Europe takes gentle aim at pharma deals - July 09, 2009
Europe’s pharmaceutical industry breathed a sigh of relief yesterday as the European Commission unveiled the results of its inquiry into anti-competitive activities of major companies.
These activities might include deals between companies or complex patenting strategies designed to delay the arrival of generic drugs on the market. This could mean consumers end up paying for the more expensive branded drugs rather than cheaper generics.
Despite the fact that antitrust proceedings have been initiated against several pharma players, the perception seems to be that the industry had dodged a bullet. The European Commission announced a formal antitrust investigation into French pharma company Servier and a number of generics companies over “agreements” which may have been designed for “hindering entry on to the market of generic perindopril, a cardio-vascular medicine” (press release).
That announcement came as the Commission released its final report on antitrust and generics, claiming that “shortcomings in pharmaceutical sector require further action”. It says that the appearance of generic drugs on the market is being delayed and that “company practices are among the causes”.
While this was going on the US Justice Department said that brand-name firms paying generic makers to delay their generics is “presumptively unlawful”, says Antitrust Division head, Christine Varney (Pharma Times).
Back in Europe, Competition Commissioner Neelie Kroes, says, “We must have more competition and less red tape in pharmaceuticals.” (Press release.)
“When it comes to generic entry, every week and month of delay costs money to patients and taxpayers. … The first antitrust investigations are already under way, and regulatory adjustments are expected to follow dealing with a range of problems in the sector.”
Kroes described some of the agreements between firms on generics as “rotten” (EurActive, Bloomberg).
Despite the veiled and not-so-veiled allegations of sharp practise by unnamed companies in the final report, Europe’s pharmaceutical industry has not come out against the findings. Industry group EFPIA issued a statement saying:
It [the report] demonstrated a welcome shift away from the emotive language of the interim report, with a better balanced, more holistic view of the issues facing the sector. … In its final version, the report failed to substantiate the initial allegation that patenting strategies dampened innovation1 or delayed generic entry illegitimately.”
The European Generic Medicines Association welcomed the final report, which it says, “takes the findings of the preliminary report of 28 November 2008 to the next level”. As the Wall Street Journal notes, the group has previously criticised Servier for the way it patented perindopril.
Servier says the commission has not identified any “conclusive proof” and that it would “continue to defend rights in this domain in accordance with the law” (Financial Times).
