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EU regulator likely to fine J&J, Novartis next month: sources

By Foo Yun Chee

BRUSSELS (Reuters) - EU antitrust regulators are set to fine Johnson & Johnson and Novartis next month as part of a crackdown against deals delaying the sale of cheaper generic medicines, two people familiar with the matter said on Friday.

The sanction, the second against so-called pay-for-delay deals after fines against Lundbeck and eight others in June, underlines the European Commission's determination to challenge a practice common in the pharmaceutical industry.

In pay-for-delay agreements, brand-name firms pay generic companies not to market rival versions of their medicine which usually cost a fraction of the original drug, though the issue is complicated by patent ownership.

Antitrust regulators on both sides of the Atlantic have in recent years criticized the practice for inflating consumers' bills and pushing up public healthcare costs.

"The European Commission is likely to issue a decision next month," one of the people said.

In its charge sheet sent to the companies in January, the European Union competition watchdog said the pay-for-delay deal against the generic versions of fentanyl hurt Dutch consumers and healthcare providers.

Commission spokesman for competition policy, Antoine Colombani, and Novartis declined to comment. Johnson & Johnson was not immediately available for comment.

Novartis shares fell by 1.7 percent after the Reuters report and closed 0.2 percent down at 72.20 versus a flat European healthcare sector.

The Commission has two other pay-for-delay cases in the pipeline involving Israel's Teva and its subsidiary Cephalon, and French drugmaker Servier.

(Reporting by Foo Yun Chee; additional reporting by Caroline Copley in Zurich and Caroline Humer in New York City, editing by Robert-Jan Bartunek and Elaine Hardcastle)

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