Tuesday, December 07, 2010

Witty: EC Raids? Who Cares

You'd have thought that the recent European Commission raids on AstraZeneca and Nycomed, aimed at uncovering potential anti-competitive behavior, might have ...we won't say shocked, coz what's shocking these days... but at least jolted the industry. Raised an eyebrow or two. But this does not appear to be the case. GSK's CEO Andrew Witty on Friday Dec. 3 gave the impression of a man with either supreme confidence, or in extreme denial.

At a conference held in the grounds of the Belgian senate, Witty appeared to suggest that the Commission enquiry into the pharmaceutical sector, and originators' alleged intent to block or hinder generic market entry (block generics? Never!) was at best due process, and at worst a waste of time.

Witty’s main defence appears to be that all contentious patent issues will eventually be tested in the courts. “So if there is one thing that should reassure you, it is the number of patent cases that end up being litigated in European and US courts," he said. "That is what keeps the system healthy," he stressed, denying any suggestion of shadowy wrongdoing.

Fair enough (as concerns patent issues finding their way to court). But Witty also maintained that the Commission's comprehensive sector enquiry, which began in January 2008, had already been concluded. “I think the end-point of that enquiry was that there was no significance – there was no action, if you will, that came out of that enquiry,” Witty stated.

Coming in the same week that news emerged of raids on AZ and Nycomed, the timing of Witty's somewhat dismissive comments looks, well, interesting. Furthermore, in July this year, the Commission issued a Statement of Objection to Servier (a previous host to an EC raid, along with Teva, back in late-2008) indicating that the privately-owned French company was not co-operating in the investigation process. It added that if it eventually found that there was sufficient evidence that Servier, intentionally or negligently, provided misleading and incorrect information, it could impose a fine of up to 1% of the total turnover of the company in the preceding business year.

So the Commission doesn't, then, appear to share Witty's view that the initial enquiries are concluded. In fact, following the latest raids, the Commission stressed that there is no legal deadline to complete inquiries into anticompetitive conduct. “Their duration depends on a number of factors, including the complexity of each case, the extent to which the undertakings concerned co-operate with the Commission and the exercise of the rights of defence,” a Commission statement said.

But Witty's certainly right as regards the likelihood that the Commission uncovers anything from its latest round of raids. Servier has served as a warning to any company that has anything anti-competitive to hide. You can be sure that guilty parties have long since done their shredding.

--by Faraz Kermani
image by flikrer NickPiggott used under a creative commons license

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