[Commons-Law] Leading drug firms raided in EU probe
Via: "Prashant Iyengar"
Leading drug firms raided in EU probe
http://www.business-standard.com/common/storypage_c.php?leftnm=10&autono=311001
Andrew Jack / London January 18, 2008
European regulators raided some of the world's biggest pharmaceutical
companies on Wednesday in an inquiry into whether they conspired to
keep up the price of drugs 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 targeted.
The inquiry will focus on whether the industry has abused patent
rights to delay the introduction of low-cost generic alternatives. It
will assess whether companies have made spurious attempts to extend
the life of intellectual property rights or cut deals with one generic
rival to the exclusion of others.
The EU is increasingly concerned about the rising cost of medicines
and declining innovation. Neelie Kroes, competition commissioner,
said: "If we have the feeling that something is rotten in the state,
then let's take the opportunity to find out." The raids, which began
on Tuesday, broke with Commission practice in that no advance notice
was given. Previous sectoral inquiries were launched with
questionnaires sent to companies. "It's certainly novel and rather
aggressive. Dawn raids presuppose that the Commission has got a whiff
of something they want to investigate," said a Brussels-based lawyer
specialising in competition issues. Europeans spent ¤200 billion a
year on pharmaceuticals, or ¤400 each, Kroes 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," she
added.
The Commission stressed that its visits were the starting point for a
broad inquiry, rather than a response to "positive indications of
wrongdoing" by the targeted companies. It said that the "unannounced
inspections" were designed to gather "highly confidential ...
information [which] may also be easily withheld, concealed or
destroyed".
The inquiry is set to issue interim findings by the autumn and final
results in spring 2009. It will examine whether pharmaceutical
practices infringe EU treaty prohibitions on restrictive practices.
The generic drugs industry, which produces cheaper but chemically
identical versions of medicines once their patents expire, has long
accused innovative drug manufacturers of "ever-greening", or using
spurious grounds to delay competition by extending their exclusive
intellectual property rights.
Pfizer, GSK, Teva, Sanofi-Aventis, AstraZeneca, Boehringer-Ingelheim
and Merck of the US all confirmed that they were contacted by
commission officials. Most would make no further comment. "We are
co-operating with the inquiry," said AstraZeneca.
Leading drug firms raided in EU probe
http://www.business-standard.com/common/storypage_c.php?leftnm=10&autono=311001
Andrew Jack / London January 18, 2008
European regulators raided some of the world's biggest pharmaceutical
companies on Wednesday in an inquiry into whether they conspired to
keep up the price of drugs 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 targeted.
The inquiry will focus on whether the industry has abused patent
rights to delay the introduction of low-cost generic alternatives. It
will assess whether companies have made spurious attempts to extend
the life of intellectual property rights or cut deals with one generic
rival to the exclusion of others.
The EU is increasingly concerned about the rising cost of medicines
and declining innovation. Neelie Kroes, competition commissioner,
said: "If we have the feeling that something is rotten in the state,
then let's take the opportunity to find out." The raids, which began
on Tuesday, broke with Commission practice in that no advance notice
was given. Previous sectoral inquiries were launched with
questionnaires sent to companies. "It's certainly novel and rather
aggressive. Dawn raids presuppose that the Commission has got a whiff
of something they want to investigate," said a Brussels-based lawyer
specialising in competition issues. Europeans spent ¤200 billion a
year on pharmaceuticals, or ¤400 each, Kroes 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," she
added.
The Commission stressed that its visits were the starting point for a
broad inquiry, rather than a response to "positive indications of
wrongdoing" by the targeted companies. It said that the "unannounced
inspections" were designed to gather "highly confidential ...
information [which] may also be easily withheld, concealed or
destroyed".
The inquiry is set to issue interim findings by the autumn and final
results in spring 2009. It will examine whether pharmaceutical
practices infringe EU treaty prohibitions on restrictive practices.
The generic drugs industry, which produces cheaper but chemically
identical versions of medicines once their patents expire, has long
accused innovative drug manufacturers of "ever-greening", or using
spurious grounds to delay competition by extending their exclusive
intellectual property rights.
Pfizer, GSK, Teva, Sanofi-Aventis, AstraZeneca, Boehringer-Ingelheim
and Merck of the US all confirmed that they were contacted by
commission officials. Most would make no further comment. "We are
co-operating with the inquiry," said AstraZeneca.
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