(Image: Korea Bizwire)
SEOUL, Oct. 13 (Korea Bizwire) — South Korea’s antitrust watchdog said Thursday it has decided to slap a combined 2.6 billion-won (US$1.82 million) fine on global pharmaceutical firm AstraZeneca and local generic maker Alvogen on charges of forging a shady deal to avoid competition.
Alvogen suspended its plan to release a generic version of Zoladex, a treatment for prostate and breast cancer initially developed by AstraZeneca, in return for gaining exclusive rights to sell three types of products made by the British-Swedish drugmaker here.
“We have detected and regulated collusion, in which the parties agreed to ban the production and release of a generic under development,” the Fair Trade Commission (FTC) said in a statement.
Generic drugs are produced with identical substances to the original product and have the same effect on patients. They are manufactured when the patent of the original expires.
According to the FTC, AstraZeneca approached Alvogen after being aware that the South Korean player has been developing a generic version of Zoladex since 2014, considering the move a “significant threat” to its business.
The FTC said the two companies forged the deal in September 2016. While the agreement was intended to run through the end of 2020, the two parties suspended the deal in January 2018.
Alvogen has not yet released the generic version of Zoladex.
“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 added.
“It has increased the medical cost burden on consumers and taken away their potential right to choose generics.”
The FTC said it has made a preliminary decision to impose a 1.1 billion-won fine on AstraZeneca and a 1.5 billion-won one on Alvogen.
(Yonhap)
