European Commission antitrust investigators said yesterday that they have asked “certain pharmaceutical companies” for details of their patent settlement deals relating to European markets, particularly those concluded during July 1, 2008-December 31, 2009.
The Commission says this “monitoring exercise” has been launched in light of the findings of its competition inquiry into the pharmaceutical sector, published last July, and that it is particularly looking at agreements in which an originator company pays a generic competitor in return for delaying a generic competitor’s 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,” Competition Commissioner Neelie Kroes said yesterday.
The Commission’s Directorate General (DG) for Competition says it has asked the firms for copies of the agreements without additional background information “in order to limit the administrative burden on companies.” After receiving their responses, the Commission will analyse the agreements and publish a short statistical overview, it notes, adding that a “more targeted request for information” could follow if any specific settlement raises additional questions. Depending on the outcome, “this round of information requests may be repeated annually for as long as the Commission considers that there is a potential problem,” it says.
The Commission did not identify which companies it has contacted, but AstraZeneca, Boehringer Ingelheim, GlaxoSmithKline, Novartis, Roche and Sanofi-Aventis are all reported to have confirmed that Commission investigators have asked them for information relating to their deals with generics makers. Teva and Niche Generics are also said to be among the generics firms targeted for further information.
This latest move is “a logical next step” for Commission antitrust investigators in processing their agenda to ascertain whether or not there are unnecessary anticompetitive delays in generic drug manufacture, commented Gareth Williams, partner at intellectual property law firm Marks & Clerk. However, he stressed that the scope of the probe and the nature of the settlements involved need to be clarified, and pointed out that the mere existence of a settlement is not in itself evidence of collusion.
“Patent settlements can represent a perfectly reasonable and commercial response to the threat of patent infringement litigation or challenges to patent validity – without them, pharmaceutical firms may have no option but to become involved in costly litigation to protect their essential patents, which would in turn result in costs being passed on to consumers,” said Mr Williams.
“While the EU is right to investigate the possibility of anti-competitive patent agreements, a clearer stance needs to be taken regarding the effectiveness and legitimate use of these vehicles. The market will be cautious until more information is made available, to provide the assurance needed that these often justifiable arrangements are not being treated as inherently suspicious,” he added.
-Meantime, the US Congress is due to be asked today by a group of legislators and the Federal Trade Commission (FTC) to include a ban on such patent settlement agreements in the final reconciled version of the House and Senate health reform bills. While the House version already prohibits these deals, the Senate bill currently does not.
