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.
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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. There is the new site large-scale questionnaire http://www.tcmadvisory.com/question.html , you can get a better understanding, and write comments to the column you are interested.
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