Unichem Laboratories Ltd has received a formal demand notice from the European Commission for a financial penalty amounting to €19.5 million, following a long-standing antitrust investigation into alleged market manipulation practices. The notice, issued on September 18, 2025, marks a significant escalation in the Commission’s crackdown on pharmaceutical companies accused of delaying the entry of generic drugs into the European market.
The fine stems from Unichem’s involvement in a series of patent settlement agreements concerning the blood pressure drug Perindopril, originally developed by French pharmaceutical firm Servier. The Commission alleges that these agreements were designed to restrict competition and maintain artificially high prices for the branded drug across Europe.
Key Highlights From The Enforcement Action
- Unichem Laboratories receives a demand notice for €19.5 million from the European Commission
- The penalty relates to anticompetitive conduct involving delayed entry of generic Perindopril
- The case is part of a broader €427.7 million fine imposed on multiple pharmaceutical firms
- Other companies named include Lupin, Mylan, Teva, Krka, and Servier
- Unichem had previously appealed a related ruling but lost the case in June 2024
Background Of The Antitrust Case
The European Commission’s investigation began in 2009 and focused on whether Servier and several generic manufacturers entered into patent settlement deals that effectively blocked cheaper versions of Perindopril from reaching consumers. These deals allegedly included payments and licensing arrangements that discouraged competition, violating EU antitrust laws.
Unichem Laboratories was one of the generic firms accused of participating in these arrangements. The Commission concluded that such conduct delayed market access for generic Perindopril, resulting in higher healthcare costs and reduced consumer choice across member states.
Legal Proceedings And Appeal Outcome
Unichem had previously challenged the Commission’s findings in the General Court of the European Union, arguing that its agreements were lawful and commercially justified. However, the appeal was dismissed in June 2024, with the court upholding the Commission’s decision and reinforcing the principle that patent settlements must not be used to circumvent competition laws.
The current demand notice formalizes the penalty and initiates the payment process. Unichem is expected to comply within the stipulated timeframe or face additional enforcement measures.
Financial And Reputational Impact
The €19.5 million fine represents a substantial financial liability for Unichem Laboratories, which has a significant presence in both domestic and international markets. While the company maintains a healthy balance sheet, the penalty may impact its short-term cash flow and investor sentiment.
Unichem’s stock (UNLB.NS) showed mild volatility following the announcement, with analysts anticipating further movement depending on the company’s response and any potential disclosures in upcoming earnings reports.
Reputationally, the case underscores the risks associated with aggressive patent strategies and highlights the importance of compliance with global competition norms. Unichem may need to reinforce its internal legal and regulatory frameworks to prevent future infractions.
Industry Implications And Regulatory Trends
The European Commission’s action is part of a broader trend of increased scrutiny over pharmaceutical pricing and patent practices. Regulators across Europe and North America are tightening oversight of settlement agreements, especially those involving blockbuster drugs and high-cost therapies.
This case sends a clear message to the industry: patent protection must not come at the expense of market competition. Companies are being urged to adopt transparent licensing models and avoid exclusivity arrangements that hinder access to affordable medicines.
Next Steps For Unichem Laboratories
Unichem is expected to issue a formal statement addressing the demand notice and outlining its compliance plan. The company may also explore options for staggered payment or seek clarification on the calculation of the fine.
Internally, Unichem is likely to review its legal risk exposure and reassess its approach to international partnerships and licensing agreements. The outcome of this case may influence its strategic decisions in the European market going forward.
Sources: Reuters, Economic Times, Dalal Street Investment Journal
