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The European Commission announced Wednesday that it would probe the pharmaceutical sector over concerns big drug makers are trying to stop cheaper generic medicines reaching consumers.
Generic drugs are far cheaper - on average they cost 40% less two years after the enter the market - than brand medicines and save patients and insurance firms money while remaining just as effective.
The commission said it wants to investigate the relationship between the makers of so-called "originator companies," who patent their products as brand name medicine, as well as their ties with generic producers.
The move came after a sector-wide report showed that the number of new drugs reaching the market annually had dropped by over a third since 2000 and that patients are being deprived of innovative, affordable and safe medicines.
It expressed concern that some companies were using patent strategies to stop generic medicines hitting the market, or tying up potential competitors in legal disputes and litigation.
Drug companies using underhand tactics
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, 1 300 separate filings were made for a single medicine across the 27-nation 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.
Such tactics driving up prices
Europe's top competition watchdog said such tactics were driving
up prices for consumers and taxpayers, who spend on average 430
euros a year on medicines.
As it announced the investigation, the commission said it had also launched an anti-trust probe into French pharmaceutical maker Les Laboratoires Servier.
The commission said it had taken the action over "suspected breaches of (EU) rules on restrictive business practices and on abuse of a dominant market position."
It also said it would study whether several generic drug companies had concluded "a number of individual, possibly restrictive, agreements between each of them and Servier."
The competition watchdog said that "unilateral behaviour by Servier" and these agreements might have hindered the entry on to EU markets of generic perindopril, a cardio-vascular medicine first developed by the French concern. – (Sapa, July 2009)
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