EU Commission starts pharma sector inquiry with unannounced inspections

In response to possible antitrust concerns, the European Commission has launched an inquiry into competition in the pharmaceuticals sector (under Article 17 of Regulation 1/2003), and is conducting inspections at the premises of a number of research-based and generic drugmakers. The investigation follows indications that competition in pharmaceutical markets in the European Union may not be working well: fewer new medicines are being brought to market, and the entry of generic drugs sometimes seems to be delayed, noted the EC.

The inquiry will therefore look at the reasons for this. In particular, it will examine whether pharmaceutical companies, such as in settlements of patent disputes, may infringe the EC Treaty's prohibition on restrictive business practices (Article 81). It will also look into whether companies may have created artificial barriers to entry, whether through the misuse of patent rights, "vexatious litigation" or other means, and whether such practices may infringe the EC Treaty's ban on abuses of dominant market positions (Article 82). Vigorous competition in this sector is crucial for the public, as it ensures both access by patients to state-of-the-art medicines, and value for money for health spending by individuals, private health schemes and government health services in Europe. An interim report is planned for the fall this year, with final results expected in the spring of 2009. The inquiry's findings will allow the Commission, or the national competition authorities, to focus any future action on the most serious competitive concerns, and to identify remedies to resolve the specific antitrust problems in individual cases.

Competition Commissioner Neelie Kroes said: "individuals and governments want a strong pharmaceuticals sector that delivers better products and value for money. But 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."