EC crackdown on antitrust behaviour with new pharma raids

The European Commission has confirmed that is has started surprise inspections at the offices of various pharmaceutical companies suspected of anti-competitive behaviour across the European Union.

Officials said they “have reason to believe” that these companies, which have not been identified by the Commission, are abusing their dominant positions in the marketplace by illegally delaying the launch of generic competitors, although in a statement it was stressed that the raids do not automatically mean the firms are guilty.

The companies are suspected of forming backhand deals with the makers of cheaper copycat versions of their branded medicines to keep them off the market, a practice which is thought could cost healthcare systems in Europe billions of euros.

The EC’s report into anticompetitive behaviour in the pharmaceutical industry published earlier this year said at least 200 settlement agreements between generic and originator companies were known, and that “a good number” of these were formed to restrict generic entry onto the market.

According to the report, between 2000 - 2007 customers in the European Union member states waited more than seven months following patent expiry for the launch of cheaper copycat versions of branded medicines “costing them an absolute minimum of 3 billion euros or 20% in extra spending”, highlighting the magnitude of such activities.

Just a few days ago Neelie Kroes, the European Commissioner for Competition Policy, stressed during an address to the European Parliament’s committee on economic and monetary affairs that the Commission is “now capitalising on our pharmaceutical sector inquiry with new cases", and warned of new antitrust investigations in the coming months.

Although the companies involved in the current crackdown have not been formally identified, media reports claim that Sanofi-Aventis and Novartis unit Sandoz have had house calls. In addition, Teva Pharmaceutical Industries said its Paris offices had been visited “as part of a broader probe into uncompetitive practices within the French generic industry”, reports Reuters. European heavyweights GlaxoSmithKline and AstraZeneca are not thought to be involved at this stage.