EU official raid Ranbaxy French unit

EU officials conducted raids at the French unit of Ranbaxy Laboratories Ltd, India's biggest drug maker as part of a widened probe of settlements between drug makers and brand-name pharmaceutical companies.

The commission also raided Sanofi-Aventis SA, Teva Pharmaceutical Industries and a unit of Novartis AG, according to spokespersons of the firms. According to the EU antitrust regulator the firms were raided on suspicions of the companies having abused their dominant market positions or engaging in 'restrictive business practices.'

This is the third time since the beginning of the investigations of the pharmaceutical industry in January 2008 that the drug makers have called on the offices of the firms.

The focus of the EU drive is to unearth misuse of patents and lawsuit settlements to force less-expensive generic medicines off the market.

According to a report of the Brussels-based commission dated July, companies use a variety of techniques to delay the introduction of generics as long as possible.

In July, EC anti-trust officials said three Indian companies - Lupin, Matrix and Unichem - had entered into agreements with France's Laboratories Servier to delay entry of generic versions of hypertension drug Pernidopril with the original drugmaker France's Laoratories Servier.

While the US government has also raised similar concerns on patent settlements, follow up action has been lax. The EC has however been quick to take action against companies delaying launch of low-cost drugs.

According to EC estimates delays in entry of generics increased patients' treatment spend by 20 per cent between 2000 and 2007. If EC were to continue it aggressive monitoring of such deals many Indian generic manufacturers could come under the scanner according to industry analysts.