AstraZeneca hit by Brussels inquiry into patent abuses

The European Commission has launched a competition investigation accusing AstraZeneca, the UK's number two drug manufacturer, of misleading and manipulating national governments to prolong patent protection for its biggest selling drug.

Documents taken in a raid on AstraZeneca's offices in 2000 showed the company had held back vital information from national patent offices to gain extended protection for its ulcer drug Prilosec, it was alleged yesterday.

Mario Monti, the EU competition commissioner, has charged that the company acted anti-competitively in its efforts to keep cheap copycat versions of Prilosec, known as "generics", off the market. At the end of the Nineties, Prilosec had become the world's best-selling prescription medicine ever, with sales of more than £10m a day.

Mr Monti said: "This is about suspected misuses of governmental systems and procedures which have the effect of blocking or delaying entry to the market of cheaper medicines, which involves savings for both health systems and patients."

AstraZeneca denied the allegations set out in the commission's formal "statement of objections", and promised to fight them all the way to the European Court of Justice. It said it was confident of disproving the allegations and refused to set aside any cash to cover potential fines.

The company expressed alarm that the commission was following an American precedent by treating patent misrepresentations and regulatory abuses as breaches of competition law. Article 82 of the EU Treaty outlaws actions "limiting production, markets or technical development to the prejudice of consumers".

The pharmaceutical industry has faced intense political pressure in the US to lower the cost of medicines through the early adoption of generic drugs.

AstraZeneca kept generic Prilosec from the giant US market for a year after a patent on the main ingredient expired in October 2001, by fighting a failed legal case alleging generics manufacturers infringed other patents on the way the drug is made. Prilosec sales are down by more than a half since generics arrived on the US market.

AstraZeneca is accused of falsely obtaining patent extensions on Prilosec in some EU countries under legislation which allows drug manufacturers to make up for the time lost between patenting a chemical and getting regulatory approval to launch.