[Ip-health] EC investigation on patent deal by originator and generic drug companies

[Heesob Nam]

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Brussels, 12 th January 2010

Antitrust: Commission launches monitoring of patent settlements
concluded between pharmaceutical companies

The European Commission can confirm that on 12 January 2010, on the
basis of EU antitrust rules, it addressed requests for information to
certain pharmaceutical companies asking them to submit copies of their
patent settlement agreements. The requests cover patent settlement
agreements concluded between originator and generic pharmaceutical
companies in the period from 1 July 2008 to 31 December 2009 and
relating to the EU/EEA. The Commission is in particular looking at
patent settlements where an originator company pays off a generic
competitor in return for delayed market entry of a generic drug. This
monitoring exercise has been launched in the light of the findings of
the competition inquiry into the pharmaceutical sector Inquiry
(published in July 2009 =96 see IP/09/1098 and MEMO/09/321 ). The sector
inquiry highlighted the risk that certain types of patent settlements
may have negative effects on European consumers by depriving them of a
broader choice of medicines at lower prices and indicated that the
Commission could monitor such patent settlements.

Commissioner Kroes commented: "The Commission's pharmaceutical sector
inquiry points to significant shortcomings in the pharmaceutical
sector. Patent settlements are an area of concern, not least if there
are situations where an originator company pays off a generic
competitor in return for delayed market entry. We need to monitor this
type of agreement in order to better understand why, by whom and under
which conditions they are concluded. The monitoring will also provide
us with the possibility to act should this become necessary. Since
completing the sector inquiry, the Commission has launched a number of
new antitrust investigations and we will continue to do so should this
be necessary."

A selected number of originator and generic companies received an
information request in which they are asked to submit to the
Commission a copy of all patent settlement agreements relevant for the
EU/EEA markets and concluded in the period from 1 July 2008 to 31
December 2009, as well as copies of all annexes, related agreements
and amendments. In order to limit the administrative burden on
companies, they were asked for copies of the agreements without
additional background information. Following receipt of the responses,
the Commission will analyse the agreements and publish a short report
providing a statistical overview. In case a specific settlement raises
additional questions, a more targeted request for information could
follow. Depending on the outcome of the exercise, this round of
information requests may be repeated annually for as long as the
Commission considers that there is a potential problem.