EU says patients pay £3bn more for medicines after drug firms block sale of generic versions

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The average delay for generic drugs to go on sale is seven months - and cost European health care systems around £3 billion

European patients had to pay some £3 billion more for medicines in 2000-2007 because pharmaceutical companies deliberately stalled the sale of cheaper generic versions, EU antitrust regulators revealed today.

An investigation of major pharmaceutical companies - including Pfizer Inc., GlaxoSmithKline and Sanofi-Aventis - 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 EU executive 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 percent of the cases, the EU said, although it would not name any specific drugs involved.

Drug companies also struck deals that limited how the generic versions could be sold, sweetened with payments of more than £200 million 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 percent 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 some £3 billion.

The European Union's 27 states spent £200 billion on medicines last year, or £400 per person. Most of that cost is carried by state health insurance programs.

EU Competition Commissioner Neelie Kroes told reporters that she hoped companies would change their ways.

She said: 'This matters greatly because more innovation and more affordable medicines would mean better lives and savings for patients ... and governments.'

She said the EU Commission would not hesitate to launch antitrust cases against companies that may have violated EU rules - even generic companies who took money to agree on curbing competition.

The EU is yet to charge any pharmaceutical company formally but regulators raided the offices of several drug makers in different EU states on Nov. 24.

Those raids are separate from Friday's report which is an outline of problems the EU sees in the pharmaceutical sector. A more detailed follow-up will be published in the spring.

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