Drugs firms raided after competition inquiry is launched by the EU

The European Commission is getting tough in its quest to find out if big pharmaceutical firms acted illegally to stop new drugs hitting the market

Rory Watson in Brussels
Some of the world’s largest pharmaceutical companies were raided early yesterday as the European Commission launched a wide-ranging inquiry to determine whether they were acting illegally to prevent new drugs from coming on to the market.
Announcing the investigation, Neelie Kroes, the Competition Commissioner, said: “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.”
Companies that found EU and national competition inspectors on their doorsteps yesterday included Pfizer, GlaxoSmithKline, AstraZeneca, Johnson & Johnson, Merck & Co and Sanofi-Aventis.
Ms Kroes insisted that the inspections were not targeting companies suspected of wrongdoing, but were the starting point of a broad inquiry into the pharmaceutical sector to uncover information about intellectual property rights and litigation and settlement agreements. The investigation is expected to last more than a year.
“By its nature, this is information that companies tend to consider highly confidential,” Ms Kroes said. “Such information may also be easily withheld, concealed or destroyed. That is why we decided that inspections were necessary.”
AstraZeneca, which the Commission fined ¤-using the patent system to delay market entry of rivals to its ulcer drug Losec, confirmed that it was part of the sector inquiry and was “co-operating fully”.
The company, which has lodged an appeal against the fine, said in a brief statement that the inquiry “relates to the introduction of innovative and generic medicines for human consumption on to the market and covers commercial practices, including the use of patents”.
Commenting on behalf of the sector, the European Pharmaceutical Federation said that it hoped “this inquiry will enable the Commission to better understand the nature and process of innovation in the pharmaceutical sector and the importance of intellectual property rights in driving pharmaceutical innovation”.
The Commission has already launched similar inquiries into other areas — telecommunications, energy and financial services — to establish how companies in a particular sector behave, to determine whether EU competition rules are being flouted.
Ms Kroes said that she had chosen her latest target because she was determined to use her antitrust powers to solve problems that make a difference to the lives of individuals.
“Few things make more of a difference than this,” she said, pointing out that about € 200 billion (£149.4 billion) is spent on medicines in the EU every year — the equivalent of € 400 for every man, woman and child.
“Without new pharmaceuticals, the quality of some medical treatments will stagnate,” she said. “Without generic products, the cost of some medical treatments will remain high.”
The Commission justified its claim that market forces were not operating satisfactorily by noting that the number of novel medicines being placed on the market was declining. Between 1995 and 1999, an average of 40 novel molecular entities were launched annually. The figure was 28 over the next five years. To try to reverse the trend, the Commission and the European pharmaceuticals industry launched an innovative medicines initiative last month in the hope of increasing public and private funding for drug research.
Industry sources maintain that apart from the high cost and time involved in developing new products, European manufacturers also face tougher regulatory burdens than competitors in the US or in emerging economies such as India.
Ms Kroes’s decision to turn the spotlight on the pharmaceutical sector using her antitrust powers follows an announcement on Monday of a new investigation into Microsoft’s business practices, after the Commission had received complaints that the company was unfairly penalising competitors.
Pill box
— 28 new types of drugs went on sale between 2000 and 2004, far fewer than the 40 that hit the market from
— 1995 to 1999 AstraZeneca was fined ¤60 million for filing misleading information to patent offices to delay generic versions of its ulcer drug Losec for most of the 1990s

Generic Drugs Are Saving Money for Seniors in Medicare Part D

Written By: Karina RollinsPublished In: Health Care NewsPublication Date: February 1, 2008Publisher: The Heartland Institute
Generic Drugs Are Saving Money for Seniors in Medicare Part DWritten By: Karina RollinsPublished In: Health Care NewsPublication Date: February 1, 2008Publisher: The Heartland Institute

The use of generic medicines is bringing down costs in Medicare's Part D prescription drug program, and Congress is considering a proposal to require pharmacies to use generics unless a doctor can prove brand-name drugs are medically necessary.
But analysts suggest the law might not be needed, because pharmacies already use generics whenever possible.

A November 14 report by the U.S. Department of Health and Human Services' Office of the Inspector General on the use of generic medicines in Medicare's Part D prescription drug program showed significant cost savings.

Previous estimates had projected the program would cost the federal government $59 billion in 2006, the first year of the Part D program. The report notes costs in 2006 were an unexpectedly low $47 billion.

Generic drugs cost up to 71 percent less than their brand-name counterparts. According to the report, whenever generic equivalents to brand-name drugs were available, they were prescribed 88 percent of the time. Of all Part D prescriptions, 56 percent were filled with generic drugs.

Thirty-seven percent of prescription drugs used by Part D beneficiaries do not have a generic substitute.

Promise of Generics
Sen. Herb Kohl (D-WI), chairman of the Senate Special Committee on Aging, requested the report on use of generic drugs in January 2006.
"Generics, which cost a fraction of their brand-name counterparts, are a big part of the solution to health care costs that are spiraling out of control," Kohl stated in a November 14 news release. "When generic drugs are dispensed under Medicare Part D, it's a win-win for America's seniors and for the federal budget."

Kohl stated, "This report is promising, but there is more to be done to make sure affordable generic drugs are made available whenever possible to our seniors."
In January 2006, Kohl introduced the Generics First Act (S. 28), which would require all Part D prescriptions to be filled with a generic drug unless a doctor determines the brand medication is medically necessary. At press time, the bill was still pending.
Problem with Legislation

But some argue a generic-drugs mandate is no cure-all for high prices.
"Given that standard procedure at nearly all pharmacies already involves substituting generics, it seems unlikely this will produce significant savings for anyone," said Eli Lehrer, a senior fellow at the Competitive Enterprise Institute. "It really just affirms the status quo and may create a lot of unnecessary paperwork."

Medicare Part D Gap Coverage Now Available

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2007 Medicare Part D - Doughnut Hole Calculator

Try one of our examples or your own scenerio ->Example 1 illustrates how the doughnut hole (coverage gap) works when the beneficiary only has monthly Rx costs. Example 2 showns that if the same monthly costs are paid on a quarterly basis, the total retail costs do not change, however, when one enters and leaves the coverage gap does changes. Example 3 shows an example of how to enter you medication costs if they are not consistent.
Examples1. Monthy Rx Costs only2. Quarterly Rx Costs only3. Combination of Rx CostsYour Own Rx Cost Scenerio
OR Enter Your Average Prescription Drug Costs:*
This is the actual retail cost of your covered prescriptions.Do not include non-covered prescriptions or non-prescription medications (ex: asprin or over-the-counter vitamins). We will add all of these costs together to determine your total annual retail prescription costs. Since we do not know when you are making these non-regular purchases, we will place these payments starting in month 1. You can find these values on your regular medicare part d statements or if you already know the annual costs, just enter the value in the annual costs field.
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SPAM Filter Activated? If you would like to have our Newsletter properly delivered, please add our email information (Team@NimBroker.com) to your SPAM Filter, Contact List, Sender List, or Address Book.This Medicare-PartD.com Doughnut Hole calculator is based on the 2007 CMS Standard Benefit Medicare Part D plan and designed to estimate when a Medicare Part D beneficiary would (1) enter and exit the coverage gap and (2) the potential prescription costs for the year. The actual time when a Medicare Part D beneficiary enters the Doughnut Hole and the costs associated with the plan may vary depending on the chosen Medicare Part D plan.
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Discount drugs

More Generics Slow Rise in Drug Prices

By STEPHANIE SAUL
Published: August 8, 2007
A quiet coup is taking place in American medicine cabinets. Prescription bottles bearing catchy brand names like Zoloft and Flonase are being pushed aside by tongue-twisting generics like sertraline and fluticasone propionate.


Discount Generics

Medicare plan increases use of costly drugs

By Kim Dixon
Wed Aug 1, 10:25 AM ET

CHICAGO (Reuters) - New prescription drug coverage in the federal Medicare insurance plan for the elderly drove a boost in use of pricey brand-name drugs such as statins and ulcer medications, an analysis released on Tuesday said.

Medicare Part D Alternative

Medicare mistakes costing many seniors

By ELLEN GABLER
egabler@journalsentinel.com
Posted: July 18, 2007
For the past year and half, Betty Ives has watched her Social Security checks shrink as the government deducts premiums for prescription drug coverage she is not receiving. Ives estimates she is out more than $1,000, and has been unable to get anyone to solve her problem.

Medicare Part D Alternative

Canadian drug flow subsides

U.S. companies fight imports
Posted by the Asbury Park Press on 07/8/07
BY JAMES W. PRADO ROBERTS
STAFF WRITER

New Jersey has the highest concentration of pharmaceutical companies in the world, but Surf City senior citizen Anne D. Duney can't stand the price of drugs at her local pharmacy.

She found a cheaper route: Canadian pharmacies.

Locally, a three-month supply of her medication costs $682. That's almost double the cost charged by a Princeton Junction-based Web site, Medications4Less.com, that allowed Duney to fill her prescription in Canada.

The difference in price is "just an enormous amount of money," said Duney, a retired bank employee.

The New Jersey Division of Consumer Affairs, which licenses state pharmacists and pharmacies, tried the Web site, too. It was less than impressed.

Medications4Less was closed by a judge in April following a sting operation by Consumer Affairs.

Although other states legally order drugs from Canada, New Jersey officials contend federal law bars Canadian pharmacies from shipping drugs to customers in the United States. They also said the company in British Columbia, Canada, that filled Duney's prescriptions, Ultra Care Pharmacy Ltd., wasn't licensed in New Jersey, and that it filled prescriptions incorrectly.

"The pharmaceutical industry would find it absolutely galling to have a Canadian export business right within their own hub in New Jersey," said Craig Holman, a lobbyist for Public Citizen, a Washington, D.C., consumer activist organization. "The industry is trying to do its best to get the government to enforce the law."

Acting Consumer Affairs Director Stephen B. Nolan declined an interview request, but his investigation is just another tear in the now-tattered Canadian drug export business.

Although Canada and most other developed countries strictly control drug prices, the U.S. pharmaceutical industry has successfully fought price controls and protected itself from imports, Holman said. Until last year, Holman noted, the U.S. Department of Homeland Security was seizing medicine mailed from Canada to U.S. patients.

"It's so unfair," Duney said. "You'd think you'd get your prescriptions here cheaper because the drugs are all made here."

When Congress created a Medicaid drug insurance plan in 2003, it also explicitly outlawed the reimportation of American-made drugs to consumers. Combined with other state and federal efforts to shut down exports from Canada, and measures taken by pharmaceutical companies themselves, the Canadian pharmacy export boom has turned into a bust.

For Canadian drug exporters, business fell to $186 million last year, a 60 percent drop from its 2004 peak, according to drug market researcher IMS Health of Connecticut.

"It's every man for himself," said David Mackay, the former executive director of the Canadian International Pharmacy Association.

For safety reasons, the U.S. Food and Drug Administration says, Duney and thousands of others like her should get their drugs from American pharmacies.

In most cases, the FDA says, U.S. regulators haven't signed off on the safety of the drugs, and they could be mishandled during shipment. Officials are also worried patients may be given dangerous, even deadly, counterfeits.

None of which matters to Duney, who believes that Canadian regulators are just as good as those in America. Many agree with her — in September, a Wall Street Journal poll found that 84 percent of respondents felt the drug import ban only increases pharmaceutical companies' bottom lines.

"If we're breaking the law, they're making us do it," said Duney, who has lived on Long Beach Island since 1959.

The shuttering of Medications4Less didn't stall Duney for long. She said one of her neighbors found her another low-cost Canadian pharmacy that has since refilled one of her prescriptions.

Highest retail prices


Americans make up more than 40 percent of the global pharmaceutical market, spending $275 billion on drugs in 2006, according to IMS Health. Those who pay retail for brand-name prescription medicine in this country pay the highest prices in the world.

In May, the new Democrat-controlled Congress was expected to push against the pharmaceutical lobby, but nullified a key measure that would have allowed importation of drugs from Canada and other countries, as long as the pharmacies were inspected by the FDA.

"The fact is, miracle drugs perform no miracles for people who can't afford them," U.S. Sen. Byron L. Dorgan, D-N.D., said when he introduced the legislation in January.

The business of shipping drugs from Canadian pharmacies exploded in 2003 when Americans combined their new confidence in buying over the Internet with Canadian price controls and a weak Canadian dollar.

Concerned that Canadian imports would weaken U.S. sales, many American pharmaceutical companies began to refuse to ship drugs to Canadian pharmacies that mailed them to U.S. customers.

That left Canadian pharmacies searching for resellers in other countries. Now the majority of drugs shipped to the United States by many pharmacies north of the border are obtained from other countries in Europe and elsewhere, said Mackay, the former head of the Canadian International Pharmacy Association.

The difficulties in obtaining new suppliers wiped out many Canadian Internet pharmacies, Mackay said. With the increasing value of the Canadian dollar and the Medicare prescription plan that took effect in 2006, the number of Canadian pharmacies that sell over the Internet to the United States has dropped from some 300 to around 50, said Mackay, who still has contacts in the industry.

But even at its peak, the Canadians had just 2 million customers in the United States, according to Mackay.

"We always wondered why the fuss for a half a percent of the market? Maybe it was all about what it could become, not what it was," Mackay said.

The fuss was clear to the FDA and the pharmaceutical industry.

Last August, the FDA warned consumers not to buy or use prescription drugs from two Canadian companies because testing had found that 10 drugs, including the cholesterol drug Lipitor, the osteoporosis drug Actonel and the breast-cancer drug Arimidex had been faked.

"It is frightening to think what could happen to a patient," if an international pharmacy shipped mislabeled or poorly made drugs into the country, said Hollie Gilroy, spokeswoman for the HealthCare Institute of New Jersey, the state's pharmaceutical lobby.

In addition, New Jersey, home to the headquarters of 18 leading pharmaceutical companies, benefits from the drug prices in the Unites States, Gilroy said.

Much of that income is spent developing new drugs and benefits the local economy. The economic impact of pharmaceuticals in New Jersey totaled $26.5 billion last year and resulted in the employment of almost 150,000 people, according to the HealthCare Institute.

"Here in the United States, there is a recognition that the brand name manufacturer does provide a service in discovering the drugs . . . and our government rewards that activity," Gilroy said.

Nevertheless, a number of states actively encourage or allow their residents to buy prescription drugs from Canada or elsewhere, including Nevada, Illinois, Wisconsin, Kansas, Missouri and Vermont.

Asked why Illinois considers their effort legal under federal law, a spokeswoman for that state's Department of Healthcare and Family Services said, "The federal government has never taken legal action against an individual for importing prescription drugs."

The AARP, the nation's largest advocacy organization with 38 million members, supports the importation of drugs from abroad — but only with FDA oversight.

"In the meantime, people are taking risks," said Jane Margesson, a spokeswoman for the New Jersey chapter.