Big drug companies raided in EU probeBy Andrew Jack in London
Published: January 16 2008 12:06
European regulators raided some of the world’s biggest pharmaceutical companies on Wednesday in an inquiry into whether they conspired to keep up the price of drugs after patents expired.
Pfizer, GlaxoSmithKline, AstraZeneca and Sanofi-Aventis were among those that confirmed they had been visited as part of a European Commission-led probe into delays in the launch of low-cost generic drugs. Teva, the world’s biggest generics company, was also targeted.
The inquiry will focus on whether the industry has abused patent rights to delay the introduction of low-cost generic alternatives. It will assess whether companies have made spurious attempts to extend the life of intellectual property rights or cut deals with one generic rival to the exclusion of others.
The EU is increasingly concerned about the rising cost of medicines and declining innovation. Neelie Kroes, competition commissioner, said: “If we have the feeling that something is rotten in the state, then let’s take the opportunity to find out.”
The raids, which began on Tuesday, broke with Commission practice in that no advance notice was given. Previous sectoral inquiries were launched with questionnaires sent to companies.
“It’s certainly novel and rather aggressive, even. Dawn raids presuppose that the Commission has got a whiff of something they want to investigate,” said one Brussels-based lawyer specialising in competition issues.
Europeans spent €200bn a year on pharmaceuticals, or €400 each, Ms Kroes said.
“If innovative products are not being produced, and cheaper generic alternatives to existing products are in some cases being delayed, then we need to find out why and, if necessary, take action,” she added. The Commission stressed that its visits were the starting point for a broad inquiry, rather than a response to ”positive indications of wrongdoing” by the targeted companies. It said that the “unannounced inspections” were designed to gather “highly confidential . . . information [which] may also be easily withheld, concealed or destroyed”.
The inquiry is set to issue interim findings by the autumn and final results in spring 2009. It will examine whether pharmaceutical practices infringe EU treaty prohibitions on restrictive practices.The generic drugs industry, which produces cheaper but chemically identical versions of medicines once their patents expire, has long accused innovative drug manufacturers of “ever-greening”, or using spurious grounds to delay competition by extending their exclusive intellectual property rights.
Pfizer, GSK, Teva, Sanofi-Aventis, AstraZeneca, Boehringer-Ingelheim and Merck of the US all confirmed that they were contacted by commission officials. Most would make no further comment. “We are co-operating with the inquiry,” said AstraZeneca.