EU: European Antitrust Regulators Raid Large Drug Makers

Antitrust regulators on Wednesday raided
big European drug makers as part of an investigation into whether
patents and lawsuit settlements are being manipulated to keep generic
products off the market.

Inspectors from the European Commission
seized information about intellectual property rights, litigation and
settlements in patent disputes in a series of surprise visits to
pharmaceutical companies. The commission would not identify the
companies involved, but Glaxo, AstraZeneca, Wyeth, Teva Pharmaceutical Industries, Sanofi-Aventis and Pfizer said later that they had been contacted.

In a statement the commission, the administrative arm of the European Union, said the investigation was in response to indications that competition in the European market "may not be working well."

new pharmaceuticals are being brought to the market, and the entry of
generic pharmaceuticals sometimes seems to be delayed," the statement
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."

inquiry will consider whether illegal barriers have been created by the
use of patent rights, vexatious litigation o r other means.

European competition commissioner, Neelie Kroes, told a news conference
that the number of new drugs reaching the market had dropped to an
average of 28 a year in the 2000-4 period from 40 a year in 1995-99.

Sanofi-Aventis spokesman, Geoffroy Bessaud, said the company had
received a visit at its Paris headquarters and was cooperating with the

The commission has already conducted inquiries
into financial services and the energy market, the latter resulting in
legal action against some utilities.

David W. Hull, head of the
European competition group at the law firm of Covington & Burling,
said the regulators' announcement represented a shift in emphasis to
generic drugs.

"The focus on generics is not surprising," Mr.
Hull said, "as the entry of generics onto the market has been a major
issue for the U.S. antitrust agencies in recent years, and it was only
a matter of time before it arrived in Europe."

Generic drugs have been used far less widely in countries like France than in the United States.

companies that produce brand pharmaceuticals for European use have
fought to slow the introduction of generic drugs that could lower
government health care costs.

That fight is part of a larger
struggle. Drug companies have long been at odds with governments of
countries with universal health systems, where the prices of patented
medications are much lower than in more profitable markets like the
United States. The companies say, for example, that European
governments enforce restrictions on direct advertising to consumers and
that public agencies often tell doctors and patients which drugs will
be paid for by the state.

They respond to complaints,
particularly those involving patent protection, by saying that patient
safety is their first concern. Patenting new versions of older drugs
improves care and assures patients that the medication is genuine, the
companies say.

Some fierce disputes in Europe focus on
next-generation medications made from biological materials. In those
cases, drug companies argue that their manufacture is so complex that
copying them is nearly impossible.

Generic-drug producers agree
that new technologies require new rules on copying, but they accuse
patent holders of seeking to impose additional testing to delay the
output of generics and protect profit.

AMP Section Name:Pharmaceuticals
  • 182 Health
  • 204 Manufacturing
  • 208 Regulation
* indicates required