Several drugmakers were raided as part of a European Union probe into whether companies stifled competition in the world’s second-biggest pharma market. Inspectors from the EU’s antitrust authority in Brussels collected “highly confidential” info about the use of intellectual property rights, litigation and settlements in patent disputes, the commission says in a statement. Among those visited - Pfizer, Johnson & Johnson, Sanofi-Aventis, Merck, Astra-Zeneca and Sandoz, according to various reports.

“If innovative products are not being produced, and cheaper generic alternatives to existing products are in some cases being delayed, then we need to find out why and, if necessary, take action,” according to European Competition Commissioner Neelie Kroes (pictured), who declined to identify all the companies involved in the probe.

The inspections aren’t “targeting companies suspected of wrong-doing. The inspections are just the starting point of a broad inquiry, a starting point that will ensure that the Commission has immediate access to the information it needs to guide its next steps. The kind of information the Commission will be examining, such as the use of intellectual property rights, litigation and settlement agreements, is by its nature information that companies tend to consider highly confidential. Such information may also be easily withheld, concealed or destroyed. That is why we decided that inspections were necessary.

“We have launched this inquiry because pharmaceuticals markets are not working as well as they might. Patent protection has never been stronger, but the number of new pharmaceuticals coming to market is declining. Patents can sometimes be invented around and will always expire eventually, but generic manufacturers are not jumping into the markets as quickly as we would expect,” Kroes says in her statement. The EC notes the number of new drugs reaching the market dropped to an average of 28 a year between 2000 and 2004 from 40 a year from 1995 to 1999.

First, the inquiry will look at agreements between pharmaceutical companies, such as settlements in patent disputes, to see whether they infringe the EC Treaty’s prohibition on restrictive business practices. Second, the inquiry will look at whether companies have created artificial barriers to innovative or generic product entry, through the misuse of patent rights, vexatious litigation or other means, to see whether such practices infringe the EC Treaty’s ban on abuses of dominant positions.

The commission has conducted similar probes into the EU’s telecommunications, electricity, gas and financial services industries. The regulator may force individual companies to change their practices. Companies can also be fined as much as 10 percent of annual sales for breaking antitrust rules.

The regulator learned of potential antitrust problems in the drug business through specific cases against companies. In June 2005, the commission fined AstraZeneca $89 million for misleading regulators to delay competition to its Prilosec ulcer medicine, once the world’s best-selling drug.

AstraZeneca says in an e-mailed statement that it is cooperating with the EU probe. Jean-Marc Podvin, a spokesman for Sanofi-Aventis, also says the company was cooperating with the investigation. And GlaxoSmithKline says it also has been contacted in the case.

The commission said it will issue a final report in the first half of 2009.