Europe is probing large drugmakers
The EU wants to learn why more medicines and manufacturers aren't emerging.
BRUSSELS, Belgium - European Union antitrust regulators said yesterday that they were conducting raids at pharmaceutical companies - including Pfizer Inc., GlaxoSmithKline P.L.C. and Sanofi-Aventis - to help determine why so few new medicines and drugmakers are emerging.
EU antitrust chief Neelie Kroes said she was looking at the entire pharmaceutical industry and wanted to know why generic drugs were so slow to be launched in Europe. Generic medicines are made by other companies after the original developer of the drug loses its exclusive patent rights.
The European Commission said its probe included inspections at the European premises of a number of pharmaceutical-makers - both research-based and generic - including some based outside Europe.
U.S.-based Pfizer, Britain's GlaxoSmithKline and Sanofi-Aventis of France - the world's three biggest drugmakers - along with Anglo-Swedish AstraZeneca P.L.C., Merck & Co. Inc., Johnson & Johnson's Belgian unit, Wyeth and Sandoz International GmbH, the generics division of Swiss company Novartis AG, confirmed that they had been the target of surprise raids and were cooperating with regulators.
GlaxoSmithKline, Wyeth and Johnson & Johnson have major operations in the Philadelphia area.
Kroes said the EU was working closely with U.S. officials. "We're not the only one active in this," she said.
The EU executive will examine whether companies were deliberately preventing new firms from entering the market by abusing patent rights and launching "vexatious litigation" to ward off potential rivals.
It said the probe was partly triggered by its 2005 case against AstraZeneca in which the company was fined $73 million for filing misleading information to patent offices to delay generic versions of its ulcer drug Losec for most of the 1990s.
Only 28 new types of drugs were launched from 2000 to 2004, far fewer than the 40 that hit the market from 1995 to 1999, European officials said.
"The commission wants to investigate the reasons for this, and, in particular, whether any agreements restricting competition or unilateral abuses of dominant position are connected to it," the EU said.
Regulators said they would also look into deals between drug companies - such as settlements in patent disputes - that might violate EU cartel rules.
Kroes said officials would likely follow up the raids with requests for information from the companies it has raided and from others. That is a precursor to launching formal probes into individual companies that can eventually lead to fines of up to 10 percent of annual global sales.