Competition enforcement in medicine boosts innovation, report finds

competition enforcement in medicine
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A new report from the European Commission has found that active competition law enforcement renders medicines more affordable and inspires innovation.

The report, compiled in collaboration between the competition authorities of all 28 EU Member States, provides an overview of the rules governing mergers, antitrust and competition in the pharmaceutical sector since 2009, when an inquiry conducted by the Commission found that further action was needed to address product exclusivity in the industry. It will form the basis for future competition enforcement priorities in the sector.

By exerting judicious control of industrial mergers, antitrust rules and safeguarding prices, the report found, the EU’s pharmaceutical competition enforcement bodies were able to discourage practices which disincentivise innovation, such as forcibly delaying the entry into market of generic drugs. By preventing cross-business transactions which could compromise research and development or the creation of new medicines, authorities contributed not only to the range of innovation present in the sector, but also to an increased level of patient choice.

Since 2009 the European Commission and national competition enforcement authorities across the EU have investigated more than 100 cases of suspected unlawful practices, including:

  • Anti-competitive practices resulting in artificially elevated costs of medicines;
  • Market-sharing and price fixing;
  • Off-patent medicines sold for excessive prices; and
  • Pay-for-delay schemes, whereby a branded pharmaceutical manufacturer colludes with a generic manufacturer to keep the generic product off the market in exchange for a share of the brand’s profits.

Margrethe Vestager, Commissioner in charge of competition policy, said: “Giving European patients and healthcare systems access to affordable and innovative medicines is one of Europe’s main challenges and objectives. The report published today provides key insights into the valuable work that competition authorities across Europe are doing to ensure that pharmaceutical markets help achieve this goal. It is important that we continue giving a high priority to our work in this area.”

The report noted that, while competition enforcement in medicine had performed effectively overall, the pharmaceutical industry was still in need of vigilant oversight. It also suggested more needed to be done to ensure medicines remain reasonably priced and accessible to all EU citizens.

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