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September 30, 2009

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Drug makers warned of antitrust probes

THE European Union's top antitrust official warned drug makers yesterday to "look out" for new investigations in coming months.

EU Competition Commissioner Neelie Kroes said regulators were capitalizing on a recent inquiry into the pharmaceutical sector that aimed to find out why generic versions of branded drugs were slow to come to the market and if innovation was being held back.

Drug makers say the European Commission is wrong to claim industry practices slow the rollout of generic drugs.

EU regulators said they would monitor deals between major and generic drug makers that could delay the sale of these drugs. So far, the EU executive has only launched one case on the back of its pharmaceutical report, investigating whether France's Les Laboratoires Servier struck deals with drug makers to hinder the launch of generic versions of its heart disease drug perindopril.

The EU says generic drugs are on average 40 percent cheaper than branded rivals two years after launch and play a key role in driving down health costs.

Speaking to the European Parliament's economy committee, Kroes defended a slew of EU antitrust fines.

"Firms also suffer from the higher costs if their suppliers form a cartel," she said. "Some fines are large, but they are always related to a company's turnover."

Cartel fines hit 2.27 billion euros (US$3.33 billion) last year and the EU has already levied fines of 1.27 billion euros this year.

Kroes said regulators calculate cartels cause consumers and suppliers to pay at least 7.6 billion euros extra, or 10 percent, for their products.


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