EU report: Drug makers block market entry of competing medicines

BRUSSELS, Nov. 28 (Chinese media) -- Major European drug

makers are blocking or delaying cheaper generic medicines from entering the

market, according to a preliminary report published Friday by the European

Commission.

Evidence shows the companies that develop and sell

new medicines have employed a variety of methods to delay or block market entry

of competing medicines once their patents have expired.

The report came after an 11-month investigation that

began in January into major drug makers, including Pfizer Inc., GlaxoSmithKline

and Sanofi Aventis.

Investigators also raided AstraZeneca, Merck Sharp

Dohme, Johnson Johnson's Belgian unit and Sandoz International GmbH,

the generics division of Swiss company Novartis and Wyeth of Madison, New

Jersey.

The practices aimed at stifling competition have

affected patients and taxpayers because generic products lower medicine costs by

a large margin, said the report. It said, too, that the drug makers' tactics

also hurt innovation incentives.

The report examined a sampling of medicines that

faced loss of exclusivity in the period 2000 to 2007 in 17 EU member states. It

estimated that additional savings of around 3 billion euros would have been

possible on that sample over the period if generic medicines had entered the

market without delay.

Based on a sample of medicines that faced generic

entry in the period from 2000 to 2007, average medicine prices declined by

almost 20 percent after the first year of availability.

In rare cases, the decrease in price could be as high

as 90 percent. For the sample under analysis, total savings gained by generic

entry amounted to at least 14 billion euros over the period.

Without those savings, total expenditures for the

medicines examined would have been over 25 percent higher.

The EU's 27 member states spend 200 billion euros, or

400 euros per person on medicines every year, most of which is covered by state

health insurance programs.

The practices used by the drug makers include

multiple patent applications for the same medicine (so called patent clusters),

initiation of disputes and litigation, conclusion of patent settlements that

constrain market entry of generic companies and interventions before national

authorities when generic companies ask for regulatory approvals.

Originator companies intervened in national

procedures for the approval of generic medicines in a great number of cases,

which on average led to four months of delay for the generic medicine, the

report said.

The report also found that companies applied

defensive patenting strategies, primarily aimed at blocking competitors in the

development of new medicines. Those efforts could obstruct innovation, lead to

higher costs for competing pharmaceutical companies and delay consumers' access

to innovative medicines, the report said.

"Competition in the pharmaceuticals market is vital

for people to get affordable and innovative medicines and to make sure that

taxpayers get the best value for money out of their healthcare system," said

Neelie Kroes, Competition Commissioner.

"It is still early days, but the Commission will not

hesitate to open antitrust cases against companies where there are indications

that the antitrust rules may have been breached," Kroes said

The sector inquiry began as a way to investigate why

fewer new medicines were brought to market and why generic entry seemed to be

sometimes delayed.

Only 28 new types of drugs entered the market from

2000 to 2004,far fewer than the 40 types from 1995 to 1999.

The investigation also was sparked by an EU case in

2005 against Anglo-Swedish AstraZeneca, which was fined 60 million euros for

providing misleading information to patent offices to delay generic versions of

its ulcer drug Losec for most of the 1990s.

Before reaching final conclusions, the Commission

invites all stake holders to submit their views and observations on the

preliminary findings. The public consultation lasts until Jan. 31.

The final report will take into account comments

received during the public consultation and is expected in spring 2009.