Big pharma braced for EU probe closure

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The European Commission is today widely expected to confirm earlier allegations that big pharma groups are breaching EU competition rules by blocking the entry of cheaper generics onto the European market.

The 27-strong college of commissioners is meeting today (8 July) to conclude a year-long investigation into the pharmaceutical sector with a 600-page final report and 25-page summary for policymakers.

The Commission’s inquiry was launched in dramatic fashion in January last year with a number of unannounced raids in the offices of top pharmaceutical companies, including the UK’s GlaxoSmithKline and AstraZeneca, France’s Sanofi-Aventis, US pharmaceuticals giant Pfizer and Swiss company Novartis AG (EURACTIV 17/01/08). 

A second series of raids were conducted in November, just days ahead of the publication of the Commission’s interim report (EURACTIV 26/11/08).

The aim of the EU executive’s unprecedented intervention was to find out whether anti-competitive practices in the sector are hindering innovation and blocking the entry of cheap generics onto the European market. 

The preliminary report also pointed to so-called ‘patent cluster’ strategies – whereby firms apply for multiple patents for the same medicine – and ‘defensive patenting’, both of which are primarily aimed at preventing competitors from developing new medicines (EURACTIV 28/11/08).

“My forecast is not very optimistic because the Commission goes where the wind blows,” said a Brussels lobbyist from a big pharma company, who preferred not to be named.

For the EU executive, “the priority goes to the generic medicines and to short-term savings for the member states in order to contain their health spending which have gone worse with the economic crisis,” the source said.

Big pharma firms have long complained that their financial margins to conduct ever-more expensive R&D were being squeezed by rules allowing generic companies to copy key medicines a few years after they are placed on the market.

As a consequence, pharma groups have fewer years to yield a profit from their research which they claim has grown more expensive over time due to stricter regulations for placing medicines on the market.

“R&D is costing a lot, this is true, especially for intellectual property,” added the pharma lobbyist, but it is “the only way forward to develop therapies”.

“Without R&D, there will soon be no more products to copy.”

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