Brussels, 31 October 2024
The European Commission has fined Teva €462.6 million for abusing its dominant position to delay competition to its blockbuster medicine for the treatment of multiple sclerosis, Copaxone. The Commission found that Teva artificially extended the patent protection of Copaxone and systematically spread misleading information about a competing product to hinder its market entry and uptake.
The infringements
Teva is a global pharmaceutical company operating through several subsidiaries in the European Economic Area. Its blockbuster medicine, Copaxone, is widely used for the treatment of multiple sclerosis and contains the active pharmaceutical ingredient glatiramer acetate, over which Teva held a basic patent until 2015.
The Commission’s investigation found that Teva abused its dominant position in the markets for glatiramer acetate in Belgium, Czechia, Germany, Italy, the Netherlands, Poland and Spain.
Teva’s abusive conduct had the overall objective of delaying competition and artificially prolonging the exclusivity of Copaxone by hindering the market entry and uptake of competing, cheaper glatiramer acetate medicines. In particular, the Commission found that Teva:
- Misused patent procedures. When its patent protecting glatiramer acetate was about to expire, Teva artificially extended Copaxone’s patent protection by misusing the European Patent Office’s (“EPO”) rules and procedures on divisional patents. Divisional patents derive from an earlier ‘parent’ patent application and share similar content, but may focus on different aspects of the invention and are treated independently when it comes to assessing their validity. In this specific case, Teva filed multiple divisional patent applications in a staggered way, creating a web of secondary patents around Copaxone focusing on the manufacturing process and the dosing regimen of glatiramer acetate. Rivals challenged these patents to clear the way to the market. Pending review by the EPO, Teva started enforcing these patents against competitors to obtain interim injunctions. When the patents seemed likely to be revoked, Teva strategically withdrew them, to avoid a formal invalidity ruling, which would have set a precedent threating other divisional patents to fall like dominos. By doing so, Teva forced competitors to repeatedly start new lengthy legal challenges. This tactic allowed Teva to artificially prolong legal uncertainty over its patents and, potentially, hinder the entry of competing glatiramer acetate medicines. All Teva’s divisional patents have now been annulled.
- Implemented a systematic disparagement campaignagainst a competing glatiramer acetate medicine for the treatment of multiple sclerosis, by spreading misleading information about its safety, efficacy and therapeutic equivalence with Copaxone. Teva did so despite the relevant health authorities having approved the competing medicine and confirmed its safety, efficacy and therapeutic equivalence with Copaxone. Teva’s disparagement campaign targeted key stakeholders, including doctors and national decision-makers for pricing and reimbursement of medicines, with the objective of slowing down or blocking the entry of its rival product in several Member States.
Today’s decision concludes that Teva’s abuses 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’), which prohibits the abuse of a dominant position. This is the first time the Commission imposes a fine in relation to these two types of practices.
Teva’s conduct, which lasted between 4 and 9 years depending on the Member State, may have prevented list prices to decrease, with a negative impact on public health budgets. This is confirmed by the fact that, once the rival product entered the market, the list prices decreased by up to 80%, leading to significant savings for health systems.
Member State from start Date until end date:
- The Netherlands from 3 February 2015 until 31 December 2018
- Italy from 3 February 2015 until 31 December 2021
- Poland from 3 February 2015 until 31 December 2022
- Belgium from 3 February 2015 until 7 February 2024
- Czechia from 3 February 2015 until 7 February 2024
- Germany from 3 February 2015 until 7 February 2024
- Spain from 3 February 2015 until 7 February 2024
A statement by EU Commission Executive Vice-President Margrethe Vestager, in charge of competition policy, is available below.
Fine
The fine was set on the basis of the Commission’s 2006 Guidelines on fines (see press release and MEMO).
In setting the level of the fine, the Commission took into account the gravity and duration of the infringements as well as the value of Teva’s sales relating to the latter.
The Commission has concluded that the total amount of the fine of €462.6 million is proportionate and is necessary to achieve deterrence.
Background
Following unannounced inspections at the premises of several Teva subsidiaries in October 2019, the Commission opened proceedings in March 2021 against Teva Pharmaceutical Industries Limited and Teva Pharmaceuticals Europe BV. In October 2022, the Commission sent the parties a Statement of Objections.
This is the second Commission decision about disparagement campaigns. In July 2024, the Commission accepted commitments by Vifor addressing the Commission’s preliminary concerns that the pharmaceutical company could have engaged in a potentially anticompetitive disparagement campaign.
Article 102 of the TFEU prohibits the abuse of a dominant position that may affect trade within the EU and prevent or restrict competition. The implementation of this provision is defined in Regulation No 1/2003.
Fines imposed on companies found in breach of EU antitrust rules are paid into the general EU budget. These proceeds are not earmarked for particular expenses, but Member States’ contributions to the EU budget for the following year are reduced accordingly. The fines therefore help to finance the EU and reduce the burden for taxpayers.
In the decision, the Commission also relied on documents from Teva’s in-house lawyers who were involved in the design of its abusive strategy to protect Copaxone. In-house lawyer communications are not privileged under EU law.
Action for damages
Any person or company affected by anticompetitive behaviour as described in this case may bring the matter before the courts of the Member States and seek damages. The case law of the Court of Justice of the European Union and Council Regulation No 1/2003 both confirm that in cases before national courts, a Commission decision that has become final constitutes binding proof that the behaviour took place and was illegal. Even though the Commission has fined the company concerned, damages may be awarded by national courts without being reduced on account of the Commission fine.
The Antitrust Damages Directive makes it easier for victims of anticompetitive practices to obtain damages. More information on antitrust damages actions, including a practical guide on how to quantify antitrust harm, is available here.
Whistleblower tool
The Commission has set up by a tool to make it easier for individuals to alert it about anticompetitive behaviour while maintaining their anonymity. The tool protects whistleblowers’ anonymity through a specifically designed encrypted messaging system that allows two-way communications. The tool is accessible via this link.
More information
More information on this case will be available under the case number AT.40588 in the public case register on the Commission’s competition website, once confidentiality issues have been dealt with.
Quote
Today’s decision to impose an antitrust fine on Teva for disparagement and misuse of the patent system reaffirms the Commission’s commitment to competition enforcement in the pharmaceutical sector. With today’s decision, the Commission contributes to keeping drugs affordable, preserving choice of treatment and fostering innovation, to the benefit of EU patients and national healthcare systems.
Margrethe Vestager, Executive Vice-President in charge of competition policy
Source – EU Commission
Statement by Executive Vice-President Vestager on the adoption of an antitrust decision against Teva for practices involving the disparagement of a rival medicine and the misuse of the patent system
31 October 2024
Today’s decision to impose an antitrust fine on Teva for disparagement and misuse of the patent system reaffirms the Commission’s commitment to competition enforcement in the pharmaceutical sector. With today’s decision, the Commission contributes to keeping drugs affordable, preserving choice of treatment and fostering innovation, to the benefit of EU patients and national healthcare systems.
This is the second consecutive decision addressing allegations that a dominant company abusively disparaged a competing drug. In the present case, Teva devised a strategy to delay competition as the patent for its blockbuster multiple sclerosis drug Copaxone was due to expire. Copaxone’s active ingredient is called glatiramer acetate. As part of this strategy Teva launched a disparagement campaign against the only other glatiramer acetate medicine authorised in the EU, which is manufactured by Synthon. Teva sought to create doubts about its rival product. It spread information contradicted by health authorities’ findings, seeking to sow doubt on the safety, efficacy and therapeutic equivalence of the rival product. Its campaign targeted key stakeholders, such as doctors and organisations involved in drug pricing and reimbursement with the objective of slowing down or blocking its competitor’s entry in several Member States.
Last July, in another case, we investigated a similar tactic and accepted commitments by Viforto undo the effects of its potentially misleading communications on the safety of the closest competing medicine for intravenous iron treatment, marketed by Pharmacosmos. In that case, we preliminarily found that Vifor spread potentially misleading information to healthcare professionals about the safety of its closest and potentially only competing medicine in Europe. These messages may have unduly hindered the uptake of the competing product in Europe.
To address this issue, Vifor committed to launch a comprehensive communication campaign targeting nearly two hundred thousand European healthcare professionals. The aim is to rectify and undo the effects of its disparagement campaign. Vifor also committed not to communicate about Monofer’s safety unless the information is based on Monofer’s label or valid clinical trials. In addition, Vifor reached a commercial settlement to compensate Pharmacosmos for the potential harm arising from its conduct. The commitments aimed to quickly stop Vifor’s potential disparagement and prevent any possible long-term anticompetitive effects.
With these consecutive actions, we send a clear message to dominant pharmaceutical companies that we will not tolerate the use of disparagement campaigns to foreclose competing medicines.
Today’s decision also finds that Teva misused the patent systemtoartificially extend patent protection for Copaxone active ingredient. Patent rights are essential to incentivize innovation and play a crucial role in the competitive process. But we found that Teva disrupted the patent process and delayed a final decision on the validity of its patent claims. By doing so, Teva undermined the objectives of the patent system, which is to provide legal certainty and to protect genuine innovation.
To do so, it engaged in a tactic known as “divisionals game”. Divisional patents derive from an earlier “parent” patent application and share similar content. However they may focus on different aspects of the invention, and they are treated independently when it comes to assessing their validity. A divisional patent can in turn be a “parent” to other divisionals, leading to several generations of very similar patents. In view of the expiry of its main patent in 2015, Teva gamed this system by filing multiple divisional patents protecting dosage and manufacturing process with the European Patent Office in a staggered way. It then strategically withdrew these highly contested patents when they seemed likely to be revoked. The legal review of a patent’s validity is key for generic companies to enter such markets. By withdrawing its patents when they were challenged, Teva avoided having the European Patent Office rule that one of its patents was invalid. Such a ruling would have set a precedent threatening other divisional patents, which Teva kept enforcing, to fall like dominos. As a result of Teva’s withdrawal of contested patents, generic companies had to repeatedly start fresh challenges, prolonging the process. It took more than 9 years for all the divisional patents in question to be eventually annulled.
We found that Teva’s conduct contributed to maintaining Teva’s quasi-monopoly in several Member States years after the basic patent for Copaxone expired. This may have prevented significant savings for public health budgets, as a result of expected price decreases that could reach 80% in terms of list prices.
Teva will now have to pay a €462.6 million fine and must refrain from similar practices in the future. Antitrust intervention in the Vifor and Teva will lead to tangible and positive results for patients’ access to safe, effective, affordable and innovative medicines. Competition policy in this sector also complements the applicable regulatory framework.
Background
A press release is available online. More information on this case will be available under the case number AT.40588 in the public case register on the Commission’s competition website, once confidentiality issues have been dealt with.
Source – EU Commission