Teva Pharmaceutical Industries Ltd., the world's biggest generic-drug maker, France's Les Laboratoires Servier and Slovenia's Krka Group d.d. have been raided by European Union regulators as part of an antitrust investigation.
The raids of the three drugmakers on Monday came as the European Commission is scheduled to release a report this Friday in Brussels on possible antitrust abuses in the pharmaceutical industry. The commission began that probe in January after raiding offices of GlaxoSmithKline Plc, AstraZeneca Plc, Sanofi- Aventis SA and several competitors.
The EU's review of the pharmaceutical industry is focused on whether research-based companies misuse patent rules and lawsuit settlements to keep less-expensive generics off the market.
"The commission isn't softening its approach," said Tony Woodgate, a lawyer at Simmons & Simmons in London. "The chances are they'll raid again if they want two or three antitrust cases."
The probe at Krka, eastern Europe's second-largest pharmaceuticals company, is about "potential abuses of intellectual property of originators and about their strategies, which prevent the generic-drug makers' entry into the market," the company said in a statement.
Petah Tikva-based Teva's British offices were visited this week and the drugmaker is cooperating with the European Commission, the EU's antitrust authority, the company said in a statement. Neuilly-sur-Seine-based Servier also said the company's offices were targeted by commission staff.
Spokesmen for Glaxo, Europe's largest drugmaker, Novartis AG, Sanofi, Merck KGaA, Novo Nordisk A/S, Boehringer Ingelheim, and AstraZeneca said they weren't aware of this week's raids.
While the latest raids weren't related to the upcoming report, the EU said in a statement Tuesday that information collected during the probe had enabled it to "draw conclusions on where commission action" would be appropriate.
As part of the industry review, the commission probed companies' intellectual-property rights, litigation techniques and settlements in patent disputes. The regulator may force companies to change their patent-related practices.
Under EU law, companies can also be fined as much as 10 percent of annual sales for breaking antitrust rules.
Tim Frazer, a partner at Arnold & Porter LLP in London, said the commission is concerned that companies are extending the duration of patents to prevent competition from generics.
Companies seek patents for so-called replacement therapies when the original patent is about to expire. They may broaden the use of drug or change its form, such as a liquid or capsule.
The EU is probing whether these moves are innovative or part of a company's strategy to stifle generic companies' products, Frazer said. Companies have argued that they use patents to improve their products, he said.
The EU is also probing whether patent-lawsuit settlements harm consumers. Innovative drug companies often file patent suits against generic companies to prevent them from getting regulatory approval for copies. Settlements involve research-based companies paying generic companies to keep their products off the market.
Teva and Barr Pharmaceuticals Inc., which it is buying, have settled three patent cases against it in the past week. In each of the cases, Teva said it would begin selling copies of the medicines before patents expire.
Last Wednesday, the companies agreed to pay royalties to Sanofi on generic versions of the allergy pill Allegra and hold off on selling copies of Allegra-D until 2009 and Nasacort until at least 2011. On Tuesday, they agreed to delay selling any more versions of AstraZeneca's Pulmicort Respules asthma medicine until December 2009.
