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Pharmaceutical companies blocking generics

Many pharmaceutical companies appear to be using delaying or blocking tactics to prevent generic companies from marketing medicines, thus stifling innovation, the European Commission says in a preliminary report from its pharmaceutical sector antitrust inquiry.

The EC inquiry started in January 2008 to examine the reasons why fewer new medicines have been brought to market and why generic entry seemed to be delayed in some cases.

According to the findings, originator drug company practices are too focused on extending the life of older products and preventing generic competition, resulting in significant costs to healthcare systems, consumers and taxpayers and reduced incentives for developing new medicines.

The British Generic Manufacturers Association said: “Originators must live up to their promises. That means shifting their resources from their ad agencies and their lawyers into the laboratories. If they don’t, for all their arguments on the [pharmaceutical price regulation scheme], the NHS will keep paying too much for branded medicines and patients won’t get the new medicines they need.”

The report identifies a variety of methods by which companies are delaying or blocking market entry of generic companies, including filing large numbers of patent applications for the same medicine (known as “patent clustering”); readily resorting to initiating disputes and litigation with generics companies; concluding patent settlements that constrain market entry of generic companies; and intervening when generic companies request regulatory approvals.

The commission’s findings are now open for consultation until 31 January 2009, with a final report due to be published in spring 2009. It points out that until then it is unclear as to whether the apparent anti-generics practices adopted by some firms are in breach of the EC competition law.

Alan Davis, partner in the EU and Competition Group at Pinsent Masons, warned that there would be “no early and easy solutions to the perceived problems. . . . We might expect, however, this report to galvanise the Council of Ministers into pursuing structural and regulatory reform given the identified savings to the public purse that could be achieved through the purchase of more drugs from generic manufacturers.”

Citation: The Pharmaceutical Journal URI: 10040692

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