On Dec. 10, 2013, the European Commission announced fines of €10.8 million ($14.7 million) imposed on Johnson & Johnson (J&J) and €5.5 million ($7.5 million) on Novartis for colluding to postpone the entry of a generic version of fentanyl (a drug used to provide pain relief) into the Dutch market. Postponed entry was achieved through a so-called “co-promotion agreement” between the Janssen-Cilag (J-C), the Dutch subsidiary of J&J, and Sandoz, the Dutch subsidiary of Novartis.
Under this arrangement, Sandoz delayed a generic launch in exchange for financial incentives from J-C. These inducements exceeded the profits Sandoz predicted it could make from selling the generic version of the drug. The agreement began in July 2005 and lasted for around 17 months until December 2006, at which point it was terminated due to the imminent launch of a generic version by a third party. The Commission opened the investigation on its own initiative in October 2011, and found that the agreement kept the price of fentanyl in the Netherlands needlessly high, resulting in unnecessary costs to the Dutch healthcare system, patients and taxpayers.
This decision forms part of a wider series of actions by the Commission with respect to “reverse payments” by which branded manufacturers and generic manufacturers of pharmaceuticals settle patent disputes.