European Union Investigates Pharmaceutical Company Practices Regarding Generic Drugs, Competition

Main Category: Pharma Industry / Biotech Industry
Article Date: 18 Jan 2008 - 5:00 PDT

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The European Union on Wednesday raided pharmaceutical companies in several countries as part of an investigation into potential efforts by drug makers to prevent generic or competing drugs from reaching markets, the Wall Street Journal reports (Forelle/Whalen, Wall Street Journal, 1/17).

Officials from AstraZeneca, GlaxoSmithKline, Johnson & Johnson, Merck, Pfizer, Sandoz, Sanofi-Aventis and Wyeth confirmed that they were contacted by regulators and said they are cooperating with the investigations. Neelie Kroes, the European competition commissioner, said the European Union was working closely with U.S. officials, adding, "We're not the only one active in this."

According to the commission, "Fewer new pharmaceuticals are being brought to the market and the entry of generic pharmaceuticals sometimes seems to be delayed. ... If innovative products are not being produced, and cheaper generic alternatives to existing products are in some cases being delayed, then we need to find out why and, if necessary, take action." From 2000 to 2004, 28 types of new drugs were launched, compared to 40 between 1995 and 1999, according to Kroes (Baltimore Sun, 1/17). In addition, Kroes said, "The pharmaceutical markets are not working as well as they might" (Wall Street Journal, 1/17).

E.U. officials said, "The commission wants to investigate the reasons for this, and, in particular, whether any agreements restricting competition or unilateral abuses of dominant positions are connected to it" (White, AP/Philadelphia Inquirer, 1/17). Officials say they are concerned some firms are "misusing" patent laws to block other firms from releasing new drugs. Suspected methods of misuse include the submission of "overbroad" patent filings or "specious" lawsuits, according to the Journal. Drug makers are also suspected of making agreements to not enter each other's markets, or accepting payments to not launch competing drugs (Wall Street Journal, 1/17).

Regulators also will look at agreements between drug makers -- such as settlements in patent disputes -- that could violate E.U. rules prohibiting cartels (AP/Philadelphia Inquirer, 1/17). The commission will release an interim report on the inquiry this fall, and a final version is expected in spring 2009 (Wall Street Journal, 1/17).

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