(BRUSSELS) - The European Commission said Wednesday it had launched an antitrust probe into the pharmaceutical industry on concerns about uncompetitive behaviour in the sector.

The European Union's top antitrust watchdog said it was carrying out unannounced inspections at "innovative and generic pharmaceutical companies" to look for evidence that competition was being stifled.

Concerned about a dwindling flow of new drugs and delays to generic products coming to the market, the Commission's probe aims to determine if patent settlements between firms break EU competition rules.

EU regulators are also to look into whether drug companies illegally thwart the entry of rivals into their markets with artificial barriers such as misuse of patent rights or litigation.

"Individuals and governments want a strong pharmaceutical sector that delivers better products and value for money," EU Competition Commissioner Neelie Kroes said.

"But if innovative products are not being produced, and cheaper generic alternatives to existing products are in some case being delayed, then we need to find out why, and if necessary, take action," she added.

The Commission is to initially report back on its findings in the second half of the year and final results are expected in the first half of 2006.

EU regulators use such sector-wide investigations, which have in recent years also targeted the telecoms, energy and financial services industries, to gain a better understanding of the markets in order to open specific cases against companies if deemed necessary.

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