EU – Competition Inquiry Findings Released

The results of the EU Commission’s 18-month long inquiry into anti-competitive conditions in the pharmaceutical industry were released on 8th July 2009.

The inquiry, launched in January 2008, found that generic medicines take too long to reach the market, and this is often due to drug companies using a variety of techniques to extend the commercial life of their products. Between 2000 and 2007, consumers waited an average of seven months for a cheaper generic medicine once the patent had expired, costing 20% in extra spending. The EU Commission called upon member states to do more to boost the uptake of generic medicines, but will also scrutinise the sector more closely and prosecute any companies which violate the competition law.

The first settlement agreement to be investigated is between French-based Servier and a number of generic companies including Teva, Krka, Lupin, Mylan’s Matrix subsidiary and Unichem’s Niche Generics unit, over “possibly restrictive” practices which may have hindered the entry of the generic versions of Servier’s cardiovascular drug perindopril.

The EU Commission is expected to review around 200 such agreements in the coming months.

The inquiry also found that fewer innovative medicines are reaching the market, and that certain drug company’s practices may be contributing to this. The EU Commission said it will monitor the situation closely to identify the factors contributing to the decline in innovation.

The inquiry also concluded that there is an urgent need for an EU patent and patent-litigation system, which will reduce costs and improve efficiency. It will also reduce uncertainty for drug companies, because at present, 30% of patent court cases are conducted in parallel in several member states, and in 11% of cases national courts reach conflicting judgements.

Further reading - Pharmaceutical market profiles are available for all European countries from Espicom: Pharmaceutical Market Reports; Europe