Drugmaker Mylan will appeal the European Commision’s recent anti-trust findings and fine imposed on its subsidiary, the erstwhile Matrix Laboratories.

“The decision relates to a settlement agreement entered into by Matrix with Les Laboratoires Servier in 2005 regarding the product perindopril, approximately two years before Mylan acquired its interest in Matrix. Matrix and Mylan disagree with the decision and continue to believe that the settlement agreement was legal, and we will be submitting an appeal of the decision to the General Court of the European Union,” Mylan said.

The EC has imposed a fine of €17.16 million (€ 17 161 140 or Rs 140 crore) on Matrix/Mylan.

Earlier this week, the European Commission (EC) had imposed a fine on five companies, including Indian drugmakers Lupin and Unichem subsidiary Niche, alleging that these companies had entered into deals with France’s Servier on its blood pressure drug perindopril, resulting in the delayed launch of their lower priced generic versions of the same drug in the market. Lupin had been fined €40 million and Unichem about €14 million.

More appeals

Lupin and Unichem had denied the findings and said they would appeal the EC findings. Explaining its situation, Unichem said the EC’s decision referred to Niche’s settlement on a “financially crippling patent litigation” with Servier in early 2005.

Unichem took complete ownership of Niche in 2006, and so was not involved with the decision to settle, it said, adding nevertheless, that it would appeal the decision.

Incidentally, about the same time last year, Ranbaxy was one of nine companies slapped with a fine by the EC for delaying the launch of its low-priced generic version of depression drug citalopram made by Danish company Lundbeck.

For the settlement forged with Lundbeck in 2002, Ranbaxy was slapped with a fine of about Rs 80 crore last year — a decision company top-brass had said they would appeal.

Pay to delay

In fact, even in the US, settlements between innovator companies and generic drug companies are closely watched, precisely for the same reason — that they could delay the entry of cheaper drugs in the market, leaving consumers with no choice but to buy a high priced drug.

Settlements happen for various reasons, explain industry insiders. Innovative companies sometimes settle with a generic, as the latter could have a strong case in marketing a less expensive version of the innovative drug (and this could erode the innovative drug’s marketshare.)

And since litigation is expensive, generic drug companies sometimes enter into settlements agreeing to delay a launch, as a survival strategy to prevent a hole in its pocket. Some settlement deals could also throw in other sourcing opportunities for the generic drugmaker. They could provide the drug ingredients or even manufacture the drug for the innovator, after the patent exclusivity on the innovator drug has lapsed, say experts, explaining why settlements are closely watched by authorities for anti-competitive practices that could go against consumers.