BioWorld International Correspondent

BRUSSELS, Belgium - The European Union has launched an in-depth antitrust investigation of the research-based pharmaceutical sector, in response to suspicions of artificial impediments to the entry of generic products.

In announcing the inquiry, European Competition Commissioner Neelie Kroes revealed that dawn raids on major pharmaceutical companies already had taken place. GlaxoSmithKline, Sanofi-Aventis, Pfizer and AstraZeneca are among the companies targeted. The major generic producer, Teva, also was subject to an unannounced inspection.

"The inquiry is a response to indications that competition in pharmaceutical markets in Europe may not be working well," according to an EU statement. "The entry of generic pharmaceuticals sometimes seems to be delayed."

The inquiry will look particularly at whether agreements between pharmaceutical companies, such as settlements in patent disputes, may infringe EU prohibitions on restrictive business practices, and at possible misuse of patent rights or vexatious litigation to create barriers to generics.

"Misusing public procedures and regulations in order to prevent generic firms from competing can under certain circumstances amount to an abuse of a dominant position," the statement noted.

An interim report is planned for autumn 2008, and final results are expected in the spring of 2009.

"Individuals and governments want a strong pharmaceuticals sector that delivers better products and value for money," Kroes said. "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."

She justified the dawn raids on companies on the grounds that the kind of information the EU will be examining "is by its nature information that companies tend to consider highly confidential. Such information may also be easily withheld, concealed or destroyed. This is why inspections have been considered appropriate."

The EU suspicions have been aroused both through its own monitoring of the sector, and through specific cases (including a 2005 judgment against AstraZeneca for unfairly impeding generic copies of its Losec anti-ulcer product).

The European Federation of Pharmaceutical Industries and Associations said it hoped that the inquiry would enable the EU "to better understand the nature and process of innovation in the pharmaceutical sector," and that it would be providing an in-depth analysis of the role of competition in the pharmaceutical sector, including how patents drive research and innovation.

It said it was "confident that the [EU's] interim report to be released in the autumn will stress the importance to enforce competition rules and intellectual property rights, which are the trigger to new investments and new discoveries in medicines."

But the European generic manufacturers' lobby, the EGA, said it shared the EU's concerns over the operation of competition in the market. "A weakness exists in the European patent system that allows the granting of weak patents, which subsequently cause so-called evergreening of pharmaceutical blockbusters and in some cases creates unclear patent situations for certain molecules. In addition, the launch of generic medicines is sometimes blocked due to unjustified litigation based on weak evidence, which results in delays in patient access to affordable generic medicines," the EGA said.

By coincidence, the day before the EU announcement, the European medicines agency announced that Marvel LifeSciences of the UK had withdrawn its marketing authorization applications for copy products of Eli Lilly's Humulin human insulin. The Marvel applications - for Insulin Human Rapid Marvel, Insulin Human Long Marvel and Insulin Human 30/70 Mix Marvel - were based on claims that they were "biologically similar to a reference medicine already authorized in the European Union." The company said it had withdrawn its applications because the medicines agency had not granted an extension to the time frame to respond to a list of questions.