The European Commission warned the pharmaceutical industry yesterday to “look out for” new antitrust investigations over the coming months.
The warning came from Neelie Kroes, the European Commissioner for Competition Policy, during an address to the European Parliament’s committee on economic and monetary affairs yesterday, during which she noted that the Commission is “now capitalising on our pharmaceutical sector inquiry with new cases.”
“With the costs of an aging population, and threats like H1N1 flu, we cannot delay efforts to improve the functioning of this sector. It is important to note that a sector inquiry bears fruit over a number of years, as those who have followed our energy cases will know,” she said, and added: “so please look out for further news in the coming months.”
The Commission inquiry into alleged antitrust practices in the industry began on January 18, 2008, and in November that year it published an interim report on its findings, which was highly critical of the innovator industry. However, in its final report, published on July 8 this year, the Commission’s tone had softened considerably, stating simply that it intends to “intensify its scrutiny of the pharmaceutical sector… including continued monitoring of settlements between originator and generic drug companies.” It also announced on the same day that an antitrust investigation had begun into whether French drugmaker Servier had agreed deals with a number of generics makers to delay competition to its heart disease drug perindopril.
Inquiry “has created a climate of fear”
Since then, no further investigations have been announced and the Commission has provided no new guidance on “rights and wrongs,” but it has succeeded in creating a “climate of fear” within the industry, according to experts at legal and tax firm Cameron McKenna.
In fact, what the Commission does next will depend very heavily on the outcome of its case against AstraZeneca, which it fined 60 million euros in June 2006 – after a six-year investigation – for alleged abuse of its dominant market position during 1993-2000 by blocking the market entry of cheaper generic versions of its blockbuster antiulcerant, Losec (omeprazole).
AstraZeneca’s appeal against the decision was heard by the European Court of Justice’s Court of First Instance last November but a judgement is still awaited. Whatever this decision is, it will be appealed, so no final judgement can be expected before 2011, but when it does come it will affect future Commission policy, according to Cameron McKenna partners Nick Bennett and David Marks. However, they add, the Commission takes the long view and it “has all the time in the world to lose slowly.”
