Saturday, November 29, 2008
European Commission Issues Preliminary Report on Pharmaceutical Sector Inquiry Highlights Cost of Pharma Companies' Delaying Tactics
Posted by D. Daniel Sokol
According to the press release on the Commission's Competition Policy website:
The European Commission has published its preliminary report on the competition inquiry into the pharmaceutical sector, which finds that competition in this industry does not work as well as it should. According to the preliminary findings there is evidence that originator companies have engaged in practices with the objective of delaying or blocking market entry of competing medicines. Practices vis-à-vis generic companies include multiple patent applications for the same medicine (so-called patent clusters), initiation of disputes and litigation, conclusion of patent settlements which constrain market entry of generic companies and interventions before national authorities when generic companies ask for regulatory approvals. Where successful, these practices result in significant additional costs for public health budgets – and ultimately taxpayers and patients – and reduce incentives to innovate. The report takes a sample of medicines that faced loss of exclusivity in the period 2000 to 2007 in 17 Member States and estimates that additional savings of around € 3 billion would have been possible on that sample over this period if generic medicines had entered the market without delay. The report also finds that companies applied defensive patenting strategies, primarily aimed at blocking competitors in the development of new medicines.