The 2008 EC Sector Inquiry Regarding Pharmaceuticals: What Does It Mean from a Research-Based Company Perspective?

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Kent Bernard, Nov 12, 2008

A sector inquiry is never pleasant for the sector involved. It is much like going to the dentist for a checkup. The best possible result is that after all is said and done, nothing was wrong and life can go on. Well, this checkup began with a bang. On January 16, 2008, the European Commission launched a sector inquiry by staging a series of dawn raids on a number of pharmaceutical companies, with no suggestion of specific wrongdoing. The expressed reasons for the inquiry are puzzling. Commisioner Kroes stated that: “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.” There are many reasons for the lack of new innovative drugs in the European Union low reimbursement levels and insistent tolerance for diversion/parallel trade come quickly to mind. But it would be very strange indeed if major manufacturers were getting together to not innovate. There is no way for research-based drug companies to survive except by coming up with new drugs. If this is truly the target, then the inquiry is off base. Let’s see what else could be going on.