The public consultation which followed the European Commission’s inquiry into alleged anti-competitive practices within the pharmaceutical sector has received more than 40 submissions and these will be made public shortly, Commission officials have confirmed.

The consultation has now closed, and the submissions will be posted on the Competition Directorate-General’s website within the next few weeks, Commission spokesman Jonathan Todd said last week. “The comments received will be taken into account when the Commission draws up its definitive report on the pharmaceutical sector inquiry which will be published before the summer," he added.

In January 2008, the Commission began an investigation into why fewer new medicines appear to be coming to market in the European Union (EU), and why the launch of generics sometimes seems to be delayed. The probe began with a series of unprecedented and unannounced dawn raids on the offices of a large number brand-name and generic drugmakers across the EU by investigators from the Commission and the European Patent Office (EPO), under the direction of the European Commissioner for Competition Policy, Neelie Kroes.

The investigators removed from the firms’ premises highly-confidential information relating to issues such as the use of intellectual property rights, litigation and settlement agreements covering the EU because, they said, such information may “be easily withheld, concealed or destroyed.” Raids on a further group of companies took place last November, just before Commissioner Kroes announced the preliminary results of the enquiry.

These early findings suggested that, as a result of the tactics being used by drugmakers to delay or block generics’ entry onto the market, EU member states spent around 3 billion euros more during 2000-7 than they would have if the generics had been available without delay, and the incentive for innovation had also been reduced, she said.

The investigators reported that drugmakers were using a range of practices to block competition, including: - “patent clusters,” or the making of multiple patent applications for the same product - in one case over 1,300 for one drug; - lengthy patent litigation - more than 700 cases were brought during the seven-year period, each one lasting an average of three years and with generics firms winning around 60% of cases; - interventions before national authorities when generic companies ask for regulatory approvals, leading to a four-month delay on average; and - over 300 million euros paid by branded drugmakers to generics firms in “reverse payment settlements” to keep generics off the market.

Commenting on the findings, Commissioner Kroes said: “we now have a solid view of what is happening and why – the next step is to discuss our findings with the stakeholders and to draw the necessary conclusions.”

In its submission to the consultation, the European Federation of Pharmaceutical Industries and Associations (EFPIA) criticises the report’s use of “selective quotations to seek to mischaracterize the industry as anticompetitive,” saying that these “simply show how innovators have rightly sought to protect their inventions and illustrate the highly competitive nature of innovation in this sector…they are not evidence of competition law infringements as the report itself recognizes.”

Moreover, while the report acknowledges that patents are key to pharmaceutical innovation and should be protected, “it then contradicts itself by questioning the right of the industry to use perfectly lawful practices – such as patent portfolios, patent litigation and the release of improved medicines. These are essential for innovators to protect their huge investments in R&D,” says EFPIA.

The European Generic medicines Association (EGA)’s submission says the report confirms the experiences of generic companies operating in Europe. “The EGA’s members regularly encounter use of each of these strategies when seeking to launch new generic products in EU markets, and will frequently encounter the use of multiple strategies by an originator company in relation to a single medicine and across a range of member states,” it says.

Enforcement action by the Commission will be appropriate where originator companies’ use of such strategies give rise to an infringement of EU competition rules, but this will not be enough, says the EGA. Regulatory changes are also required and these will, in many cases, be more effective, it says.

Global Insight analyst Mitra Thompson has suggested that, given the accusatory tone of the preliminary report, it seems reasonable to expect that some firms will be the subject of litigation once the final report is published.

Companies found guilty of breaching EU antitrust rules can be fined as much as 10% of their annual sales and, while such a fine would clearly be unwelcome, it is not the biggest hurdle faced by brand-name drugmakers; what would be more damaging is the long-term implications that the probe could have on the way drugmakers defend their blockbusters against the onset of generic competition, Ms Thompson added.