The European Commission has fined Teva €462.6 Million for abusing the patent system and disparaging a competing pharmaceutical
On 31 October the European Commission (the “Commission”) fined the global pharmaceutical company Teva €462.6 million for abusing its dominant position by delaying competition for its multiple schlerosis (MS) blockbuster medicine, Copaxone. According to the Commission, Teva both artificially extended its patent protection of Copaxone and disparaged a competing pharmaceutical by disseminating misleading information in order to hinder its market entry and uptake.
Background
Teva’s pharmaceutical, Copaxone, contains the active ingredient glatiramer acetate. Teva held a basic patent for the active ingredient until 2015. Teva engaged in practises that led the Commission to conduct unannounced inspections, so-called dawn raids, at the premises of Teva subsidiaries within the EU in October 2019. In March 2021, the Commission opened formal investigations into Teva’s conduct. The Commission noted in its press release that in its decision, it partly relied on documents from Teva’s in-house lawyers who were involved in the design of its abusive strategy to protect Copaxone. Unlike communication with outside counsel, in-house lawyer communications are not privileged under EU law.
Teva’s misuse of the patent procedures
The Commission found that Teva had misused the patent procedures by filing multiple decisional patent applications in a staggered way, which created a web of secondary patents focusing on the manufacturing process and the dosing regimen of glatiramer acetate.
Competitors challenged these patents, but pending review by the European Patent Office (the “EPO”), Teva started enforcing the patents against competitors to obtain interim injunctions. If the patents seemed likely to be revoked, Teva withdrew them, to avoid a formal invalidity ruling, which according to the Commission would have set a precedent threating other divisional patents to fall like dominos. Teva thereby forced competitors to repeatedly start new legal challenges. The Commission found that Teva consequently artificially prolonged legal uncertainty over its patents and, potentially, hindered the entry of competing glatiramer acetate medicines.
Disparagement of a competing pharmaceutical
The Commission also found that Teva had implemented a systematic disparagement campaign against a competing pharmaceutical for the treatment of MS, by spreading misleading information about the pharmaceutical as regards its safety, efficacy, and therapeutic equivalence. Teva took these actions despite that health authorities in the EU Member States had approved the competing pharmaceutical and thereby confirmed its safety, efficacy, and therapeutic equivalence with Copaxone. Teva’s disparagement campaign targeted doctors and national decision makers for pricing and reimbursement of pharmaceuticals and had the aim to slow down or block the entry of the competing pharmaceuticals in several Member States.
Fines
The Commission found that Teva had abused its dominant position in the markets for glatiramer acetate in Belgium, Czechia, Germany, Italy, the Netherlands, Poland and Spain. The Commission held that Teva’s actions, which lasted between four and nine years depending on the Member State, aimed at delaying competition, and artificially prolonging the exclusivity of Copaxone by hindering the market entry and uptake of cheaper alternatives. The Commission’s decision concluded that Teva’s actions were complementary and together amounted to a single and continuous infringement of Article 102 of the Treaty on the Functioning of the European Union (“TFEU”). The fines amount in total to €462.6 million. Teva has publicly expressed its intention to challenge the decision.
Concluding remarks
This decision is one of many against pharmaceutical companies the last few years, where the Commission has issued infringement decisions for several different practices, including so-called pay-for-delay agreements (compensation from an originator company to generic companies in patent settlements, delaying generic entry after patent expiry), a pricing cartel, a commitment decision regarding excessive prices etc. Disparagement was also recently on the Commission’s radar, cf. the recent commitment decision in relation to the pharmaceutical company Vifor for disparagement against a competitor. Thus, the pharmaceutical sector is very much on the Commission’s radar, and it is more important than ever for pharmaceutical companies to ensure compliance.