EU Says Drugmakers Blocked Cheaper Drugs

By Aoife White

BRUSSELS, Belgium -- European patients had to pay about 3 billion euros ($3.87 billion) more for medicines in 2000-2007 because pharmaceutical companies deliberately stalled the sale of cheaper generic versions, EU antitrust regulators said Friday.

An investigation of major pharmaceutical companies -- including Pfizer (PFE Quote), GlaxoSmithKline(GSK Quote) and Sanofi Aventis (SNY Quote) -- showed they had blocked or delayed generic drugs from entering the market to prevent losing revenue on their more profitable drugs, the European Commission said.

The drug companies used costly legal action to stall generic drug companies from making their own versions of medicines once patents had expired, the European Commission said.

It said they launched disputes, lawsuits and multiple patent applications for the same drug. In one case, 1,300 applications were filed.

Patent litigation lasted on average three years, and generic companies won some 60% of the cases, the EU said.

Drug companies also struck deals that limited how the generic versions could be sold, sweetened with payments of more than 200 million euros from the drug majors to generic rivals.

All in all, the EU said these tactics stopped a process where a drug's price typically falls 20% in the first year that a generic version becomes available.

The average delay for the generic drugs to go on sale was seven months, it said -- and cost European health care systems about 3 billion euros.

EU Competition Commissioner Neelie Kroes said in a statement that the preliminary investigation showed that new and more affordable medicines are "sometimes blocked or delayed at significant cost to health care systems, consumers and taxpayers."