European Commission launches pharma sector enquiry

Some IPKat readers (at least those who do not also read Class 46) may yet be unaware that the European Commission has recently been carrying out 'dawn raids' on some well-known large pharmaceutical companies, including
GlaxoSmithKline, AstraZeneca, Sanofi-Aventis, Pfizer, Wyeth, Teva, Merck Sharp & Dohme, Johnson & Johnson, Sandoz and Bayer Schering Pharma (according to PharmaTimes). The raids are a precursor to the Commission's new sector enquiry into the European pharmaceutical industry, as announced recently (and, of course, shortly after the raids themselves) in a press release.

(top right: Commission officers politely ask GSK executives to come out with their secret papers)

Competition Commissioner Neelie Kroes (right) says:

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

The Commission points out that, unlike in cartel cases, where the Commission carries out inspections when it has indications that specific companies have committed competition law infringements, these inspections are not aimed at investigating practices of companies which the Commission has already positive indications of wrong-doing. They are just the starting point of this general sector inquiry and aim to ensure that the Commission has immediate access to relevant information that will guide the next steps in the inquiry. The kind of information the Commission will be examining, such as the use of intellectual property rights, litigation and settlement agreements covering the EU, 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.

What appears to have prompted the enquiry is a general suspicion that some patent-heavy pharmaceutical companies may be attempting to extend their monopolies beyond patent lifetimes by, amongst other things, the practice of 'evergreening', backed up with expensive court cases relating to (arguably very slim) inventions and making deals with (some may say "paying off") generic drug producers. This follows the decision in 2005 (see here, and IPKat comments here) to fine AstraZeneca 60 million euros for attempting to block the entry of generic producers into the proton pump inhibitor market (monopolised for a time by the blockbuster drug Losec) after expiry of their main patent.

Clearly this is the start of what is likely to be a very long and drawn out process. The IPKat does not expect to see much public information coming out in the next couple of years. What could happen after that, however, is anyone's guess.