October 23, 2023

EU reaches first-ever settlement with pharmaceutical cartel

On October 19, 2023, the European Commission announced that it reached a €13.4 million antitrust cartel settlement with six pharmaceutical companies – Alkaloids of Australia, Alkaloids Corporation, Boehringer, Linnea, Transo-Pharm and C2 PHARMA – for anticompetitive behaviour in respect of N-Butylbromide Scopolamine/Hyoscine (“SNBB”), the active ingredient in abdominal antispasmodic drug Buscopan.  The Commission reports that this is the first time that the Commission has sanctioned a cartel in the pharmaceutical sector and imposed fines in connection with an active pharmaceutical ingredient.  The settlement was reached after a Commission investigation revealed that the companies engaged in a coordinated effort to fix the minimum sales price of SNBB and allocate quotas.  The investigation also revealed that the cartel participants, who were either producers or distributors of SNBB, exchanged commercially sensitive information as part of a “single and continuous infringement” that occurred in the European Economic Area (“EEA”) from November 1, 2005 to September 17, 2019.  According to the Commission, its investigation also uncovered a seventh company, Alchem, that may have had a role in the SNBB cartel.  However, because Alchem is not a party to this settlement, the Commission’s investigation concerning the company will continue.

The Commission considered several factors when determining the fine amounts for each company, including the value of SNBB sales related to the infringement, the nature of the infringement, and the geographic scope and duration of the infringement.  In accordance with the Commission’s 2008 Settlement Notice, the companies also received a 10 percent reduction in their fines for acknowledging their participation in the cartel and their liability for the infringement.  In addition, three companies – C2 PHARMA, Transo-Pharm and Linnea – participated in the Commission’s leniency program and received reduced fines as a result.  C2 PHARMA, in particular, received immunity for revealing the cartel to the Commission, enabling the company to avoid a fine of approximately €807,000.

European Commission Press Release