EU fines AstraZeneca £40m

PHARMACEUTICALS giant AstraZeneca was today fined more than £40m for blocking rivals from marketing a drug similar to its best-selling ulcer treatment Losec.

The European Commission said it was levying the penalty for the company's 'serious abuses' of its dominant market position going back seven years.

The Commission has powers to fine any company it finds guilty of impeding fair competition. An enquiry found AstraZeneca had breached EU competition rules by blocking or delaying rivals from producing generic versions of Losec, even though its patent had expired.

And the fine amounts to far less than the potential benefit to the company of its 'abuses' of its dominant market position, the Commission said.

The EU's Competition Commissioner, Neelie Kroes, said that companies had a right to protect their intellectual property, but added; 'It is not for a dominant company but for the legislator to decide which period of protection is adequate. Misleading regulators to gain longer protection acts as a disincentive to innovate and is a serious infringement of EU competition rules.

'Health care systems throughout Europe rely on generic drugs to keep costs down. Patients benefit from lower prices. By preventing generic competition, AstraZeneca kept Losec prices artificially high. Moreover, competition from generic products after a patent has expired itself encourages innovation in pharmaceuticals.'

Intellectual property experts hailed the ruling as the first time that EU competition laws have been used to combat perceived patent abuse. While it was still under patent protection during the 1990s, Losec was a best-selling prescription drug, selling more than £3bn a year around the world.