European antitrust investigators are expanding the scope of a major inquiry into pharma in a bid to determine whether drugmakers are blocking generic rivals from getting less-expensive meds to market quickly, Reuters reports.

Lawyers and European Union officials say that Neelie Kroes, the European Union competition commissioner, is also probing whether efforts to block competitors by extending patents were distracting them from developing new meds, Reuters continues.

Investigators, who questioned about 100 companies earlier this year, including Pfizer, Glaxo and Sanofi-Aventis, are now turning to about 80 medical organizations, including associations of doctors, patients and pharmacies, and government agencies that set the prices of prescription drugs in Europe. That could make it the broadest antitrust investigation ever in the EU, according to Reuters.

If Kroes determines that drugmakers are using unfair practices, she could impose large fines - as happened once already to AstraZeneca - and recommend changes to industry practices. “There is clearly a block in the system,” Greg Perry, who heads the European Generic Medicines Association, tells Reuters. “Access to the market in Europe still is less speedy than in the United States.”

Generics make up 42 percent of the market by volume in Europe, compared with 63 percent in the US, according to Perry, whose organization includes the three of the largest generics companies operating in Europe: Ratiopharm, Teva and Sandoz.

The inquiry could be a boon for Kroes, whom many analysts expect to seek a second term as Europe’s antitrust chief next year. Although she oversaw part of the high-profile case against Microsoft, and has taken a tough line with electricity producers, her candidacy would be strengthened if she could point to another money-saving victory in an area of concern to consumers and governments. Commissioners are proposed by their home government and approved by the European Parliament.

Some health and consumer groups also argue that more competition would pressure drugmakers to develop more new meds and rely less on extending patent protection and marketing of existing molecules - a practice known as evergreening.

“These companies should be spending money on discovering drugs for diseases that still go uncured,” David Ortega, in charge of competition issues at the Spanish consumers’ organization OCU, tells Reuters.

The EU investigation began in January with surprise inspections at a number of companies making both brand-name and generic meds. Kroes then requested expert help from the European Patent Office, a body based in Munich that operates separately from the European Commission. The patent office agreed to send an official to work with investigators on the case, Reuters reminds us.

Drugmakers and lawyers were surprised by the use of dawn raids - the first time such tactics were used in this type of antitrust investigation - and by the focus on patents, which the industry critically relies on to recoup the costs of research and development.

Dozens of drugmakers operating across Europe had to respond to 42-page questionnaires, which require info on how they managed patents, conducted marketing campaigns and used 230 different active ingredients from 2000 to 2007.

Brian Ager, the director general of the European Federation of Pharmaceutical Industries and Associations, says drugmakers were worried. Generics commonly reach the market in Europe within three months after patents expire, but manufacturers in Europe tend to market a narrower selection of best-selling meds compared with US counterparts because of price controls in Europe, he says.

“Let’s hope antitrust officials reach a better understanding of our industry,” Ager tells Reuters. “There’s a lot of nervousness in the industry because some of the real disincentives for innovation resulting from national pricing and reimbursement schemes are unlikely to be tackled in this investigation.”

Jonathan Todd, a spokesman for Kroes, tells Reuters that antitrust officials were “not yet drawing any preliminary conclusions from the pharmaceutical sector inquiry as regards legislative changes or anything else because it is far too early to do so.”

So far, analysts see little immediate threat to pharma profits. One reason, according to Luisa Hector, an analyst in London for Lehman Brothers, is that drugmakers are more aggressive in the US than in Europe about protecting drugs by marketing newer formulas of older drugs.

Even so, if investigators discover abuses in Europe, it would not be the first time. In 2005, EU regulators fined AstraZeneca for giving misleading info to several national patent offices to extend the life of a blockbuster antacid drug, Losec, and delaying the entry of generic drugs into the market.

Last year, regulators began an antitrust case against Boehringer Ingelheim for suspected misuse of the patent system to exclude competition in the market for chronic obstructive pulmonary disease drugs, Reuters reminds us.

Antitrust officials already are considering recommending changes to EU legislation or to the way current legislation is enforced to chip away at the control drugmakers exert over some meds, although they have not said what those changes would be.

Antitrust lawyers noted that the recommendations themselves were likely to have an impact as early as next year, even if Kroes does not go after any specific company.

“Practices that long have been widespread in the industry may need to change when EU antitrust officials clarify what kinds of behavior could infringe antitrust rules,” Stephen Kinsella, an antitrust partner with law firm Sidley Austin in Brussels, tells Reuters.

Todd, the spokesman for Kroes, tells Reuters that antitrust officials were “not yet drawing any preliminary conclusions from the pharmaceutical sector inquiry as regards legislative changes or anything else because it is far too early to do so.”

Perry, of the generics association, says any changes should aim to make it easier for generics companies to place less-expensive drugs on the market as soon as patents expire - on “Day 1″ rather than months afterwards - and discourage big drugmaker from suing generic rivals for suspected patent violations that later turn out to be unfounded.

Yet EU investigators also appear to be turning their investigation on generics, too, asking whether they have accepted payments from brand-name drugmakers as part of patent litigation, perhaps in exchange for launching a drug later than originally intended.

In the US, the Federal Trade Commission argues reverse payments violate antitrust law by dividing up the market. But Perry tells Reuters the practice was far less widespread in Europe.