EC cracks down on market manipulation with Euros 13.4m fines
The European Commission has signalled its intention to crack down on market manipulation by fining five pharmaceutical companies Euros 13.4 million ($14.1 million) in a settlement of an antitrust investigation.
The Commission action confirms its stated commitment to a fair, competitive market landscape that prioritises consumer interests and accessibility to affordable healthcare.
As a result of the investigation – which saw one of the companies act as a whistle-blower - the Commission fined Alkaloids of Australia, Alkaloids Corporation, Boehringer, Linnea and Transo-Pharm for participating in a cartel aimed at fixing the minimum price of an ingredient to produce the abdominal antispasmodic drug Buscopan and its generic versions.
While these penalties are substantial, the broader impacts of this ruling are far more significant and companies have now been warned that the EC will take action and impose substantial fines.
The ruling revolved around price-fixing practices over a 14 year period during which the corporations allegedly swapped sensitive business data and collectively decided on a minimum selling rate for the drug Butylscopolamine, a medication primarily used to treat pain and discomfort caused by abdominal cramps.
The Commission’s investigation unveiled a network that covertly manipulated the pharmaceutical market to the detriment of both competition and consumers,, contravening EU antitrust rules.
C2 Pharma was spared from financial penalties due to its role as the whistle-blower in this conspiracy while Transo-Pharm and Linnea saw their fines reduced in light of their cooperation with the investigation.
Directors and officers could face litigation from shareholders who are disgruntled at the company receiving a significant fine, with allegations of wrongful acts likely to lead to substantial legal defence costs and potentially expensive damages awards.
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