This article is more than 11 years old

This article is more than 11 years old

European patients, taxpayers and national treasuries are being fleeced of billions of euros because of the big pharmaceutical companies' elaborate campaigns to delay the marketing of cheaper generic drugs, the European commission said.

"There is something rotten in the state [of the pharmaceutical industry]," said Neelie Kroes, the competition commissioner, unveiling the findings of an 18-month inquiry into the pharmaceuticals sector. "Makers of original medicines are actively trying to delay the entry of generic medicines on to their markets."

Kroes announced a formal investigation of the French company Les Laboratoires Servier for allegedly stifling competition for the heart disease drug Perindopril and she is believed to be on the brink of ordering another three investigations, including one into practices at GlaxoSmithKline.

The investigation of the sector, which included raids on several of the biggest firms last year, showed that the major firms had struck at least 200 settlements with generics manufacturers, costing €200m (£173m) and mainly aimed at restricting the marketing of generic drugs.

A key tactic by big firms was to abuse patenting practices to play for time and wreck the chances of generics firms being able to compete, the commission found.

A common practice was for the major companies to file a large number of patent applications across EU states for a single drug – as many as 1,300– in what are known as "patent clusters".

Another common option was for the major firms to sue generics companies and then stall the cases in court for several years.

Kroes called for a new Europe-wide patent and a unified system of litigation to save time and money. "The lack of progress is very, very damaging," she said.

"Vicious tactics are used to delay or prevent the entry of more affordable and innovative medicines into the market," said Monique Goyens, director general of the European Consumers' Organisation. "Millions of euros are spent in promotional activities, in legal disputes and settlement agreements instead of in the development of new medicines."

The commission estimates generic drugs are 40% cheaper than their branded equivalents within two years of coming on the market, while it calculates that the drugs retail market in the EU is worth €214bn a year.

But while Kroes attacked the big firms' tactics, the commission appeared to tone down its criticism of the sector and spread the blame for the fact that drug prices are kept unnecessarily high.

The trade body representing the major pharma companies in Europe, EFPIA said it feared the commission verdict would be worse. It said: "It demonstrated a welcome shift away from the emotive language of the [previous interim] report, with a better balanced, more holistic view of the issues facing the sector. The report failed to substantiate the initial allegation that patenting strategies dampened innovation or delayed generic entry illegitimately."

Arthur Higgins, chief executive of Bayer Healthcare, said: "The report failed to substantiate the initial allegation that patenting strategies dampened innovation or delayed generic entry illegitimately.

"Complex and divergent regulatory barriers are the primary cause of market-entry delay."