Healthy Skepticism Library item: 16602

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Publication type: news

Tait N, Jack A, Croft J
Sanofi and Teva raided in EU antitrust probe
The Finanical Times 2009 Oct 7
http://www.ft.com/cms/s/0/5cd0836e-b2da-11de-b7d2-00144feab49a.html

Full text:

Sanofi-Aventis, the Paris-based pharmaceutical group, and Israel’s Teva, the world’s largest generic drugs producer, have been raided by European competition officials in a fresh probe into suspected antitrust breaches believed to have occurred in France.

The European Commission said “surprise inspections” had begun yesterday at the premises of a number of pharmaceutical companies because of concerns about “possible anti-competitive business practices and/or abuse of a dominant position”.

The commission did not elaborate further, but the move comes less than three months after it completed a detailed 18-month probe into practices in the drugs sector. This concluded that the launch of generic rival drugs was being delayed and costs to consumers inflated.

At the time, the commission claimed the patent-holding companies used various means to extend the commercial life of their products and delay generic entry for as long as possible – including lengthy litigation, restrictive settlement agreements and the filing of large “patent clusters” for a single medicine.

Although lawyers questioned whether such practices were necessarily illegal, the competition watchdog promised increased scrutiny of individual companies alongside a continuing probe it began against Servier of France early last year.

Only last week, Neelie Kroes, EU competition commissioner, told European lawmakers: “We are now capitalising on our pharmaceutical inquiry with new cases . . . Please look out for further news in the coming months.”

Sanofi-Aventis has in the past negotiated several “authorised generic” deals with low-cost drug producers once its patented drugs came under threat, although most such deals have been in the US. In Europe, it has been expanding its own presence in generics through its subsidiaries Winthrop and Zentiva.

Yesterday’s raids coincided with a keenly awaited ruling from Europe’s top court, broadly favouring GlaxoSmithKline in a long-running battle with the commission over so-called “parallel trade” in pharmaceuticals in Europe.

The court said that the commission would need to reconsider its objections to GSK’s plan to raise some prices to Spanish wholesalers, to prevent them taking advantage of Spain’s low-price environment and export the drugs elsewhere in the EU.