European Commission launches "anti-trust sector inquiry" in the pharmaceutical sector

"Individuals and governments want a strong pharmaceuticals sector that delivers better products and value for money. But if innovative products are not being produced, and cheaper generic alternatives to existing products are being delayed, then we need to find out why and, if necessary, take action." Neelie Kroes, European Commissioner for competition

A competitive European pharmaceutical industry is high on the agenda of the Commission in light of the Lisbon strategy. In health care, the European Union shares competences with its Member States, who are responsible for providing heath services and medical care within their territories (see article 152 of the Treaty).

The market for pharmaceuticalsis heavily regulated at the national level. For example, national pricing and re-imbursement rules for medicines are not harmonised within the Single market. This leaves less room for competition on prices and therefore market forces cannot realise their full effect here as they do in most other industry sectors.

The role of the European Commission is to ensure that under these conditions market players (Member States, national health services and pharmaceutical companies) respect the Treaty rules on free competition and the free movement of goods and services within the internal market.

In this context, the European Commission has launched an inquiry into competition in the pharmaceuticals sector and is conducting inspections at the premises of a number of innovative and generic pharmaceuticals companies.

The inquiry is a response to indications that competition in pharmaceuticals markets in Europe may not be working well: fewer new medicines are being brought to market, and the entry of generic ones sometimes seems to be delayed. The inquiry will therefore look at the reasons for this.

In particular, the inquiry will examine whether agreements between pharmaceutical companies, such as settlements in patent disputes, may infringe the Treaty's prohibition on restrictive business practices (Article 81 EC). It will also look into whether companies may have created artificial barriers to entry (through the misuse of patent rights, vexatious litigation or other means) and whether such practices may infringe the Treaty's ban on abuses of dominant positions (Article 82 EC).

An interim report is planned for autumn 2008 and final results are expected in the spring of 2009. The inquiry's findings will, if necessary, allow the Commission or national competition authorities to focus any future action on the most serious competition concerns, and to identify remedies to resolve the specific competition problems in individual cases.

Links to the original information and relevant documents

http://ec.europa.eu/comm/competition/sectors/pharmaceuticals/overview_en.html

http://ec.europa.eu/comm/competition/sectors/pharmaceuticals/inquiry/index.html

http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/08/20&format=HTML&aged=0&language=EN&guiLanguage=en

 

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