European scrutiny of pharma patent deals to continue
pharmafile | July 6, 2010 | News story | Sales and Marketing | European Commission, competition, patents
Europe’s drug watchdog has served notice that it will keep up scrutiny of pharma patent settlements to ensure they are not uncompetitive.
“Patent settlements are an effective means to end patent-related disputes and litigation,” says Joaquín Almunia, European Commission vice president in charge of competition policy. “Nobody disputes this. However, some of them may be anticompetitive.”
But this is less and less the case, the Commission’s new monitoring exercise – covering 18 months from July 2008 to the end of December last year – suggests.
It found that of the 93 agreements concluded between pharma manufacturers (‘originators’) and generic companies in the period, just 10% were deemed potentially problematic.
By contrast the Commission’s competition inquiry into the pharma sector, which finished a year ago, found 22% of the 207 agreements from January 2000 to June 2008 had problems.
“Our report appears to show the sector’s increased awareness of the potential competition concerns,” adds Almunia.
“But the Commission will remain attentive to ensure that the sale of safe, affordable medicines is not delayed by unfair practices. This is all the more important in times of crisis and of serious budgetary constraints.”
The Commission is particularly hot on the issue of ‘value transfer’ from originator to generic company – for example, direct payments – but says this fell from more than 200 million euros in the inquiry period to less than one million euros in the new report.
Restrictions on generic entry outside the time, product or geographic scope of the patent are also frowned upon, although the Commission is at pains to say that not all ‘problematic’ settlements warrant an immediate in-depth antitrust investigation.
The Commission will repeat its monitoring exercise next year, and insists that pharma companies’ concern that greater scrutiny would lead to more litigation has been “largely unfounded”.
The Commission is currently running investigations on patent settlements involving Servier and Lundbeck.
Adam Hill
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