European Commission launches anticompetition probe
The European Commission has launched a large-scale inquiry into alleged anticompetitive practices in the EU pharmaceutical industry.
The European Commission has launched a large-scale inquiry into alleged anticompetitive practices in the EU pharmaceutical industry.
The Commission is carrying out inspections on the premises of a certain number of companies specialising in innovative and generic products.
Competition Commissioner Neelie Kroes has declined to give the identity of the companies concerned, or even the number of companies involved. However, he emphasised that this was not an inquiry specific to some companies, as is the case for certain cases of price fixing, but that it was a general inquiry into the entire pharmaceutical sector.
Several pharma companies have let it be known that they had been inspected, including AstraZeneca, Sanofi-Aventis, Pfizer and GlaxoSmithKline. Sandoz, the generic arm of Novartis, also acknowledged it had been inspected by the EU.
According to the Commission, there are indications that competition may not be fully playing its role on the European pharmaceutical markets. "Fewer new pharmaceuticals are being brought to market, and the entry of generic pharmaceuticals sometimes seems to be delayed," said the European competition services.
The inquiry will seek to determine whether the companies have created artificial obstacles to the entry of products onto the market, by using patent rights abusively, through contentious practices or by other means. In particular the Commission is seeking to find out if the increasingly small number of innovative medicines entering onto the market is linked to things not working properly in the sector.
An interim report is envisaged for autumn 2008 and the definitive results of the inquiry are expected in spring 2009.
The European Generic Medicines Association (EGMA), which represents EU generic producers, has said it hopes visits by European Commission officials on EU pharma offices investigating alleged anticompetitive behaviour will bring an end to what it believes is a chronic problem, especially vexatious litigation.
Greg Perry, EGMA director general, hoped the focus of the inquiry by the European Commission would be the "artificial barriers to entry to generic medicines" and "vexatious litigation" that he said might infringe the European treaty. He warned there was a serious risk of anticompetitive behaviour increasing substantially and it should be stopped as quickly as possible.
Perry said "vexatious" patent challenges were becoming a major problem in Europe, and described the current position as a 'mess' that needed "clearing up quickly". But while the generics market had opened up because of patent expiries, he said, generics companies were currently operating in "the best of times and the worst of times".
Generic companies themselves were also facing major price reductions as well as intense competition within the sector.
Meanwhile the European pharma industry body, EFPIA, has pledged an "in-depth" response to the Commission's investigation.
"Further to the invitation made by the European Commissioner for Competition Neelie Kroes to any interested parties to send in their views, EFPIA will provide an in-depth analysis about the way competition works in the pharmaceutical sector," the Federation said. This will include elements on "the key role of patents in driving research and "the key role of patents in driving research and innovation".