The European Commission announced today that it had opened an official investigation to assess whether Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) had illegally delayed the market entry and uptake of medicines that compete with its blockbuster multiple sclerosis drug Copaxone. The Commission will investigate whether Teva has abused a dominant market position in breach of EU antitrust rules.
Executive Vice-President Margrethe Vestager, in charge of EU competition policy, said: “Multiple sclerosis is a chronic illness affecting the daily lives of more than half a million Europeans requiring life-long treatment. Despite great efforts of the scientific community, humanity has not yet found a treatment for this disease, which remains incurable. It is therefore paramount to preserve healthy competition in the market for available drugs that aim at slowing down the disease and improving patients’ quality of life. It is also important that companies compete to innovate so that new and affordable treatments can emerge. Today, we have decided to launch an in-depth investigation into whether Teva may have abusively blocked or delayed the market entry of competitors to its blockbuster drug Copaxone, to the detriment of patients and health systems”.
The European Commission states that, in 2015, Teva’s basic patent covering an active pharmaceutical ingredient in Copaxone, glatiramer acetate, expired. The Commission will investigate whether, following the patent expiry, Teva may have artificially extended the market exclusivity of Copaxone by strategically filing and withdrawing divisional patents, repeatedly delaying entry of its generic competitor who was obliged to file a new legal challenge each time. Divisional patents originate from a broader “parent” patent and may cover significantly overlapping inventions, sometimes allowing the patentee to multiply the patent barriers that a generic competitor needs to overcome to enter the market.
In addition, the Commission states that it will also examine whether Teva may have pursued a communication campaign to unduly hinder the use of competing glatiramer acetate products. The Commission says that it has indications that Teva’s campaign, primarily directed at healthcare institutions and professionals, may have targeted competing products to create a false perception of health risks associated with their use, even following the approval of these medicines by competent public health authorities.
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If proven, Teva’s behavior may amount to an abuse of dominant position and infringe Article 102 of the Treaty on the Functioning of the European Union (TFEU) and Article 54 of the European Economic Area (EEA) Agreement.
This is the Commission’s first formal investigation into potential abuses relating to the misuse of patent procedures and exclusionary disparagement of competing products in the pharmaceutical industry.
Teva’s revenue and profits from Copaxone have declined in recent years as generic competition entered the market. For 2021, Teva forecasts that Copaxone will contribute $1.05 billion to its revenue, compared with $1.337 billion in 2020. Sales of Copaxone in Europe amounted to $400 million last year.
Teva said in response, “Teva believes that a strong intellectual property system is important in supporting the development of innovative drugs for patients. We do not believe that Teva adopted anti-competitive behavior in relation to Copaxone, and we are fully cooperating with the Commission.
“The opening of an official investigation is a procedural step, the significance of which is that the Commission can devote greater resources to examining the information and the documents gathered during the inquiry that began in October 2019 and in following information requests. It does not mean that an infringement has been established, and does not pre-determine the results of the investigation which is still continuing. Since this is a subject of continuing discussions, we will not provide further information or responses.”
Published by Globes, Israel business news – en.globes.co.il – on March 4, 2021
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