EU anti-trust authorities probe Johnson & Johnson, Novartis

(BRUSSELS) - European anti-trust investigators said Friday they have opened a probe into deals between drugs giants Johnson & Johnson and Novartis.

"The European Commission has opened an antitrust investigation, on its own initiative," Brussels said in a statement, checking "contractual arrangements between US-based pharmaceutical company Johnson & Johnson and the generic branches of the Swiss-based company Novartis."

The EU, which polices a single market of half a billion consumers, wants to check if the companies collaborated with "the object or effect of hindering the entry on to the market of generic versions of Fentanyl in The Netherlands," referring to a strong pain killer for chronic pain.

"I regard this sector as a priority in terms of enforcement of competition rules given its importance for consumers and for governments' finances," said Joaquin Almunia, EU competition commissioner.

"Pharmaceutical companies are already rewarded for their innovation efforts by the patents they are granted.

"Paying a competitor to stay out of the market is a restriction of competition that the commission will not tolerate," he underlined.

The commission stresses that the opening of proceedings does not prejudge the outcome, but as Almunia said, it has been firmly on the sector's back for the last couple of years.

The EU has been probing the sector repeatedly since a report showed that the number of new drugs reaching the market annually had dropped by over a third since 2000 and that people were being deprived of innovative, affordable and safe medicine.

Generic drugs are far cheaper -- the report said they cost on average 40 percent less two years after they enter the market -- and save patients and insurance firms money without compromising on effectiveness.

Among initial tactics often used to hold up generic entry, 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.