Delay in generic entry should remain a concern to competition authorities

Abstract

The importance of the pharmaceutical sector for Europe has been growing as it is essential for the health and well-being of its citizens to access innovative, safe and affordable medicines, particularly as its population ages. The 2009 sector inquiry of the European Commission into the pharmaceutical sector found that on average citizens waited more than 7 months after patent expiry for cheaper generic medicines, costing them and their health care systems 20% in extra spending. This article discusses to what extent the conduct of pharmaceutical companies and the agreements between originator and generic companies contribute to the delay of generic entry. The recent monitoring exercises by the Commission have revealed that although the total number of patent settlements has steadily increased in Europe in recent years, the potentially anticompetitive patent settlements (settlements leading to delay of generic entry with the presence of reverse payments and/or out-of-scope settlement terms) have generally decreased in Europe following the Commission's sector inquiry. Competition authorities should, however, remain vigilant and concerned about potentially anticompetitive practices leading to delay in generic entry. Moreover, further guidance will need to be developed by competition authorities and ultimately by the courts whether and under what circumstances patent settlement agreements that delay generic entry in return for a payment or other value transfer from the originator company constitute anticompetitive conducts.