European antitrust investigators flexed their muscles yesterday by initiating proceedings against Sanofi-Aventis, the French pharmaceutical giant, for allegedly trying to block a dawn raid during an inquiry into generic medicines.

The European Commission has accused the company of obstructing inspectors who were seeking evidence that the industry was trying to keep cheap drugs off the market.

Sanofi-Aventis, which denies the claims, could face a fine of up to €280 million (£221 million) - 1 per cent of its 2007 sales - if found guilty of failing to co-operate with the inquiry.

However, commission sources said that the company was unlikely to be required to pay this much in practice.

The launch of such proceedings by the Commission is a rare step designed to signal a point of principle over the extent of its powers, lawyers say. In the only other recent case of its kind, E.ON, the German energy group, was fined €38million in January for breaking a commission seal on a room containing confiscated documents.

The claims against Sanofi-Aventis stem from a raid by antitrust inspectors in January as part of an inquiry into allegations that companies in the sector were manipulating patents and litigation to block the development of generic medicines in Europe.

The Commission asserts that the company refused to hand over a key document until it received a search warrant issued by a French judge. Although the document was made available that day, Brussels says that Sanofi-Aventis may have acted illegally by failing to hand over a copy of the document immediately when asked.

“Companies have an obligation to comply with commission inspection decisions and to co-operate with inspectors,” it said in a statement. Lawyers said that Brussels was keen to avoid a precedent that could shift antitrust powers back to national authorities.

Sanofi-Aventis said that it had acted in good faith and had always intended to produce the document. A company spokesman said that it had sought a warrant to “protect specific interests in connection with proceedings” in the United States.

Among other companies that are being investigated by Neelie Kroes, the Competition Commissioner, are AstraZeneca, GlaxoSmithKline, Johnson & Johnson, Merck, Pfizer, Teva Pharmaceutical Industries and Wyeth.She said that the industry was failing to develop new medicines or to produce cheaper generic copies of existing ones.

In announcing the investigation four months ago, Mrs Kroes said that the number of new drugs put on the market had fallen from an average of 40 a year between 1995 and 1999 to 28 a year between 2000 to 2004.

Generics account for only 42 per cent of the market in Europe, compared with 63 per cent in the US, according to the European Generic Medicines Association.

Last month, the Commission broadened the scope of its inquiry to include medical organisations and government welfare agencies.

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