Lupin, Matrix face antitrust probe in EU

The bad times that the Indian pharmaceutical industry has been facing overseas are about to turn worse. Lupin Ltd, Matrix Laboratories and Niche Generics, the UK subsidiary of Unichem Laboratories, may face antitrust investigations by the European Union for delaying the entry into the market of generic versions of a hypertension drug.

The European Union’s antitrust regulator, the European Commission, today said the three Indian companies, along with France’s Les Laboratories Servier, Israel-based Teva Laboratories and Krka Group, had entered into agreements to delay the entry of generic versions of Perindopril, on which Laboratories Servier had the patent.

The market in Europe for Perindopril is worth $400 million.

Lupin’s share prices fell 3.11 per cent on the Bombay stock exchange today and Unichem’s 2.70 per cent as the benchmark index, the Sensex, shed 2.8 per cent.

The drug regulators in the US and Europe have in recent times raised question marks over the practices followed by some big Indian drug makers.

The European Commission had started these investigations 18 months ago, following complaints that non-branded drugs were slow coming into the market because generic drug makers were teaming with patent holding companies to delay launches. In this connection, the Commission raided facilities of many drug makers, including GlaxoSmithkline (GSK) and Sanofi Aventis.

The Commission said it would continue to probe whether use of patents to delay generics violated antitrust rules, as companies used a variety of techniques to delay introduction of generics.

If the charges are proved, the companies may face a fine of up to 10 per cent of their revenues in Europe.

In April 2007, Lupin sold the patent rights and other related intellectual property for a generic version of perindopril to Laboratories Servier for Rs 115.31 crore (¤20 million).

A statement from Lupin said it was assisting the European Commission with its investigation. “We are in the midst of launching Perindopril in several EU markets. Lupin has also additionally challenged the validity of Servier’s alpha polymorph perindopril patent in the UK and with the European Patent Office. This will help us enter the market when the patent on the drug expires. Separately, Servier was also interested in three Perindopril patent applications that Lupin had filed,” said a spokesperson.

He said the investigation was still at an early stage and the Commission had confirmed that the publication of its statement did not imply it had proof of infringement of the competition rules.

PA Modi, chairman and managing director of Unichem Laboratories, said Niche Generics did not violate anti-trust rules. Unichem acquired 60 per cent of Niche Generics in 2002 and the rest three years ago. “Niche’s marketing application did not infringe the patent rights of Perindopril,” he told Business Standard.

Niche Generics had an understanding with Matrix Laboratories, now owned by US-based Mylan Laboratories, to market a finished generic version of Perindopril in Europe manufactured by Matrix. However, the two companies entered into an agreement with Elsiever in 2005 and decided not to pursue the product.