09/07/2009

Pharmaceutical companies facing anti-trust probe

Source: European Voice

On 8 July 2009 the European Commission opened an anti-trust investigation into six pharmaceutical companies and indicated that further action could follow, after an inquiry into the industry found evidence of anti-competitive practices.

The six companies are: Les Laboratoires Servier, a French company that manufacturers new drugs, Krka d.d., Lupin Limited, Matrix Laboratories Limited, Niche Generics Limited and Teva UK Limited (all five making generic copies). The Commission suspects that Servier and the generic companies of reaching deals that hinder generic copies of a heart medicine developed by Servier getting onto the market.

The Commission stressed that the investigation has not proved that the companies have broken the rules and that it is also looking at other companies, including the international giant GSK.
The announcement came at the end of an 18-month inquiry into competition in the pharmaceutical industry, launched in January 2008 with a number of dawn raids on some of Europe's biggest drug companies.
In the final report, published on 8 July 2009 the Commission concluded that market entry of generic drugs has been delayed as a result of company practices.

Consumers had to wait seven months after patents had expired until cheaper generic medicines came onto the market, according to a sample of medicines that the Commission studied in 17 Member States. Consumers and taxpayers could have saved €3 billion between 2000 and 2007 if the medicines had come onto the market immediately.

However, the Commission also said that shortcomings in the regulatory regime could not be excluded as part of the cause for delays.

The commission said that the inquiry showed the need for a single community patent and patent litigation system. The European Federation of Pharmaceutical Industries and Associations (EFPIA), which represents originator companies, insisted that the Commission had failed to substantiate earlier allegations that patenting strategies dampened innovation and delayed generics illegally.

All parts of the industry welcomed moves to speed up the creation of a community patent system, a goal that the EU has struggled with for more than 20 years.

Suzanne Rab, a lawyer at Hogan and Hartson who represented an originator company in the sector inquiry, said that the Commission's approach suggested it would pursue individual infringement cases, rather than draw up guidelines on competition law. She argued that “a consolidated statement of the legal framework” would be preferable to letting the law “develop ad hoc”.

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