Lundbeck v. Commission

Lundbeck (defendant) manufactured a best-selling antidepressant drug, sold as Celexa and Cipramil. Lundbeck held patents covering the drug molecule and manufacturing process. As the patent expiration dates approached in 2002, several companies were preparing to enter the market with generic versions of Lundbeck’s drug. Lundbeck sued them for patent infringement, and the parties settled. Under the terms of the settlement, Lundbeck agreed to buy the generic companies’ current stores of their generic drugs and offered them guaranteed profit payments via a distribution agreement. In exchange, the generic manufacturers agreed not to enter the market with their versions of the drug. In June 2013, the European Commission (the commission) (plaintiff) ruled that the settlements violated Article 101 of the Treaty on the Functioning of the European Union (TFEU) and fined Lundbeck and the generic companies. The commission found that the settlement terms were anticompetitive because the parties were potential competitors, the generic companies agreed to limit their own efforts to enter the generic drug market, and they were compensated to do so by Lundbeck via a reverse-payment settlement, which reduced their incentive to compete. The commission declared this conduct anticompetitive by object, meaning presumptively anticompetitive, a finding that eliminated the need to examine the actual anticompetitive effects of the agreements. Lundbeck appealed.