The European Commission has fined Alkaloids of Australia, Alkaloids Corporation, Boehringer, Linnea and Transo-Pharm a total of €13,4 million for participating in a cartel concerning an important pharmaceutical ingredient. C2 PHARMA was not fined as it revealed the cartel to the Commission under the leniency program. All six companies admitted their involvement in the cartel and agreed to settle the case. 

The product concerned by the cartel is N-Butylbromide Scopolamine/ Hyoscine (‘SNBB’). SNBB is an important input material to produce the abdominal antispasmodic drug Buscopan and its generic versions.

The Commission’s investigation revealed that the six companies coordinated and agreed to fix the minimum sales price of SNBB to customers (i.e., distributors and generic drug manufacturers) and to allocate quotas. In addition, the companies exchanged commercially sensitive information. 

The Commission’s investigation revealed the existence of a single and continuous infringement in the European Economic Area (‘EEA’), spanning from 1 November 2005 to 17 September 2019. The participants were either producers or distributors of SNBB.

This was the first time that the Commission sanctions a cartel in the pharmaceutical sector and in relation to an active pharmaceutical ingredient. The Commission cooperated and coordinated certain investigative activities with the Swiss and Australian competition authorities.

In the context of its investigation, the Commission opened proceedings against a seventh company, Alchem, which decided not to settle. Alchem is not covered by the settlement decision and therefore the investigation will continue under the standard (non-settlement) cartel procedure for this company.

The Commissioner in charge of competition policy stated on October 18, 2023, “Today we impose a fine on companies for illegally coordinating prices and allocating quotas for an active pharmaceutical ingredient used to produce widely prescribed drugs. This is our first cartel decision in such an important sector, where competition is essential to provide access to affordable medicines.”

The Commission’s leniency program gives companies the opportunity to disclose their participation in a cartel and cooperate with the Commission during an investigation. A successful leniency applicant will either completely avoid a potentially high fine or receive a substantial reduction from it.

Three companies cooperated with the Commission under the leniency program:

  • C2 PHARMA received full immunity for revealing the cartel avoiding a fine of around €807 000;
  • Transo-Pharm and Linnea benefited from a reduction of their fines for their cooperation with the Commission’s investigation. The reductions reflect the timing of their cooperation and the extent to which the evidence they provided helped the Commission prove the existence of the cartel in which they were involved.

Source

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