A total fine of KRW 2.65 billion was imposed on affiliates such as the global headquarters
[Newsmp] Alovogen and AstraZeneca had agreed not to release a generic version on condition of exclusive distribution rights for original drugs in Korea, and the Fair Trade Commission (FTC, Chairman Han Ki-jeong) imposed a corrective order and a fine.
The FTC announced on the 13th that it had decided to slap a combined KRW 2.65 billion (provisional) fine on both companies.
AstraZeneca was promoting and outsourcing the promotion and distribution of three drugs, including Zoladex, Arimidex, and Casodex in May 2016, and recognized that Alovgen has been developing a generic version of Zoladex since 2014, according to the FTC.
At that time, Alvogen planned to release a generic version of Zoladex in 10 European countries, and AstraZeneca acknowledged it as a significant threat, the FTC explained.
This is because when generic products are released, the price of the original products is cut by half.
AstraZeneca regulated collusion to suspend Alvogen’s release and release of generic production in exchange for receiving exclusive distribution rights in Korea for Zoladex and others.
Alvogen was scheduled to release a generic version of Zoladex in the third quarter of 2019, but the FTC said that Alvogen has not released a generic product after faithfully fulfilling this contract.
However, the contract expiration date was until December 31, 2020, but it was destroyed on January 12, 2018, the commission added.
“This case (collusion) is to avoid an anticompetitive agreement that restricts Alovogen, a potential competitor, from entering the market,” the FTC said.
“The deal has not only cut off the possibility of lower drug costs, but it also hindered innovation in the pharmaceutical market by reducing incentives for research and development,” the FTC pointed out. “It has increased the medical cost burden on consumers and taken away their potential right to choose generics.”
Under the Korean Monopoly Regulation and Fair Trade Act, the FTC imposed a correction order and fine of KRW 1.49 billion on three Alvogen-related companies, Alvogen Lux Holdings Sarl, Lotus Pharmaceutical Co Ltd. (Alvogen’s subsidiary), and Alvogen Korea, and KRW 1.146 billion on AstraZeneca PLC and AstraZeneca Korea.
“This action is to detect and sanction collusion that prohibits the production and release of the generic version drugs under development and corrects collusion in the anticancer drug market such as prostate and breast cancer, which are directly related to people’s lives,” the FDC said. “It is significant that it was intended to alleviate the burden of medical costs and financial burden on health insurance and promote competition in the pharmaceutical market.”
“We made it clear that the agreement to block potential competitors from entering the market is also illegal through this issue and plan to continue monitoring collusion that directly causes damage to people’s lives,” the FDC concluded.
