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European Union Regulators Raid Drug Makers on Suspected Antitrust Abuse

Thu, 10/08/2009 - 5:41am
BRUSSELS (AP) — Sanofi-Aventis SA, Novartis AG and Ratiopharm International GmbH said Wednesday that EU regulators had carried out surprise raids at their French offices as part of an antitrust probe. The European Commission on Tuesday said it had visited the offices of several pharmaceutical companies that it did not name as part of an investigation into suspected monopoly abuse and restrictive business deals. The raids also follow a July warning from the EU's top antitrust official, Neelie Kroes, that major drug makers face a wave of antitrust investigations. The EU concluded a broad inquiry into the pharmaceutical sector by saying that drugs companies are deliberately stalling cheaper generic versions of their own medicines once exclusive patents expire. If regulators find proof to confirm suspicions, the next step is to charge the companies with antitrust abuse and hear their defense before taking a decision to fine them up to 10 percent of their global annual turnover. The Commission said the inspections did not mean the companies were guilty of anticompetitive behavior. A spokesman for Switzerland's Novartis, Eric Althoff, said Tuesday that EU officials had visited the premises of its generics unit Sandoz in France. He said the company was fully cooperating with authorities. France's Sanofi-Aventis was also targeted by the probe, spokesman Jean-Marc Podvin said, adding that the company was also cooperating with the authorities. Germany's Ratiopharm also said its French unit was searched. Until now, the EU has only gone public about one other investigation involving France's Les Laboratoires Servier for hindering the launch of generic versions of its heart disease drug perindopril. Regulators said they suspected that Servier did deals with generic rivals Krka, Lupin, Matrix, Niche Generics Ltd and Teva to hold back cheaper versions. The EU says generic drugs are on average 40 percent cheaper than their branded rivals two years after they launch. It warned that it knew of at least 200 settlement agreements — some including payments to delay drug launches — between generic and brand-name drug makers that could restrict the rollout of generic versions.
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