AstraZeneca raided in EC competition investigation

Europe's competition watchdog has raided a string of pharmaceutical companies including AstraZeneca over possible collusion in delaying the introduction of cheap, generic drugs.

AstraZeneca was the only company yesterday to admit to involvement in the inquiry – with regards to an ulcer and heartburn treatment called esomeprazole which the company sells branded as Nexium.

"We can confirm we are subject of inspections by certain competition authorities which relate to alleged practices regarding esomeprazole in Europe," a spokeswoman for AstraZeneca said yesterday. "We are co-operating with the authorities. AstraZeneca takes compliance with all laws seriously and has a fundamental commitment to doing business in an ethical and proper manner."

AstraZeneca was just one of several drugs companies subject to "unannounced inspections" by European and national regulators on 30 November.

The European Commission stressed that the raids were only a preliminary step in its investigations, and were not indications of guilt. But it said that its concerns, if born out, would constitute a violation of Europe's anti-trust rules which prohibit restrictive business practices.

The watchdog "has reason to believe" that the companies concerned "may have acted individually or jointly, notably to delay generic entry for a particular medicine", the Commission said in a statement yesterday.

European Union Competition Commissioner Joaquin Almunia backed up the commission's move in a speech in Brussels. "We have the responsibility to ensure that consumers are not charged unjustified bills for their medical needs," Mr Almunia said. "I will continue to enforce with determination competition rules in the pharmaceutical sector."

The competition authority's latest raids are part of a long-running European investigation into patent settlements in the drug industry.

Launching a series of investigations last January, the commission expressed concern that consumers' access to lower-priced medicines was being delayed or blocked "where an originator company pays of a generic competitor in return for delayed market entry of a generic drug".

Full patent protection does not run out until 2014 on Nexium – which was AstraZeneca's top-selling drug last year, grossing $5bn (£3.2bn) in worldwide sales. But "data exclusivity" expired in March – allowing rival drug companies to rely on AstraZeneca's research when filing for a licence to produce a generic copy of the drug (and take their chances with regards to the originator's intellectual property).

A number of companies in Germany and Spain have produced generic versions of esomeprazole in recent months. In Germany, AstraZeneca has sought injunctions against them, and the company is also defending against claims in other EU countries that the Nexium patents are invalid.

The raids this week are not AstraZeneca's first brush with Europe's anti-trust authorities. It has previously come under commission scrutiny for blocking or delaying market access to generic versions of its drugs and, in 2005, was ruled in breach of EU rules with regards to a similar drug called Losec and fined €60m (£51m).

Robert Vidal, at European law firm Taylor Wessing, said yesterday: "It is striking that the commission has chosen to initiate a new investigation and inflict more pain on the same company over a similar drug. The commission is confident that the law relating to 'market abuse' cases is on its side and it may be trying to make an example of companies like AstraZeneca in order to deter other companies from implementing similar practices."