The European Commission says it is pleased with the decrease it has seen in “potentially problematic patent settlements” within the continent’s pharmaceutical sector.

The Commission has been casting a critical eye over the industry for the last few years through a series of raids and an antitrust probe that ended last July. Drugmakers have been accused of setting up backhand deals with the makers of cheaper copycat versions of their branded medicines to keep them off the market.

Against this backdrop, a monitoring exercise was launched in January this year which collected data on settlement agreements between originator companies and generic ones for the period from July 1, 2008 to December 31, 2009. Some 93 patent settlement agreements were concluded between originator and generic companies during the 18 months covered by the survey, compared with 207 deals concluded during the 7.5 years covered by the sector inquiry (ie January 2000 to June 2008).

The EC, which asked 41 originator and 45 generic companies to submit copies of their patent agreements relevant for the EU/EEA markets, says the number of settlements that may be problematic from a competition perspective “decreased significantly in importance and number” in its latest investigation. In the period covered by the sector inquiry, such settlements accounted for 45 out of 207 or 22% of those reported, while for July 2008-end 2009, only 10% or nine out of 93 “fell into the category that might attract scrutiny”.

Also, the amount of money involved in the settlements between originator and generic drugmaker also appears to have gone down, from more than 200 million euros recorded in the sector inquiry to less than 1 million euros in the more recent period.

Joaquin Almunia, vice president in charge of competition policy, noted that “settlements are an effective means to end patent-related disputes and litigation” and “nobody disputes this. However, some of them may be anticompetitive”. He added that the report “appears to show the sector's increased awareness of the potential competition concerns”, but warned that the Commission will “remain attentive to ensure that the sale of safe, affordable medicines is not delayed by unfair practices”.

Mr Almunia concluded by saying that the Commission’s vigilance “is all the more important in times of crisis and of serious budgetary constraints”. It was noted that the monitoring, “which proved to be of limited burden for the companies concerned,” will continue through to 2011 at least. The Commission has two open investigations with respect to patent settlements involving Servier and Lundbeck.