The European Commission's investigation into how AstraZeneca protected its blockbuster ulcer drug Losec against competition, which could result in a massive fine for the company, has received the backing of an important internal scrutiny panel.

The Commission last year levelled two charges against the pharmaceutical company of anti-competitive behaviour after complaints from generic companies.

The Commission's internal review panel, which acts as an additional check in major competition cases has approved the investigation, paving the way for a final judgement, expected as early as October.

AstraZeneca could be fined up to 10% of its annual turnover if it is found guilty of abusing its dominant market position by using the patent and regulatory systems to block generic versions of Losec from coming to market.

In 2001, the Commission issued record E855.2 million (£529.5 million) fines against Roche and seven other companies that were found to have colluded on price fixing of vitamins.

AstraZeneca has vigorously denied any wrongdoing from the outset, and specifically countered claims that it misled national patent offices or abused national agency rules and procedures.

Launched in 1987, Losec was the biggest selling drug of all time by the late 1990s and gained extra patent protection from supplementary protection certificates (SPCs) in a number of EU countries.

SPCs were introduced in 1992, but only cover drugs that gained marketing authorisation in 1998 or later in Germany, Denmark and Norway. Despite this, AZ succeeded in gaining SPCs in these markets, which the Commission says the company achieved by concealing Losec's original 1987 marketing authorisation.

The second charge relates to the company requesting de-registration of its marketing authorisation for Losec capsules when its superseded the formulation with tablets.

Generic manufacturers are, in principle, reliant on the original marketing authorisation being in place to apply to market their own versions, and the Commission believes AstraZeneca abused this rule as a second loophole to block competition. De-listing also prevents parallel importers gaining licences.

The investigation began in February 2000 with raids on the company's offices in the UK and Sweden, but a final settlement could still be some years away, with any decision open to appeal at the European Court by AstraZeneca.

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Tuesday, February 03, 2004

pharmafocus@pharmafile.co.uk