Brussels, 16 January 2008
Competition Commissioner Neelie Kroes said: "Individuals and governments want a strong pharmaceuticals sector that delivers better products and value for money. But if innovative products are not being produced, and cheaper generic alternatives to existing products are in some cases being delayed, then we need to find out why and, if necessary, take action."
Unlike cartel cases, where the Commission carries out inspections when it has indications that specific companies have committed competition law infringements, these inspections are not aimed at investigating practices of companies which the Commission has already positive indications of wrong-doing. They are just the starting point of this general sector inquiry and aim to ensure that the Commission has immediate access to relevant information that will guide the next steps in the inquiry. The kind of information the Commission will be examining, such as the use of intellectual property rights, litigation and settlement agreements covering the EU, is by its nature information that companies tend to consider highly confidential. Such information may also be easily withheld, concealed or destroyed. This is why inspections have been considered appropriate.
Innovation in the pharmaceutical sector is driven by patents and other intellectual property rights, and the inquiry will be conducted taking into account these existing rights. The Commission's action will therefore complement, not challenge, intellectual property law, as both systems share the objectives of fostering innovation, and increasing consumer welfare. The inquiry will also take due account of the specificities of the relevant regulatory frameworks. It will not in any way put into question the various health schemes in force in the Member States. The inquiry is limited to medicines for human consumption.
To carry out the inquiry, the Commission can use a wide range of investigative tools to gather information from companies and trade associations, including requests for information. During the inquiry, the Commission will maintain an open dialogue with all stake-holders, and will keep the sector informed about progress.
Background on sector inquiries
Sector inquiries are investigations that the European Commission may decide to carry out into sectors of the economy, when a sector does not seem to be working as well as it should. The Commission uses the information obtained in the inquiry to better understand the market from the point of view of competition policy, as analysed in its report on the sector. Should there be grounds for doing so, the Commission may – at a later stage - assess whether it needs to open specific investigations to ensure the respect of Community rules on restrictive agreements and abuse of dominant position (Articles 81 and 82 of the EC Treaty).
More information on the Commission’s previous sector inquiries is available at:
See also MEMO/08/20.