European Commission imposes fines for “pay for delay” agreements

On 09 June 2014 the European Commission (“Commission”) imposed fines totaling an amount of EUR 427.7 Mio. on six pharmaceutical companies for being involved in anticompetitive agreements aiming the delayed market entry of generic medicine.

The French pharmaceutical company Servier S.A.S. (“Servier”), producer of the well-known cardiovascular medicine “Perindopril”, delayed the launch of cheaper generic drugs in several markets in exchange of substantial payments. Although Servier’s patent for the perindopril molecule expired in 2003, the access to the technology was extremely restrained. As a reaction Servier acquired in 2004 the most advanced technology at the time to “strengthen the defence mechanism” of the previous patent.

Between 2005 and 2007 Servier would settle with any generic company who would challenge Servier’s patents before courts. However, these settlements were used for agreements amounting to tens of millions of euros for Servier to keep its leading market position. In one of the negotiations Servier offered licenses for seven national markets in order to prevent the market entry of a generic drug in the rest of the European markets. Servier could not only assure its market position through these settlement agreements but also ensured that no legal challenges would follow.

Servier used legitimate tools in form of patents, technology transfers agreements and settlements in order to obstruct any possible competition and to initiate so-called “pay for delay” agreements.

However, one competitor had reached to obtain the annulment of Servier’s patent for the perindopril molecule in 2007. As a result, the market price dropped by 90 %. Nevertheless, Servier described it in internal documents the previous period still as “great success = 4 years won”.

Patients, European taxpayers and the national health systems have been directly affected by these agreements.


Dr. Christina Hummer
Ori Kahn