UPDATE 3-EU antitrust regulators raid drugmakers

Tue Oct 6, 2009 1:04pm EDT

* Sanofi-Aventis, Teva, Novartis confirm raids

* One other company also raided - source

* Probe centres on delays in launch of generic drugs

(Adds confirmation Novartis generics unit raided)

By Foo Yun Chee and Ben Hirschler

BRUSSELS/LONDON, Oct 6 (Reuters) - EU antitrust regulators raided several pharmaceutical companies suspected of violating EU antitrust rules on Tuesday as they stepped up their crackdown on drugmakers seen as delaying the launch of cheaper medicines.

The raids are the latest in series of inspections by European regulators determined to get to the bottom of potentially illegal blocks on generics, which they suspect cost healthcare systems billions of dollars.

In her July report on the sector, European Competition Commissioner Neelie Kroes said she would not hesitate to go after drugmakers that cut deals with generics producers to hold back the introduction of less expensive unpatented medicines.

The European Commission estimates delays in generics pushed up consumers' bills by 20 percent between 2000 and 2007.

"I can confirm that the Commission started surprise inspections at several pharmaceutical companies on Oct. 6," spokesman Jonathan Todd said.

He said the Commission, the EU watchdog, had reason to believe the companies may have infringed EU competition rules that prohibit restrictive business practices and abuse of a dominant market position. He declined to name the companies.

France's Sanofi-Aventis (SASY.PA) confirmed that it had been raided and that it was collaborating with EU antitrust regulators.

Switzerland's Novartis (NOVN.VX) said the European Commission had visited offices of its generics unit, Sandoz, in France, but declined to comment on the nature of the investigation.

Teva Pharmaceutical Industries (TEVA.TA) said EU officials visited its Paris offices as part of a broader probe into uncompetitive practices within the French generic industry.

An industry source said one other drugmaker was believed to have been inspected.

The Commission's probe could open the door to action against individual companies, with the potential for large fines down the road.

The Commission is already probing France's Servier and some generics firms on suspicion of blocking a generic version of the cardiovascular drug perindopril from entering the market.

Servier, however, said it was not involved in the latest raids.

British drugmakers GlaxoSmithKline (GSK.L) and AstraZeneca (AZN.L), Switzerland's Roche (ROG.VX), Germany's Merck KGaA (MRCG.DE) and Bayer (BAYGn.DE), and Denmark's Novo Nordisk (NOVOb.CO) and Lundbeck (LUN.CO) all said they were not aware of any raids on Tuesday.

Sanofi-Aventis shares ended 0.9 percent up while the DJ Stoxx healthcare index .SXDP closed 0.4 percent higher.

EU officials first raided some of the world's largest branded and generic drugmakers in January 2008.

Settlement deals to limit the entry of generics, sometimes in exchange for payments from originator companies, have also come under fire in the United States, where the Federal Trade Commission puts the cost to consumers at $3.5 billion a year.

Drugmakers argue that most of the delays are down to regulatory and other bureaucratic issues, rather than deliberate action by companies.

(Additional reporting by reporters in Frankfurt, Zurich, New York and Copenhagen; editing by Simon Jessop)

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