On January 15, 2008 regulators from the European Commission conducted surprise inspections (or dawn raids) at the European offices of several major pharmaceutical manufacturers. The inspections marked the initiation of a sector inquiry prompted by concerns that fewer new pharmaceuticals are being introduced in the EU, and that the entry of generics is being delayed. Specifically, the European Commission is investigating whether pharmaceuticals companies entered into agreements the effect of which is to artificially prolong the duration of intellectual property protections on brand name drugs by delaying entry of generics. Such agreements, if found, could amount to violations of Article 81 or Article 82 of the EC Treaty.

In conducting its inspections, the Commission broke with its standard practice of giving prior notice to targeted firms, usually through questionnaires. According to a statement by the Commission, unannounced inspections were used in this case to gather “highly confidential . . . information [which] may also be easily withheld, concealed or destroyed.” The European Commission stressed, however, that it was conducting a broad inquiry into the industry rather than responding to specific information about wrongdoing. EU competition commissioner Nelie Kroes supported the inquiry, stating: “Pharmaceutical markets are not working as well as they might. Patent protection has never been stronger, but the number of patents coming to market has been declining.”

Officials at Pfizer, GlaxoSmithKline, Sanofi-Aventis and AstraZeneca have confirmed that their companies were targeted by the inspections. Teva Pharmaceuticals, the world’s leading generics producer, has also indicated its involvement. The European Commission is expected to release an interim report on the results of the inquiry in Fall 2008, and a final report is expected in Spring 2009.