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EU fines pharmaceutical companies Teva and Cephalon €60m over alleged pay-for-delay deal

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EU competition commissioner, Margrethe Vestager
EU competition commissioner, Margrethe Vestager   -   Copyright  Credit: Virginia Mayo/AP
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Brussels has fined pharmaceutical companies Cephalon and Teva more than €60 million for allegedly colluding to keep a cheap alternative to a sleep disorder medicine off the market for their profit and at the expense of patients.

It comes after a long-running EU probe into anti-competitive practices between Israeli pharmaceutical firm Teva and its rival Cephalon, a company it now owns.

The European Commission said the firms agreed between themselves to delay for years the launch of Teva's cheaper version of Cephalon's blockbuster Modafinil. In return for the delay, Teva got beneficial side deals and some payments, it's claimed.

EU competition commissioner, Margrethe Vestager, said: “It is illegal if pharmaceutical companies agree to buy-off competition and keep cheaper medicines out of the market.

"Even when their agreements are in the form of patent settlements or other seemingly normal commercial transactions.

"Teva’s and Cephalon’s pay-for-delay agreement harmed patients and national health systems, depriving them of more affordable medicines."

Modafinil treats excessive daytime sleepiness and under the brand name Provigil it accounted for more than 40% of Cephalon's turnover. A cheap alternative would have had a serious impact on the company, and the EU argued that Cephalon enticed Teva in 2005 to stay out of its market. In 2011, Teva acquired Cephalon.

Teva responded to Euronews' request for comment with: "The Commission started investigating this agreement in December 2009. Now, nearly 10 years later, the Commission issued a decision considering that the agreement infringed competition law. We are currently reviewing the decision but we continue to believe the modafinil patent settlement agreement did not infringe EU competition law in relation to the principles laid out by the ECJ. We are planning to file an appeal before the General Court."