AstraZeneca Raided By European Antitrust Officials

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AstraZeneca Plc and other drugmakers were raided by European Union antitrust officials probing possible collusion and other anticompetitive behavior to keep cheaper copies of medicines off the market. Source: AstraZeneca via Bloomberg

AstraZeneca Plc, the U.K.’s second- biggest drugmaker, and Nycomed A/S were raided by European Union antitrust officials as part of a probe into whether companies colluded to keep cheaper copies of medicines off the market.

The European Commission said it raided the premises of “a limited number of” pharmaceutical companies that may have slowed the sale of generic medicines. AstraZeneca said inspections at its premises concerned the ulcer drug Nexium.

“We have the responsibility to ensure that consumers are not charged unjustified bills for their medical needs,” said EU Competition Commissioner Joaquin Almunia, in the text of a speech in Brussels today. “I will continue to enforce with determination competition rules in the pharmaceutical sector.”

Antitrust regulators on both sides of the Atlantic are focusing on how settlements between branded-drug makers and generic manufacturers might harm consumers. Makers of generics are vying for a share of the ulcer-treatment market after AstraZeneca lost European patent protection on Nexium sales in March. The pill had sales of $912 million in western Europe, out of a worldwide total of $3.74 billion, in the first nine months of this year.

The commission “has reason to believe” that the companies “may have acted individually or jointly, notably to delay generic entry for a particular medicine,” the EU executive, which declined to name the drugmakers, said in an e-mailed statement today. “This could be a potential violation of EU antitrust rules.” The raids took place Nov. 30, it said.

Delays to Generics

The commission said in a report last year that companies use a variety of techniques to delay “for as long as possible” the introduction of generics.

“This shows that the commission is serious in pursuing the issues it raised in its pharma-sector investigation,” Lesley Ainsworth, a partner in London with law firm Hogan Lovells, said by telephone.

AstraZeneca has an appeal pending at the EU’s top court against a 2005 decision by the commission to fine it for flouting antitrust rules to keep generic competitors off the market.

The commission “may be trying to make an example of companies like AstraZeneca in order to deter other companies from implementing similar practices,” Robert Vidal, a partner in the London office of law firm Taylor Wessing LLP, said in an e-mail.


“We can confirm we are subject of inspections by certain competition authorities which relate to alleged practices regarding esomeprazole (Nexium) in Europe,” AstraZeneca, based in London, said in an e-mailed statement. “We are cooperating with the authorities.”

AstraZeneca faced generic competition in Germany during the third quarter from companies including Teva Phamaceutical Industries Ltd. and Ratiopharm GmbH. Teva, the world’s biggest maker of generic drugs, agreed in March to buy Ratiopharm.

Yossi Koren, a spokesman for Petah Tikva, Israel-based Teva, declined to comment on the EU probe. Ratiopharm wasn’t visited by antitrust officials, said spokesman Markus Braun.

Two German sites of closely held Nycomed were raided by antitrust officials, Beatrix Benz, a spokeswoman for the Zurich- based company, said in an e-mail. The company will “fully co-operate with the authorities,” she said.

‘Big Deal’

“It’s almost impossible to know if this is a big deal or not,” Gbola Amusa, an analyst at UBS AG in London, said in a telephone interview today. “We don’t know what AstraZeneca has in their offices. We’ve seen big raids like this over the past decade, and they generally haven’t been linked to market underperformance.”

AstraZeneca yesterday won a U.K. ruling blocking Slovenian generic-drug maker Krka Group d.d. from joining a case filed by Ranbaxy Laboratories Ltd. over patents for the ulcer treatment.

Krka, Slovenia’s biggest drugmaker, said it wasn’t involved in the EU probe.

Drugmakers are “acutely aware” of antitrust rules, Andrew Witty, chief executive of GlaxoSmithKline Plc, said at a conference in Brussels today. Patents are “continuously being tested” in the courts and “that’s what keeps the system healthy.”

Glaxo wasn’t involved in the antitrust probe, said David Daley, a spokesman for the U.K.’s biggest drugmaker.

Amelia Torres, a commission spokeswoman, declined to comment beyond the statement. Colin Mackay, a spokesman for the European Federation of Pharmaceutical Industries & Associations, declined to comment.

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