EU investigates drugmakers over antitrust practices

* First antitrust cases under way

* More scrutiny on settlement deals by brandnames, generics

* Antitrust probes into Servier, some generics firms

By Foo Yun Chee

BRUSSELS, July 8 (Reuters) - EU regulators are investigating some drug companies over suspected antitrust practices that include deals with makers of cheap generics to delay medicines' market entry, the European Commission said on Wednesday.

In her final report of a probe into the pharmaceuticals sector, EU Competition Commissioner Neelie Kroes said delays in bringing cheaper generic medicines to the market had pushed up consumers' bills by 20 percent between 2000 and 2007. "We will not hesitate to apply the antitrust rules where such delays result from anti-competitive practices," Kroes, who is tasked with ensuring fair play in the 27-country European Union, said in a statement.

"The first antitrust investigations are already under way, and regulatory adjustments are expected to follow dealing with a range of problems in the sector," she said. The Commission statement did not identify any companies under investigation.

But separately, the EU's executive arm announced an antitrust investigation into privately owned French drugmaker Servier and generics firms Krka d.d, Lupin Limited, Matrix Laboratories Ltd (MAXL.BO), now a unit of Mylan Inc (MYL.O), Niche Generics Ltd, part of Unichem Laboratories Ltd, and Israel's Teva Pharmaceutical Industries Ltd (TEVA.O).

The Commission said its investigation concerned unilateral behaviour by Servier and agreements which may have blocked the entry of generic perindopril, a cardio-vascular medicine originally developed by Les Laboratoires Servier, into the European Economic Area.

Kroes launched her sector investigation in January 2008 with a series of raids on makers of brand-name drugs, including AstraZeneca (AZN.L), GlaxoSmithKline (GSK.L), Pfizer (PFE.N), Merck (MRK.N) and Sanofi-Aventis (SASY.PA).

There were also raids on generic drugmakers suspected of colluding to delay the entry of generics, sometimes in exchange for payments from originator companies.

Settlement deals have also come under fire in the United States, with the Federal Trade Commission last month estimating the cost to consumers at $3.5 billion a year. [ID:nN233221] Legislation pending in the U.S. Congress would ban such deals.

Drugmakers blame most of the delays on regulatory and other bureaucratic issues, rather than deliberate action by companies.

The Commission said it would step up scrutiny of settlement deals to see if they comply with strict EU competition rules.

"To reduce the risk that settlements between originator and generic companies are concluded at the expense of consumers, the Commission undertakes to carry out further focused monitoring of settlements that limit or delay the market entry of generic drugs," it said.

The EU executive said it would examine current EU rules on price and reimbursement, urged European countries to introduce legislation to facilitate the entry of generics and stress the need for a Europe-wide patent.