Global Processing

EU accuses drugmakers of blocking cheaper generics

December 1, 2008

As reported by Reuters, major drug companies are delaying or blocking the entry of cheaper generic medicines, pushing up bills for taxpayers and reducing the incentive for innovation, the European Commission announced recently. Competition Commissioner Neelie Kroes said preliminary results of a year-long probe showed competition in the pharmaceuticals industry "does not work as well as it should." Practices such as multiple patent applications for the same drug, litigation and settlement deals that delayed generics meant governments ended up paying billions of euros more than they should for prescription drugs. Drug companies said her report exaggerated the extent of delays to generics and failed to recognize the complexity of the market. The attack from the Commission -- the European Union''s executive arm -- adds to pressure on a beleaguered global drugs sector that faces loss of patent protection on some of its biggest selling products over the next four years. The industry also has big challenges in the United States, where incoming President Barack Obama is expected to seek ways to bear down on costs as he tries to extend healthcare coverage to millions of uninsured Americans.