Euro Soul-Searching on Competition - Pharmaceutical Executive


Euro Soul-Searching on Competition

Pharmaceutical Executive

A few firms directly in the firing line are having to spend still more time and money defending themselves. Lundbeck is being quizzed for questionable practices to defend Citalopram. Servier is under investigation not only for potentially dodgy deals to protect Perindopril, but also for allegedly supplying the Commission with misleading information during the inquiry. Sanofi-Aventis, Novartis/Sandoz, Teva, Ratiopharm, and a scattering of small generics firms have also come under scrutiny. The Commission doesn't say they are guilty—but doesn't say when it might pronounce them innocent, either. And the companies themselves are keeping their heads well down.

The Commission's guns-blazing intervention has left every patent holder—even those who have emerged without so much as a flesh wound so far—with an uncomfortable sense of insecurity, since, as the Commission repeatedly makes clear, the whole thing could start up again any time. That explains in part the reluctance of even the most outspoken industry executives to go public on what they think about it all; to say too much might be to precipitate a new visitation.

The generics industry claims that the Commission inquiry vindicated its own longstanding complaints about obstructionism from patent holders, and confirmed the existence of inefficiencies in the European patent system. This, in turn, says the European Generic Medicines Association, put pressure on the European Patent Organization to tighten up its controls. But there is still no evidence of faster generic market access—and generics companies continue to complain.

For its part, the European Patent Organization (which is quite separate from the European Commission, and actually issues patents) self-righteously maintains that long before the Commission inquiry started, it was in any case reforming its procedures to limit the opportunities for patent holders to extend protection through filing dubious patent extension claims. Some additional controls will take effect this month, but the EPO resists the suggestion that its procedures have been seriously inadequate until now. Its officials privately murmur that the Commission didn't focus its inquiry very accurately—and consequently came up with only the most limited findings that didn't generate any real change.

The Commission, meanwhile, is still trying to save its honor after more or less admitting that it was wrong in its initial suggestions that patent holders were the key villains in holding up generic launches. It finally had to acknowledge what patent holders argued throughout the inquiry—that the obstacles arising from regulation cannot be ignored in exploring barriers to generics getting onto the market—or indeed to innovation. As a small gesture of appeasement, the Commission is now reviewing its legislation on how national drug pricing systems function, in the hope that this could help cut through some of the red tape, for generics and even for new drugs.

The inquiry was, of course, only one of many factors and forces influencing the European environment for pharmaceuticals—and for relations between patent holders and generic firms. In recent months, a final judgment has emerged from the European Court of Justice on a much older case, confirming that AstraZeneca misused regulatory procedures and made misleading representations to patent offices in a bid to protect Losec. There is a ceaseless series of national actions, in court or with national regulators, on the limits to patent protection. And big changes have taken place at the top level within the European Commission too. The abrasive Kroes has been replaced as competition commissioner by the more phlegmatic Joaquín Almunia—who feels less compulsion to pursue Big Pharma, especially since the focus of the Commission as a whole in the fiscal post-crisis world is on boosting recovery through innovation. Overall, therefore, even the most aggressive generics lobbies are not certain when or how more cases will be launched—and nor are the most optimistic patent holders confident that none will ensue.

It is, as one industry executive wryly commented, a typical European result. Lots of talk, lots of time wasted, and not much to show for it.

Reflector is Pharm Exec Europe's anonymous columnist, a commentator so close to the action in Europe that his identity must remain secret.


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