Page last updated at 16:08 GMT, Wednesday, 8 July 2009 17:08 UK

EU probes firms over drug delays

Worker in factory
The Commission sees a decline in the rate at which new drugs appear

The European Commission says it has launched anti-trust investigations into drugs firms over costly delays in introducing cheaper generic drugs.

Among them is the French pharmaceutical firm Servier, suspected of colluding with several makers of generic drugs.

The Commission says it has found a gap of more than seven months between patents expiring and the appearance of generic drugs on the market.

The delays push up healthcare costs in the EU, the Commission says.

"We must have more competition and less red tape in pharmaceuticals," EU Competition Commissioner Neelie Kroes said on Wednesday.

Her team has produced a report on generic medicines, which says drugs firms are using "a variety of instruments to extend the commercial life of their products without generic entry for as long as possible".

The Commission says the delays matter because generic drugs are generally 40% cheaper, two years after market entry, than the original patented drugs.

Plea for EU patents

Drugs firms defend their actions by pointing to their considerable investments in research and development - necessary to test the reliability of new drugs.

France's Servier makes the cardiovascular medicine perindopril. The commission suspects it struck a deal with several generics firms: Krka, Lupin, Matrix, Niche Generics and Teva.

The EU report also stressed "an urgent need" for an EU-wide patent system and "unified specialised patent litigation" in Europe.

It criticised the wasteful duplication of patent court cases in EU member states, noting that in 11% of such cases national courts "reach conflicting judgements".

Generic drug companies - which sell cheaper versions of drugs once the patent has expired - have long complained that it is difficult to get their drugs to market in Europe.

The Commission can impose large fines on drug companies if they engage in anti-competitive practices.

In 2005, AstraZeneca was fined 60m euros for blocking cheaper rivals to Losec, its heartburn and ulcer pill.

The Commission says it is also examining why there is "a decline of novel medicines reaching the market".

The British Generic Manufacturers Association (BGMA) welcomed the EU findings, saying the delays "increase NHS [National Health Service] costs without any benefit to patients and limit access to medicines".

Generics account for 64% of all medicines dispensed by the NHS, yet they cost only 29% of the NHS drugs bill, the BGMA says.

The average cost to the NHS of a generic drug is £4.62 (5.3 euros; $7.5), compared with £20 for a branded medicine, the BGMA adds.

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