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Big drugs companies raided by European competition regulators
Big drugs
companies raided by European competition
regulators
 |
|
The Eli Lilly
plant at Dunderrow, near the seaside town of Kinsale, 11
miles west of Cork City. About 450 people are employed
there. |
European competition regulators on
Wednesday raided some of the world’s
biggest pharmaceutical companies as part
of an investigation to check whether the
drugs companies conspired to keep the
the price of drugs high 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 raided.
The European
Commission announced that has launched a sector inquiry into competition in the
pharmaceuticals sector and is conducting inspections at the premises of a number
of innovative and generic pharmaceutical companies. The inquiry is a response to
indications that competition in pharmaceutical markets in Europe may not be
working well:
fewer new pharmaceuticals are being brought to
market, and the entry of generic pharmaceuticals sometimes seems to be delayed.
The inquiry will
therefore look at the reasons for this. In particular, the inquiry will examine
whether agreements between pharmaceutical companies, such as settlements in
patent disputes, may infringe the EC
| |
| "With respect
to novel medicines, the number of such medicines reaching the
market has decreased over time. From 1995-1999 an average of 40
novel molecular entities were launched per year. From 2000-2004
the figure was only 28. The Commission wants
to investigate the reasons for this and in particular whether
any agreements restricting competition or unilateral abuses of
dominant position are connected to it.
With respect to generic medicines, the Commission has
indications that the entry of such medicines into the market
place is, in some cases, delayed. Here also, the Commission will
investigate the causes of this trend and in particular whether
it results from any restrictions of competition between
producers or any unilateral abuses of dominant positions." -
European
Commission |
Treaty's prohibition on restrictive
business practices. It will also look into whether companies may have created
artificial barriers to entry, whether through the misuse of patent rights,
vexatious litigation or other means, and whether such practices may infringe the
EC Treaty's ban on abuses of dominant market positions.
Vigorous
competition in this sector is crucial for the public, as it ensures both access
by patients to state-of-the-art medicines, and value for money for health
spending by individuals, private health schemes and government health services
in Europe. An interim report is planned for autumn 2008 and final results are
expected in the spring of 2009. The inquiry's findings will allow the Commission
or national competition authorities to focus any future action on the most
serious competition concerns, and to identify remedies to resolve the specific
competition problems in individual cases.
Competition Commissioner
Neelie Kroes said: "Individuals and governments want a strong
pharmaceuticals sector that delivers better products and value for money. But 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."
Europeans spend €200bn a year on
pharmaceuticals, or €400 each, Kroes
added.
 |
|
European Competition Commissioner Neelie Kroes
|
Unlike cartel cases, where the Commission carries
out inspections when it has indications that specific companies have committed
competition law infringements, these inspections are not aimed at investigating
practices of companies which the Commission has already positive indications of
wrong-doing. They are just the starting point of this general sector inquiry and
aim to ensure that the Commission has immediate access to relevant information
that will guide the next steps in the inquiry. The kind of information the
Commission will be examining, such as the use of intellectual property rights,
litigation and settlement agreements covering the EU, is by its nature
information that companies tend to consider highly confidential. Such
information may also be easily withheld, concealed or destroyed. This is why
inspections have been considered appropriate.
Innovation in the pharmaceutical sector is driven
by patents and other intellectual property rights, and the inquiry will be
conducted taking into account these existing rights. The Commission's action
will therefore complement, not challenge, intellectual property law, as both
systems share the objectives of fostering innovation, and increasing consumer
welfare. The inquiry will also take due account of the specificities of the
relevant regulatory frameworks. It will not in any way put into question the
various health schemes in force in the Member States. The inquiry is limited to
medicines for human consumption.
To carry out the inquiry, the Commission can use
a wide range of investigative tools to gather information from companies and
trade associations, including requests for information. During the inquiry, the
Commission will maintain an open dialogue with all stake-holders, and will keep
the sector informed about progress.
On 22 February 2007, the Commission decided to
initiate antitrust proceedings against German drugs firm Boehringer
following concern about misuse of the patent system in order to
exclude potential competition in the area of chronic obstructive
pulmonary disease (COPD) drugs.
AstraZeneca was fined €60
million in June 2005, for by misusing public procedures and regulations in a
number of EEA (European Economic Area) States with a view to excluding generic
firms and parallel traders from competing against AstraZeneca's anti-ulcer
product Losec.
RELATED
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were from industry sector in 2006 |
