EU Accuses Drugmakers of Violating Antitrust Laws

Regulators from the European Commission have accused health care giants Johnson & Johnson (NYSE: JNJ  ) and Novartis (NYSE: NVS  ) of delaying the release of a cheaper generic version of painkiller drug fentanyl in the Netherlands. An intentional delay could violate EU antitrust regulations, according to a European Commission press release on the accusations.

According to the Commission's allegations, Novartis' generic-drug making business Sandoz agreed in 2005 to delay launching generic fentanyl in exchange for monthly payments from J&J's Janssen-Cilag subsidiary -- which already provided fentanyl to the Netherlands -- as long as no generic was on the market.

Sandoz subsequently held off from entering the Netherlands market until December 2006, according to the Commission.

The Commission's vice president of competition policy, Joaquín Almunia, elaborated in the press release, saying, "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 pain killer. The Commission is determined to fight undue delays in the market entry of generic medicines so that European citizens have access to affordable health care."

Novartis and Sandoz issued a statement saying, in part, that they "operate to the highest of standards and take the position of the Commission seriously." A Janssen spokesperson was quoted in the media as saying Janssen believes the arrangements were legitimate.


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