On January 16, 2008, the European Commission launched a sector inquiry into the pharmaceuticals industry by carrying out a series of unannounced inspections of

innovative and generic pharmaceutical companies. The targeted companies include both European and U.S. pharmaceutical companies with significant operations in Europe. The inquiry is likely to implicate important and controversial issues regarding the intersection of competition and intellectual property law, including the legality of patent litigation settlement agreements and conduct relating to the procurement and enforcement of intellectual property rights.

The sector inquiry is generally designed to provide the Commission with insight into commercial practices within the pharmaceutical industry; however, it was launched in response to the Commission’s concern that competition in the European pharmaceutical sector may not be working

as it should. Specifically, the Commission noted that there has been a significant decrease in novel and generic medicines for human consumption entering the European pharmaceutical market in recent years.