Europe Issues Anticompetitive Inquiry Report

The European Commission adopted the

on its anticompetitive inquiry into the pharmaceutical sector on July 8, 2009. The inquiry began in January 2008 to investigate possible anticompetitive conditions in the pharmaceutical sector, specifically looking at why fewer new medicines were being brought to market in the European Union and why generic entry seemed to be delayed in some cases.

The EC received more than 70 comments on its preliminary report , which was issued in November 2008.

After reviewing a sampling of pharmaceutical drugs that faced exclusivity expiration between 2000 and 2007 in 17 EU countries, the inquiry team found that “citizens waited more than seven months after patent expiry for cheaper generic medicines, costing them 20% in extra spending.” Other major findings according to an EC press release included:

• Originator companies use a variety of instruments to extend the commercial life of their products without generic entry for as long as possible

• There is a decline of novel medicines reaching the market, perhaps based on certain company practices

• Further market monitoring is needed to identify all the factors that contribute to this decline in innovation.

The European Commission intends to increase scrutiny under the EC Treaty antitrust law and bring specific cases where appropriate, according to the release. The inquiry panel also recommended the following:

• The establishment of a community patent and a unified specialized patent litigation system in Europe to reduce administrative burdens and uncertainty for companies (this is based on the report’s finding that 30% of patent court cases are conducted in parallel in several EU member states, and in 11% of cases, national courts reach conflicting judgements).

• The welcoming of recent initiatives by the European Patent Office, including limiting the possibilities and time periods during which voluntary divisional patent applications can be filed, to ensure a high quality standard of patents granted and to accelerate procedures.

• Ensuring that third-party submissions do not occur or lead to delays for generic drug approvals

• Significantly accelerating approval procedures for generic medicines

• Taking action if misleading information campaigns questioning the quality of generic medicines are detected in their territory

• Streamlining trials that test the added value of novel medicines.

"We must have more competition and less red tape in pharmaceuticals. The sector is too important to the health and finances of Europe's citizens and governments to accept anything less than the best,” said Neelie Kroes, European commissioner for competition, in a statement on the European Commission website.

“The inquiry has told us what is wrong with the sector, and now it is time to act. When it comes to generic entry, every week and month of delay costs money to patients and taxpayers. We will not hesitate to apply the antitrust rules where such delays result from anticompetitive practices. The first antitrust investigations are already under way, and regulatory adjustments are expected to follow dealing with a range of problems in the sector."

These changes, meant to provide EU citizens with quicker access to safe, innovative and affordable medicines, are expected to take effect immediately.

See this related PharmTech article:

European Commission Report: Originators Block Generic Competition (ePT newsletter)