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EU accuses drugmakers of blocking cheaper generics

01 December 2008, 01:33 CET
EU accuses drugmakers of blocking cheaper generics

Drugs

(BRUSSELS) - EU Competition Commissioner Neelie Kroes accused drug companies on Friday of blocking generic treatments and rival medicines from entering the market, threatening to take antitrust action.

Unveiling preliminary findings from a sector-wide probe, she said drug companies were using patents and litigation to keep generic or more affordable medicines from coming onto the market.

Europe's top competition watchdog said such tactics were driving up prices for consumers and taxpayers, who spend on average 430 euros (556 dollars) a year on medicines.

"It is still early days but the commission will not hesitate to open antitrust cases against companies where there are indications that the antitrust rules may have been breached," Kroes told a news conference.

Initial findings of the inquiry showed that pharmaceutical groups used a wide range of measures to trip up generic drugmakers, who sell medicines equivalent to original treatment once their patents have expired.

Among the tactics often used, drug developers were found to file multiple patent applications for the same medicine, leaving little scope for generics to be developed.

In the worst example uncovered by the probe, 1,300 separate filings were made for a single medicine across the European Union.

In another tactic, drug companies were found to often launch patent litigation cases against potential rivals, slowing down their entry to the market.

On average, such cases would drag on for three years and the majority of them were lost by the company that developed the original drug.

The probe also found that drug companies sometimes paid rivals to stay off their turf or would lobby regulators to keep them from approving rival medicines or decide on their pricing or reimbursement status.

The head of the European Federation of Pharmaceutical Industries and Association, an industry lobby, dismissed the probe's findings so far as unfounded.

"The preliminary report does not adequately recognize the complex and highly regulated nature of the pharmaceutical market in Europe and misses the opportunity to address the real issues impeding innovation," said Arthur Higgins, who is also chief executive of Bayer HealthCare.

Meanwhile, the European Generic Medicines Association, another lobby, greeted the report, saying that it had uncovered "some key problems in the EU system."

"There is still tremendous potential for greater generic uptake in Europe," association's director general Greg Perry said.

"We should now be looking for effective ways to improve the sector for patients throughout Europe."

Kroes said that at this stage, she did not want to indentify wrongdoing by individual companies or advocate specific regulatory actions which could come when the probe is completed in the first half of next year.

The Dutch commissioner kicked off the probe in January with a series of raids across the sector which targetted such industry giants as Sanofi-Aventis, Novartis' Sandoz unit, GlaxoSmithKline and AstraZeneca among others.

Commission regulators also carried out a series of raids this week against unnamed drugmakers in a move it said was not linked to the ongoing probe.

Text and Picture Copyright 2008 AFP. All other Copyright 2008 EUbusiness Ltd. All rights reserved. This material is intended solely for personal use. Any other reproduction, publication or redistribution of this material without the written agreement of the copyright owner is strictly forbidden and any breach of copyright will be considered actionable.




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