AstraZeneca Hit By EU Collusion Claims
AstraZeneca Hit By EU Collusion Claims [Daily Mail, London]
From Daily Mail (London, England) (December 4, 2010)
Dec. 04--AstraZeneca has been raided by European Union investigators amid allegations that the drug giant colluded with rivals to prevent cheaper medicines hitting the market.
The competition officials swooped on a number of Astra’s European offices in a series of coordinated raids across the pharmaceutical industry this week.
Shares in the Anglo-Swedish giant dropped 11.5p to 3,053p after it emerged that the investigation centres on its best-selling heartburn pill Nexium.
The Commission said it Ohas reason to believe that the companies concerned may have acted individually or jointly, notably to delay generic entry for a particular medicine’.
When a drug loses its patent protection other medicine makers are free to manufacture copycat versions, causing prices to plummet.
But the Commission suspects that some pharma companies have been breaking the rules by seeking to delay the arrival of these generic competitors.
OIf confirmed, this could be a potential violation of EU antitrust rules that prohibit restrictive business practices,’ the Commission said.
The EC, which acts as a competition watchdog across the economic bloc, declined to name the companies involved. But GlaxoSmithKline said it had not been visited by the anti-trust officials.
Astra denies any wrongdoing. But if found guilty, it could expect to land a hefty fine and could also be hit with a bevy lawsuits from health authorities across the EU.
A scathing report from the Commission last year found that delays to generic drugs cost healthcare authorities, such as the National Health Service, billions of pounds a year.
Consumer goods giant Reckitt Benckiser recently landed a UKpound10.2m fine for overcharging the NHS by rigging the market for its heartburn medicine Gaviscon. The Nexium raid was not the first time Astra has found itself in the EU’s spotlight. Five years ago it was found to have breached EU rules after attempting to delay generic versions of Losec, the predecessor to Nexium. It was fined UKpound51m although this was later reduced to UKpound45m.
A spokesman said: "We can confirm we are subject of inspections by certain competition authorities which relate to alleged practices regarding esomeprazole (Nexium) in Europe.’ The company is Ocooperating with the authorities’, the spokesman added.
Nexium was the biggest seller in the Astra stable last year with sales of UKpound3.2bn, although it has since been eclipsed by cholesterol buster Crestor.
Nexium has lost its patent protection in a number of EU countries but few generic versions have so far emerged.
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Posted: December 2010