EU: European Commission launches pharmaceutical investigation

09 May 2008

Tim Harris

The European Commission has, using its investigatory powers under Article 17 of Regulation 1/2003, launched an inquiry into competition in the pharmaceuticals sector. The inquiry has not been launched in response to any indication of specific transgressions but will examine the reasons why fewer new pharmaceuticals are being brought to the market and the apparent delay to the entry of generic pharmaceuticals.

In particular, the inquiry will look at whether pharmaceutical companies are infringing the EC Treaty’s prohibition on restrictive practices (Article 81) with agreements such as patent dispute settlements. It will also examine whether the EC Treaty’s ban on the abuse of a dominant market position (Article 82) has been contravened by the creation of artificial barriers to entry of the market by, for example, misuse of patent rights or vexatious litigation.

Innovation in the pharmaceutical sector is assisted by patents and other intellectual property rights. However, active competition in the sector is important to the public to ensure value for money on health spending. The Commission has stated that its action will complement, rather than challenge, intellectual property laws.

The Commission can use a wide range of investigative measures to gather information, including requests for information. Companies are likely to view the information sought, such as the use of intellectual property rights and litigation, as highly confidential.

The inquiry is limited to medicines for human consumption; it will take into account differing regulatory frameworks but will not question the various health schemes of the Member States. Its findings will allow any future action to be taken on the most serious competition concerns. An interim report is expected in Autumn 2008 with the final results of the inquiry planned for Spring 2009.