EC reports antitrust findings

In July 2009, the European Commission announced the findings of its report looking at the pharmaceutical sector. The report was initiated in January 2008, with its preliminary conclusions being announced the following November. The final report has concluded that generic entry in the European Union is being delayed and that there has been a decline in the number of new medicines reaching the market. The report suggested that company practices were amongst the causes, but accepted that other factors were also at play.

The Commission intends to follow the report up with intensified scrutiny of the pharmaceutical sector under EC antitrust laws. It added that certain acts initiated by originator companies would remain subject to competition scrutiny if they were being employed in an anti-competitive way in order to delay generic entry. In addition, defensive patenting strategies that focused on excluding competition without pursuing innovative efforts would also remain under scrutiny. The EC would also monitor agreements between originator and generic companies, in order that such agreements did not limit or delay market entry of generics.

The European Generic medicines Association (EGA) announced that it was welcoming the report, commenting that the final report took the initial findings from November 2008 to the next level. The organisation added that it and its members had worked closely with the EC, seeing the report as an opportunity to address what it considered to be loopholes in the legislative framework. The EGA added that it was urging EU member states to implement the recommendations of the report quickly. Perhaps unsurprisingly, the European Federation of Pharmaceutical Industries and Associations (EFPIA) was less welcoming. However, looking for positives in the report for the branded industry, the EFPIA commented that the final report had represented a welcome shift away from what it had considered to be emotive language used in the preliminary findings. The EFPIA made the argument that it had consistently found that regulatory barriers were causing problems for both the generic and branded industries alike in Europe, adding that it was pleased that the report had backed this up. The organisation added that it welcomed many of the report’s recommendations, including creating a streamlined patent system, which would obviously be of benefit to the branded industry. However, the EFPIA commented that the Commission should use the report to address the issue of competition in the off-patent market, arguing that this was an area which could be reformed to produce savings. These savings could then be reinvested to fund innovative medicines, an idea which would probably not go down well with the EGA.

The EC has been able to produce a report that has something for both the generic and branded industries to take comfort from. The question now will be whether or not the EC will be able to turn the report’s recommendations into actions.

Ian Platts - Editor, World Generic Markets