The European Union's competition regulator launched a probe into the pharmaceutical sector Wednesday over concerns that cheap generic medicines are not reaching patients in need.
The move came after a sector-wide report showed that the number of new drugs reaching the market annually had dropped by over a third since 2000 and that people are being deprived of innovative, affordable and safe medicine.
AdvertisementThe competition watchdog, the European Commission, underlined that company practices were a big barrier, although the regulatory framework for drugs was also blamed.
"When it comes to generic entry, every week and month of delay costs money to patients and taxpayers," EU Competition Commissioner Neelie Kroes said in a statement.
"We will not hesitate to apply the antitrust rules where such delays result from anti-competitive practices."
The commission said it would investigate the relationship between companies that patent their products as brand name medicine, as well as their ties with generic drug producers.
Generic drugs are far cheaper -- on average they cost 40 percent less two years after they enter the market -- and save patients and insurance firms money without compromising on effectiveness.
Europeans pay on average 430 euros (598 dollars) each a year on medicines.
The report said some companies were using patent strategies to stop generic medicines hitting the market, or tying up potential competitors in legal disputes.
Among the tactics often used, drug developers were found to file multiple patent applications for the same medicine, leaving little scope for generics to be developed.
In the worst example uncovered, 1,300 separate filings were made for a single medicine across the 27-nation European Union.
In another tactic, drug companies were found to often launch patent litigation against potential rivals -- nearly 700 cases were found -- slowing down their entry to the market.
On average, such cases would drag on for three years. Most were lost by the company that developed the original drug. Some 200 were settled out of court.
The European Consumers Organisation BEUC welcomed the investigation and urged Brussels to take action against offenders.
The report shows "the pharmaceutical market is not working properly and that vicious tactics are used to delay or prevent the entry of more affordable and innovative medicines into the market," BEUC head Monique Goyens said.
"We encourage the European Commission and member states to take concrete action and address unethical practices."
The European Generic Medicines Association, an industry lobby, greeted the report, saying it showed that new laws are required "to ensure the timely availability of generic medicines."
The head of the European Federation of Pharmaceutical Industries and Association (EFPIA), another lobby, and focused on the report's regulatory findings.
"We have stated consistently that complex and divergent regulatory barriers are the primary cause of market entry delay for both generic and innovative medicines," said EFPIA president Arthur Higgins.
"We are pleased that the final report recognises this reality," he said.
But the lobby underlined that "in its final version, the report failed to substantiate the initial allegation that patenting strategies dampened innovation or delayed generic entry illegitimately."
As it announced the investigation, the commission said it had also launched an anti-trust probe into French pharmaceutical maker Les Laboratoires Servier, and several generic drug companies that had reached agreements with it.
It said "unilateral behaviour by Servier" and these deals might have hindered the entry on to EU markets of generic perindopril, a cardio-vascular medicine first developed by the French concern.