was unlikely even if the generics had launched, and the generics' investments were substantial which provided evidence of their intentions to develop and launch generic citalopram.  The General Court stated that the generic manufacturers could have developed citalopram using alternative processes [Merpel wonders whether these were really practical alternatives, given that the generic companies would have relied on Lundbeck's data to obtain marketing authorisation from the regulator].  This essentially involves a 'counter-factual' assessment. Is such an assessment appropriate for an abbreviated 'object' inquiry? Where does this leave pharmaceutical companies in circumstances where some but not all of these factors are present?  [There is no right under competition law to launch an infringing product, says Merpel!].

On the other hand, certain evidence pointed in the direction of the agreements having an anti-competitive object. The settlements covered all citalopram - irrespective of the production method, and were therefore inconsistent with the scope of the crystallisation patent.  Another oddity is that the generic companies only agreed to delay entry for a period of 2-3 years - this was significantly shorter than the term of the crystallisation patent and would therefore not have guaranteed ‘early entry’.  It is worth noting that the Commission did not itself assess the validity of the patent - it merely reviewed the parties' documents on this issue.


The General Court appeared according to some participants to proceed on the basis that because some patents will fall when subjected to revocation actions,  all patent settlement agreements should be treated as presumptively unlawful.

IPKat: getting her claws out
Should this be an area that is the subject of ex post competition enforcement or would ex ante regulation be more appropriate? There were a number of thought provoking questions for the panel from the floor:
1. Is the Commission adopting different standards in comparable contexts? The Commission appears very sceptical of 'potential competitor' entry in the merger context, yet in these 'pay for delay' cases, the Commission is willing to label generic manufacturers as potential competitors even though it is highly uncertain what would have happened in those markets 'but for' the settlement agreements. The speakers were divided in terms of whether those contexts were comparable, and whether a similar approach should be applied in both contexts.
2. What practical steps can a patentee take to ensure that it does not fall foul of antitrust provisions? It was noted that the settlement agreements in issue were particularly badly drafted.  It is key that the scope of any settlement does not extend beyond the scope of the relevant patent(s).

Following judgment, Lundbeck issued a press release expressing disappointment with the General Court's conclusions, and strongly disagreeing with the judgment. Lundbeck is considering an appeal to the European Court of Justice. The Commission's press release can be found here.

A further report on the second case discussed at this seminar, R (Roche Registration Ltd) v Secretary of State for Health, will be posted on this blog in due course.
Lundbeck v European Commission - a rotten decision or effective competition law enforcement? Lundbeck v European Commission -  a rotten decision or effective competition law enforcement? Reviewed by Eibhlin Vardy on Thursday, October 20, 2016 Rating: 5


  1. The analysis ignores the UK legal cases involving the crystallisation patent which were strongly pressed by Lundbeck and lost after long and expensive litigation and dubious "Expert Witnesses".
    The companies fined in the case avoided legal costs and were assured of entering the market.

    It is difficult to find a clearer case of paying to delay competition and and an analysis of the formulation market price during the period would show whether or not the market was rigged.

    The arguments on "Is the Commission adopting different standards in comparable contexts?" are also disingenuous. All large and some small generic companies will attempt to enter valuable formulation markets and to suggest that these companies did not launch without giving good reasons is speculative. Again an analysis of each of the generic companies strategy regarding this compound would show whether companies were paid off or attempted to launch circumventing the crystallisation and other weak patents. If this showed that some companies were delayed by litigation whilst other were delayed by being paid off after the expiry of the basic compound patent which is what the Commission did then a fine is justified.

    The seminar may have been run from the patent point of view but it might have been helpful if the technical and other litigation information had also been included which might put the judgement in a better perspective.

  2. You are quite correct that there is multitude of other information available in this long saga that wasn't covered in my post, and thank you for raising a handful of those points. For the record, the seminar wasn't particularly run from a patent perspective, although that was the focus of my report.

  3. [Merpel wonders whether these were really practical alternatives, given that the generic companies would have relied on Lundbeck's data to obtain marketing authorisation from the regulator].

    To put Merpel's mind at rest, the generics will still reference Lundbeck's data even with a different process/sold form. They will not have to provide anything more than usual.

  4. [There is no right under competition law to launch an infringing product, says Merpel!].

    A non-infringing product would not infringe, IMHO.

  5. Final point. If the generic's had no intention to launch or couldn't launch because of Lundbecks super patents, why did Lundbeck give these companies all this cash? Seems a bit unnecessary when you consider the facts and economics (as described by Merpel).


All comments must be moderated by a member of the IPKat team before they appear on the blog. Comments will not be allowed if the contravene the IPKat policy that readers' comments should not be obscene or defamatory; they should not consist of ad hominem attacks on members of the blog team or other comment-posters and they should make a constructive contribution to the discussion of the post on which they purport to comment.

It is also the IPKat policy that comments should not be made completely anonymously, and users should use a consistent name or pseudonym (which should not itself be defamatory or obscene, or that of another real person), either in the "identity" field, or at the beginning of the comment. Current practice is to, however, allow a limited number of comments that contravene this policy, provided that the comment has a high degree of relevance and the comment chain does not become too difficult to follow.

Learn more here:

Powered by Blogger.