Big companies block cheap generic drugs, EU report says
VALENTINA POP
28.11.2008 @ 17:55 CET
EUOBSERVER / BRUSSELS - Big pharmaceutical companies delay or block the market entry of competing medicines, resulting in "significant additional costs" for taxpayers and patients, a preliminary report on the European Commission's competition inquiry into the pharmaceutical sector has revealed.
"We now have a solid view of what is happening and why: the next step is to discuss our findings with the stakeholders and to draw the necessary conclusions. 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," competition commissioner Neelie Kroes warned during a press conference on Friday (28 November).
Member states could have saved around 3 billion over the last eight years if big pharmaceuticals had not blocked the entry of generic drugs to the market (Photo: www.freeimages.co.uk)
The preliminary report shows that the so-called 'originator companies', which develop and sell new medicines, used a variety of methods in order to delay or block market entry of 'generic companies' that sell medicines equivalent to original medicines at a cheaper price once patents have expired.
The commission took a sample of medicines for which companies lost the exclusive rights in the period 2000-2007 in 17 member states and estimated that "additional savings of around 3 billion would have been possible for the sample over the period if generic medicines had entered the market without delay."
It also found that "average price levels for medicines decrease by almost 20 percent after the first year following generic entry."
"In rare cases, the decrease in price levels can be as high as 90 percent. For the sample under analysis, total savings gained by generic entry amounted to at least 14 billion over the period. Without these savings, total expenditure for the medicines analysed would have been over 25 percent higher," the report shows.
At the start of the inquiry in January, the commission raided a number of companies, including AstraZeneca, Glaxo Smith kline, Sanofi-Aventis, Novartis, Sandoz and Merck.
Documents uncovered by the commission during its investigation openly conceded such anti-competitive actions: "We identify options to obtain or acquire patents for the sole purpose of limiting the freedom of operation of our competitors," read one document, according to a commission statement that does not name the company from where it originated.
The EU executive found that on average it took about seven months for generic products to enter the market, while top-selling medicines would face an average delay of four months.
Industry feels 'mischaracterised'
To the industry, however, the commission's report was "disappointing" and aimed at "mischaracterising the industry as anti-competitive," a statement from the European Federation of Pharmaceutical Industries and Associations (EFPIA) said.
"The preliminary report does not adequately recognise the complex and highly regulated nature of the pharmaceutical market in Europe and misses the opportunity to address the real issues impeding innovation and the development of and access to innovative medicines," said Arthur J. Higgins, CEO of Bayer HealthCare and President of EFPIA.
As to the quotes found by the commission on the strategies used to block generic companies, they "Simply show how innovators have rightly sought to protect their inventions and illustrate the highly competitive nature of innovation in this sector, which is entirely to the benefit of society," EFPIA said.
"The report also overstates the level as well as the reasons for delays in generic market access. In line with the EFPIA's own findings, the EU's competition department's analysis has confirmed that where there is a strong commercial incentive, generic drugs enter the market rapidly within four months or less. This compares very favourably with the delay in access by patients to innovative products, which can be up to 14 months in some EU markets," Mr Higgins added.
Savings could be achieved for instance by following the example of the Netherlands, where 400 million was saved in one year on 33 medicines "simply by promoting active price competition between generic drugs," the EFPIA pointed out.