Tuesday, October 6, 2009

ECC Bares Its Teeth -- "Getting Tougher" on Agreements That Pay For Delayed Generic Entries

This afternoon, across Europe (but apparently concentrated in France), agents affiliated with the European Competition Commission conducted surprise raids of many pharmaceutical companies' European offices (background). Teva, Sanofi-Aventis and Sandoz all confirmed they were raided. Conversely, Bayer AG, GlaxoSmithKline PLC and Solvay SA confirmed that no agents had appeared at their doors. No word yet from Schering-Plough, Intervet, or Merck (doing business as MSD in Europe). Here's the ECC's press release, in full:

. . . .Antitrust: Commission confirms surprise inspections in the pharmaceutical sector

The European Commission can confirm that on 6 October Commission officials started surprise inspections at the premises of certain companies active in the pharmaceutical industry. The Commission has reason to believe that the provisions of the EC Treaty prohibiting restrictive business practices and/or the abuse of a dominant market position (Articles 81 and 82) may have been infringed.

During such inspections, Commission officials are accompanied by their counterparts from the relevant national competition authorities.

Surprise inspections are a preliminary step in the investigation of suspected anticompetitive practices. The fact that the European Commission carries out such inspections does not mean that the companies are guilty of anti-competitive behaviour nor does it prejudge the outcome of the investigation itself. The European Commission respects the rights of defence, in particular the right of companies to be heard in the Commission’s proceedings against them.

There is no fixed deadline to complete inquiries into anticompetitive conduct. Their duration depends on a number of factors, including the complexity of each case, the extent to which the undertakings concerned co-operate with the Commission and the exercise of the rights of defence. . . .

With over 200 agreements like these already in place, it seems clear that the ECC, and the DoJ are keenly interested in the potential for anti-competitive effects -- in delaying the entrance of generics into the European, or United States markets, respectively.

So, do stay tuned.

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