Healthy Skepticism Library item: 12507

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Forelle C.
EU Probes Pharmaceutical Industry On Dwindling New Patents, Drugs
The Wall Street Journal 2008 Jan 16
http://online.wsj.com/article/SB120048256196094295.html?mod=googlenews_wsj

Full text:

European Union investigators raided drug companies in several countries as the bloc’s antitrust watchdog launched a wide investigation of potentially anticompetitive practices in the industry.
Neelie Kroes, the EU antitrust chief, said the industry-wide inquiry would examine whether large companies are abusing their market power to prevent competitors from bringing new drugs to market, or whether companies were colluding to restrain competition.
AstraZeneca PLC, GlaxoSmithKline PLC, Sanofi-Aventis SA, and Pfizer Inc. said they were among the companies contacted, although the commission did not name the companies searched Tuesday and early Wednesday, nor where they were located.
The EU’s so-called sector inquiries are broad-brush examinations; they don’t necessarily lead regulators to bring antitrust cases, but can result in substantial fines. Recent sector inquiries have focused on energy markets and payment-card systems. Both eventually resulted in antitrust action — most recently in the EU’s declaring unlawful a type of interbank fee set by MasterCard.
Mrs. Kroes cited figures indicating that the number of new drugs launched annually has declined from an average of 40 in the late 1990s to 28 between 2000 and 2004. “The pharmaceutical markets are not working as well as they might,” she said.
The pharmaceutical sector inquiry seems likely to reanimate a debate about the intersection of competition policy and patent law. EU officials say one concern is that companies are “misusing” patent laws to block new drugs made by rivals. Such misuse might entail overbroad patent filings or specious lawsuits. The officials say that if the companies in question are “dominant,” then any abusive behavior falls under their jurisdiction as a violation of EU monopoly rules.
Another potential violation is more straightforward — collusion between companies, for instance, agreeing not to enter each other’s markets, or taking payment not to launch a competing drug.
The EU has taken on alleged patent abuses before. In 2005, the Commission fined AstraZeneca €60 million ($89 million) for trying to block generic-drug makers from coming out with versions of its blockbuster ulcer drug Losec. The Commission said AstraZeneca gave “misleading” information to national patent offices that led them to wrongly extend the company’s patents on Losec. AstraZeneca has appealed the case.
Under EU regulations, commission officials can raid the premises of businesses operating in Europe, whether or not they are European companies.
The EU began the sector inquiry with unannounced inspections — triggering the first ones within hours of the commission’s decision Wednesday to authorize the inquiry. In earlier sector inquiries, EU officials had begun more politely, with requests for information.