The New Inquisition

European drug executives and their outside counsel are as nervous as a suspect who has been hauled in to the station house by the police and is waiting to be charged. In November they expect to read the interim report of Neelie Kroes, the competition commissioner of the European Commission (E.C.), on the aggressive “sector inquiry” into both the branded and the generic drug industries in Europe launched earlier this year.

If the E.C. wanted to show it was serious with this inquiry, it was successful. Little more than a week after returning from their 2007 year-end recess, some 150 E.C. antitrust cops raided the European offices of the world’s biggest branded pharmaceutical companies. The “dawn raids,” which actually began the afternoon of January 15 and continued for three days, resulted in thousands of documents being boxed up and shipped back to Rue Josef II, the Brussels headquarters of Europe’s top antitrust watchdog. The Commission typically resorts to dawn raids in hard-core cartel investigations; it’s never done so before in a sector-wide inquiry.