In a decisive move, the European Union’s antitrust authority fined Teva Pharmaceutical Industries €463 million ($502 million) on Thursday for deploying a smear campaign against a competitor's multiple sclerosis drug. The European Commission accused Teva of exploiting patent protections and spreading false information to prevent the Dutch company Synthon from launching its rival treatment.

The EU’s investigation concluded that Teva “systematically spread misleading information” about Synthon's drug, extending its Copaxone monopoly across several European markets. By artificially prolonging patent protections, Teva successfully delayed competition, which drove up public health costs, according to the Commission. Only after Synthon’s product entered the market did prices drop by a striking 80%.

Misinformation Targeted Drug Pricing Authorities, Doctors

Margrethe Vestager, the EU’s executive vice-president in charge of competition, stated that Teva’s misinformation strategy targeted healthcare stakeholders like drug pricing organizations and doctors. The goal, Vestager said, was to erode trust in Synthon’s product by falsely questioning its safety, efficacy, and therapeutic equivalence.

“Teva sought to create doubts about its rival product,” Vestager said. “It spread information contradicted by health authorities’ findings, aiming to cast doubt on the safety, efficacy, and therapeutic equivalence of the competing drug.”

Teva Fined €463M : Teva Challenges EU Decision, Plans Appeal

In response, Teva voiced disappointment with the EU’s decision, which it described as "misguided." The company announced it would “vigorously defend” its actions in an appeal, calling the commission’s legal stance "extreme, untested, and factually unsupported."

The EU’s probe into Teva’s practices began in 2019 after inspections of Teva’s subsidiaries led the regulator to believe the company violated European antitrust laws by deliberately stalling Synthon’s entry into the glatiramer acetate market.

In October 2021, the European Commission formally alleged that Teva had maintained an unfair advantage in Belgium, Czechia, Germany, Italy, the Netherlands, Poland, and Spain by misusing divisional patents for Copaxone.

Patent Abuse Extended Copaxone Monopoly, EU Finds

The Commission’s investigation found Teva preserved its competitive edge through a tactic known as “the divisional game,” which involves the strategic use of divisional patents with the European Patent Office (EPO). These secondary patents, although similar to the original, spotlight different aspects, such as production techniques or dosing.

Vestager explained that Teva's actions “gamed the system” by filing and then selectively withdrawing divisional patents when revocation seemed imminent. This approach prevented generic manufacturers from gaining legal grounds to challenge the Copaxone patents in one unified case, extending Teva's monopoly over Copaxone across EU states.

“If one of these patents had been invalidated, it would have set off a domino effect that could impact all divisional patents,” Vestager noted, adding that this tactic forced generics into a perpetual cycle of new legal challenges and delayed competition by years.

Teva Fined €463M : Broader Concerns Over Patent Abuse in Pharmaceuticals

Teva’s monopolistic practices, which spanned nearly a decade, align with broader global concerns about patent abuse in the pharmaceutical industry. In 2022, pharmacies and other drug purchasers filed a class-action lawsuit against Teva in the U.S., accusing it of blocking generic competition and misinforming consumers. Teva previously lost an appeal against a €60 million EU fine over a conspiracy involving its subsidiary Cephalon, designed to keep a generic version of the sleep disorder drug Provigil off the market.

As patent-related controversies intensify, lawmakers in the U.S. have also raised concerns over whether similar tactics inflate prescription drug costs, creating a significant barrier for generic alternatives and impacting public health budgets.