EU demands patent papers in pharma probe

(BRUSSELS) - The European Union's competition regulator demanded Tuesday to see a "selected number" of patent deals reached by pharmaceutical companies as part of a sector-wide probe into generic medicines.

The European Commission said that "on the basis of EU antitrust rules, it addressed requests for information to certain pharmaceutical companies asking them to submit copies of their patent settlement agreements."

Brussels wants patent settlements reached between originator and generic pharmaceutical firms from July 2008 to the end of 2009, notably those where "an originator company pays off a generic competitor in return for delayed market entry of a generic drug."

The commission, which polices competition in the EU, said its probe into the multi-billion euro sector had found that some settlements might deprive consumers of a broader choice of medicines and at lower prices.

According to commission figures, each European citizen spent an average of 430 euros (622 dollars) on medicine in 2007. The market for medicines was worth some 214 billion euros at retail prices.

Brussels did not identify the companies involved, saying only that "a selected number" had received requests for copies of these deals.

"We need to monitor this type of agreement in order to better understand why, by whom and under which conditions they are concluded," said outgoing Competition Commissioner Neelie Kroes.

"The monitoring will also provide us with the possibility to act should this become necessary."

Her services said they would analyse the details and request more specific information if necessary. The regulator also threatened to repeat the process each year until the problem is addressed.

The demand is part of an investigation announced in July into the relationship between companies that patent their products as brand-named medicine, as well as their ties with generic drug producers.

According to a commission report produced in the summer, generic drugs cost on average 40 percent less two years after they enter the market and save patients and insurance firms money without compromising on effectiveness.

But some companies have in the past been accused of using patent strategies to stop generic medicines hitting the market, or tying up potential competitors in legal disputes.

Among the tactics often used, drug developers were found to file multiple patent applications for the same medicine, leaving little scope for generics to be developed.

In the worst example uncovered, 1,300 separate filings were made for a single medicine across the 27-nation EU.

In another tactic, drug companies were found to often launch patent litigation against potential rivals -- nearly 700 cases were found -- slowing down their entry to the market.

On average, such cases would drag on for three years. Most were lost by the company that developed the original drug. Some 200 were settled out of court.